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Why Companies Latch on to Social Responsibility Issues

The last two decades have seen a noticeable increase in the number of companies that make social responsibility part of their public image. Social responsibility issues have changed and evolved over that same time, and so has corporate commitment to the ideals espoused through those issues. All the while, more companies continue to latch on to social responsibility. Why?

Trying to answer the question with a single, pat answer is like trying to explain why politicians do what they do. The motivations are as varied as the people making decisions. It is not enough to say it’s all about money or power. There are a lot of other things in play.

Many Consumers Care

It is reasonable to suspect that some companies who make social responsibility a priority do so because they believe that customers care. A 2019 study cited by Business Wire indicated that nearly half of all consumers (46%) make it a point to be aware of company social responsibility efforts.

That statistic alone is enough to make business owners and CEOs stand up and pay attention. Why would consumers pay close attention if it were not important to them? Furthermore, if social responsibility is important to half your customer base, wouldn’t you make a point of trying to make those customers happy? Of course you would.

Companies Are Not Trusted

Another fastening statistic from that same study could also be a contributing factor: just 9% trust company social responsibility claims all of the time. In other words, 91% do not necessarily believe company claims are truthful at any given point in time. Sometimes they might be; other times they might not be.

Executives who believe their companies are not trusted tend to work harder to earn consumer trust. That could motivate them to go overboard in terms of social responsibility. If that’s the case, it would explain some of the outlandish positions that companies have taken on largely meaningless issues in recent years.

Companies Actually Do Care

Another possible motivation is that companies actually do care about social responsibility. We cannot discount this. Even though the point of business is to make money, companies are owned by people. There are people in the business world who care about more than just profit.

Pale Blue Earth is a Salt Lake City company that was originally launched around a social responsibility issue. The company’s founders were concerned about the fact that billions of disposable alkaline batteries are tossed into landfills every year. They introduced a new line of USB rechargeable lithium-ion batteries with the goal of reducing alkaline battery consumption. They also committed to donating a certain percentage of sales revenues to charities working to protect the environment.

It’s a Money Decision

A fourth motivating factor is money. Though it may sound cynical, we cannot discount the profit motive either. Again, businesses exist primarily to make money. If showing interest in social responsibility creates loyal customers that add to the bottom line, so be it. Companies are willing to travel that road in order to reap the benefits thereof.

To be clear, the profit motive is not bad in and of itself. Many of the good things we take for granted in modern life only exist because of profit. The profit motive can be used for good or bad. If it is used to promote social responsibility, it is a good thing.

Is any one of these four motivations the primary factor behind corporate social responsibility? Probably not. In all likelihood, all four are in play for any given company. That is the way most things in life work.

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