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Biz Memos

Philanthropist Avram Grant advises businesses: Social responsibility is not for the faint of heart

Philstar.com
Philanthropist Avram Grant advises businesses: Social responsibility is not for the faint of heart
Avram Grant (center), a well-known philanthropist with contributions to many noble causes, believes social responsibility is not for the faint of heart. “Corporations wanting to do something for society are thrilled at the mere mention of this word while completely ignoring what the word ‘responsibility’ entails," he says.
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MANILA, Philippines — Thrown around almost too frequently by people, the term social responsibility holds much more weight than most realize. The idea of being socially responsible may bring you temporary excitement and the feeling that you’ll make people proud of you, but that’s just the start.

Avram Grant, a well-known philanthropist with contributions to many noble causes, believes social responsibility is not for the faint of heart.

According to Grant, “Corporations wanting to do something for society are thrilled at the mere mention of this word while completely ignoring what the word ‘responsibility’ entails.”

When you say social responsibility, you are referring to a goal but the achievement of this goal requires effort, expense, dedication, patience, and perseverance.

Social responsibility doesn’t happen overnight

The first thing you should know about being socially responsible is that it’s a long and testing process. You can’t think of being responsible socially today and implement it tomorrow. There is a lot to assess before you take the first step.

Before anything else, you must define which societal challenge you are willing to overcome. Once you have identified that, you have to create a step-by-step process of how you will get there. The first big hardship that you will have to overcome here is the public itself.

Who is going to reward you for you being socially responsible? Of course, the public! What makes things tricky is that people won’t envision your goal like you do. In other words, they might not feel any connection with the cause that you want to stand for.

In other words, it will require you some time to educate our audience about the goal you wish to achieve before you start unloading it all on them.

Take the example of McDonald’s first step that it took in 2010 of purchasing only cage-free eggs. The first announcement from the giant fast food chain was only to source a part of all the eggs it used. It took the company five years to take the next step and announce to the public that was going entirely in the favor of cage-free eggs. More importantly, it only wishes to achieve that goal by 2025.

Intimidating costs for small businesses

Whether you are an individual, institute or multi-national business, you will have to bear upfront costs to fulfill your commitment to become socially responsible.

Words and announcements are not enough to prove your responsibility towards society as a company. Grant believes, “Even the smallest of steps taken to become socially responsible require a tech-driven approach, and such an approach comes with its fair share of costs and expenses.”

Knowing that 90% of the world’s biggest companies now compile and publish CSR reports every year shows the big players are going in hard. However, you can’t ignore the fact that eight years back, the amount that only the companies in the US were deploying into donations was as high as $18 billion.

People pay for it but they don’t

Yes, the title might be a bit of wordplay but it is as true as our existence. People are quick to tell you about their reservations and expectations in terms of corporate social responsibility, but they don’t hold true to their words when they are the ones on the other end.

According to an article on Forbes quoting data from Technomic, the percentage of people who are willing to order from restaurants that use cage-free eggs is 47% but the statistics show a completely different picture when you change a few things.

For example, the same customers wouldn’t pay more for cage-free eggs, as the percentage of people who would pay more declined to only 17%.

Based on this study, you can easily conclude one thing with surety i.e. your social responsibility efforts will get you attention, but not increased ROI in terms of hiked prices. This also raises another important and quite frequently discussed question, “Do customers really care about companies fulfilling their social responsibilities?”

If you are surveying a sample of people to get data for your CSR initiative, it is important that you understand the behavior-attitude gap that predominantly exists in all kinds of surveys.

Social responsibility in non-developed countries

The story of countries that are still developing is completely different from the developed countries. It should come as no surprise that social responsibility is an elusive concept in such countries. In other words, before you begin working on your social responsibility, you might want to work on making people aware of what it is exactly.

You might not have any inconvenience in explaining terms like carbon footprint to people in developed countries, but it will become quite a task to do so in a developing country.

Unless people are aware of the importance of companies fulfilling their social responsibilities, the companies will not join the initiatives either. At the end of the day, a business is a business and it needs a target audience for any initiative.

It is clear from CSR disclosure rates in developed countries vs. the same in developing countries that companies in the latter countries are still lacking that drive and excitement for social responsibility.

A study finds that the CSR disclosures are as low as 49.4% in developing countries when you look at the mean disclosures. The lowest disclosure score in developed countries is still quite encouraging at 53.5%.

The paradox of reward and hard work in employees

If you research on the internet, you will be bombarded with statistics that show how much people love to work for companies that are socially responsible. According to one of the studies, up to 70% of employees would forfeit the idea of accepting a job offer from a company that fails to have a well-defined purpose.

A whopping 92% of employees are likely to recommend their employers to the people in their circles based on the fact that their employer pursues a well-defined purpose.

However, when you take a deeper dive into the same statistics, you start to peel off layers and discover some other truths as well. There is no doubt about the fact that modern employees, in fact millennials, prefer to work for companies that have clearly defined and implemented CSR policies.

But look at the other side of the coin too. Studies have found that despite having a strong urge to work for companies with a purpose and well-defined corporate social responsibility, most workers are still attracted by higher wages.

Eventually, if corporate entities can work out a plan that works for their employees, they can get positive outcomes from their CSR initiatives, as studies suggest that a majority of millennials wouldn’t mind getting a smaller pay if their employer practices social responsibility.

Begin your social responsibility with patience

If you own a business and wish to improve your reputation in the eyes of the public and have a positive impact on your bottom line by winning over more customers, you will have to begin by being patient. Firstly, you will have to bear the costs of being socially responsible.

Secondly, you must prepare for opportunity loss to meet your CSR goals. Thirdly, you have to be ready for an outcome that is the complete opposite of what you had intended for.

Grant believes determination, preparedness and perseverance are important for anyone and any company to be socially responsible.

CORPORATE SOCIAL RESPONSIBILITY

CSR

SOCIAL RESPONSIBILITY

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