As awareness of social and environmental issues increases, more consumers are expecting their favorite brands to give back to the local and global community. That’s where terms like “corporate citizenship” come into play.
Today, corporations are viewed as people with many of the same rights and responsibilities as other citizens. Both small and large businesses are being held to higher standards than ever before, with consumers often favoring companies that prioritize sustainability, fair trade, equal opportunity, and other such ideals. With that in mind, it’s worth taking a moment to understand what corporate citizenship is, where the concept comes from, and how it applies to business.
What is corporate citizenship?
Corporate citizenship is based on the idea that a corporation, much like an individual citizen, owes certain responsibilities to society. A company’s efforts to fulfill those obligations is referred to as “corporate social responsibility,” often abbreviated to CSR. To be a strong corporate citizen, a company must demonstrate a commitment to core values in every decision it makes. This includes how it relates to stakeholders, consumers, employees, and the local community.
Where did the idea of corporate citizenship originate?
The concept of corporate citizenship goes hand-in-hand with recent Supreme Court decisions that underscore the personhood of corporations. Since corporations are not mentioned in the Constitution, the task of defining corporate rights has fallen to the judicial branch. Over time, the Court has ruled that corporations possess many of the same rights as individual citizens, including protection from warrantless search and seizure, the right to free speech, and the right to religious freedom.
Practicing CSR offers several benefits in terms of marketing and sales, and advocacy groups have certainly played a part in pressuring companies to act responsibly. However, the historical inspiration for the modern CSR movement can be traced to “The Gospel of Wealth”, an 1889 pamphlet published by steel tycoon and renowned philanthropist Andrew Carnegie. In the pamphlet, Carnegie made a strong case for businesses to give back to their communities.
How do these principles apply to my business?
Despite the inclusion of the word “corporate,” the principles of corporate citizenship and CSR can be applied to any business. Both large and small businesses can benefit from a set of strong corporate values. According to the 2017 Cone Communications CSR Study, 78 percent of Americans want companies to address key social issues, with a majority being willing to purchase or to refuse a product based on a company’s advocacy choices.
Simply put, corporate citizenship is good for your bottom line. You can use socially responsible practices to attract new customers and investors. A supportive workplace culture, generous community outreach program, sustainable or locally sourced ingredients, and a small carbon footprint are all great ways to differentiate yourself from your competition. Corporate citizenship can strengthen your company’s reputation and boost your marketing efforts. It can also improve customer loyalty, brand recognition, and employee retention.
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Implementing corporate social responsibility (CSR)
So how can your business put corporate social responsibility into practice? Start by examining your supply chain and operations with an eye toward going green. Prioritize transparency and sustainability; look for ways to improve customer and employee satisfaction. Prepare a values statement that lays out the core values of your company.
Finally, invest in your local community. Go beyond simple cash donations. Set aside a day or two every year for your entire company to volunteer around town, or partner with your local government to install new playground equipment at a neglected park. Consider offering scholarships or grants that support local entrepreneurs, nonprofits, and students.
When companies practice corporate citizenship, everyone wins. Customers can feel good about their purchases, employees can feel good about their jobs, and companies can feel good about their profits—not to mention the tangible difference they’re making in the world around them.
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