Three Things You Need To Start A Socially Responsible Company

Ken Sterling, LA Attorney & Talent Agent. EVP Business Affairs BigSpeak. Principal Sterling Media Law. USC researcher on media and law.

Your company can do well by doing good. According to the 2024 LRN Benchmark of Ethical Culture Report, companies with the strongest ethical cultures outperform companies with weaker ethical cultures by 50%.

I’m not just talking about profits. I’m talking about all measures of business performance, from customer satisfaction to employee loyalty to innovation and growth.

When given a choice, consumers would rather support a business that prioritizes good. Think of Ben & Jerry’s, which donates 7.5% of its pretax profits to philanthropic initiatives. Or Ikea, which uses sustainable cotton, wool and wood in its products. Both companies are doing quite well.

Doing well by doing good is at the heart of corporate social responsibility, or CSR. As a business leader, talent agent, attorney and law professor, I’m passionate about business ethics. I advise companies and teach LinkedIn courses on how to build a stronger ethical culture at work and to practice CSR.

What Is CSR?

Before we look at how to practice CSR, let’s discuss what CSR is—and is not.

CSR is not a press release, photo op or a one-time donation to a charity. Instead, CSR is a commitment to operating in a way that benefits society—and the environment.

CSR is all about creating an ethical company culture and strategy that respects all its stakeholders. Companies that practice CSR focus on fair treatment, fair trade (aka ethical sourcing), environmental sustainability and community building.

I think one of the most iconic companies in terms of CSR is Patagonia. Patagonia vets their supply chain, so it doesn’t support child labor and unsafe work practices. And its founder, Yvon Chouinard, donated most of his ownership in the company to support CSR causes, like climate change.

Consider the benefits to Patagonia from being a CSR company: Happy customers, profitability and a positive impact on the world.

Challenges And Opportunities In Implementing CSR

CSR isn’t easy. It demands commitment and continued effort.

Some of the challenges include balancing business goals with ethical considerations, facing dilemmas when pressured to cut corners or prioritize short-term gains and incurring costs and time delays to ethically source supply chains.

On the other hand, some of the opportunities include building trust with your stakeholders, increasing customer loyalty and attracting top talent.

Getting Started Integrating Business Ethics And CSR

1. Find a cause. Choose one that aligns with your business. Something that resonates with all your stakeholders. Some companies ethically source their supply chains, others build houses for the homeless and some donate to One Percent for the Planet.

Over the years at my company, we have experimented with local and global causes. We have cleaned the Santa Barbara beaches, reduced single-use plastics, invested in tree planting and purchased supplies from local businesses.

2. Publish CSR goals. Include your CSR goals in your ethical guidelines and company Code of Ethics. At my company, we publish our goals on our website. By publishing your goals, it holds you accountable to them.

3. Publish results. Track and report your social impact efforts to your stakeholders. Then, publish a report to ensure transparency and accountability. Since my company is small, we publish our results on our website.

Remember, business ethics and CSR are not roadblocks to company success; they’re the building blocks for a strong and sustainable company. When you focus on ethical conduct, it helps create a positive workplace environment, attract top talent and build trust with customers.

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