Changing your business values to match current needs is essential for business growth. You can start by understanding the difference between CSR vs. ESG so you can develop new values that will strengthen your company internally and appeal to more customers.
About 58% of businesses with a clear purpose saw growth of over 10%. Additionally, 73% of employees are more satisfied in their careers if they are motivated by a purpose.
Do you want to give your company a purpose through established business values? Then keep reading to learn how CSR and ESG are the building blocks to a more successful business.
- CSR and ESG are interrelated but are not interchangeable.
- Your company’s CSR is an internal moral code you follow.
- Your company’s ESG is an external measurement method to see how sustainable your business is.
- Customers prefer to shop at businesses that have positive values and support similar causes as themselves.
The Importance of Changing Your Business Values
Your company values are the foundation on which your entire business rests. Just like you must maintain your home’s foundation to keep the house strong, you also must continually evaluate your business’s foundation to make sure it aligns with what matters to you and your customers, then change your organizational culture when necessary.
Values are a moral code or guiding principles that affect how your business operates. These beliefs unify the company to reach for a common goal. In addition, they attract customers whose own values align with the business. Essential values to customers and organizations include social and environmental issues like human rights and sustainable production.
70% of customers are interested in knowing a business’s stance on social and environmental issues. In addition, 46% of customers use this information when choosing where to shop.
For example, many customers prefer to shop with cruelty-free or environmentally friendly brands versus those that do not create products sustainably.
A Comparison of CSR vs. ESG
Corporate social responsibility (CSR) and environmental, social, and governance (ESG) are terms for how a business’s practices impact its community, the environment, and the world.
More specifically, they are the actions and values a business adopts to help make the world a better place. Often companies do this through sustainable investing, environmentally friendly production, adherence to a code of ethics, and community involvement.
Even though these two terms are closely related, they are not interchangeable. So here is a deeper look into what CSR and ESG mean and how they work together to build successful and more sustainable businesses.
What is CSR?
CSR is the internal value standard of a company that guides how you function and what choices you make. It is a scale you use to measure every business decision to see if it has a positive social impact or negatively contributes to society and the environment.
Some examples of socially and environmentally responsible values include:
- Protecting the environment
- Encouraging diversity
- Supporting women’s rights
- Fighting for human rights
- Fostering workplace equity
In 1991, Archie Carroll summed up a business’s CSR values into four categories: philanthropic, ethical, legal, and economic responsibilities.
Image from Victoria University Online
Investing in company values like these positively affects your business. While your CSR is an internal value standard, you shouldn’t keep them to yourself. Every marketing campaign, message, and interaction should reflect that message and let consumers know what you support to attract like-minded and loyal customers.
What is ESG?
ESG is a measuring stick that you can place your company values against to see how well you align with the general population’s standard of social awareness. Being a sustainable organization rests on three pillars:
- Using environmentally friendly practices and products
- Making socially responsible decisions
- Implementing positive business governance rules
Image from CFA institute
Investors will often use set ESG ranking standards for choosing reliable businesses for sustainable investments. Society built these ratings on company data that is publicly accessible, like emissions ratings, responses to human rights issues, sources of raw materials, and more.
Making ESG investing decisions is more than just a moral choice. ESG conscious companies can also be more reliable for investors as they are less likely to experience stock drops because of company scandals and mistakes.
Is CSR the Same as ESG?
A company’s CSR builds a framework for higher ESG standards – making them codependent but not interchangeable.
CSR is the internal moral code that keeps you accountable, while ESG is the measurable external code that rates your performance.
When you establish high CSR values, your company will usually also rate well against global ESG standards.
How to Implement CSR and ESG in Your Business
Are you ready to change your company values to develop better CSR standards and a higher ESG rating? Here are six actionable steps you can take to create a more sustainable business.
3 Ways to Incorporate CSR in Your Business
You can build a strong foundation on CSR values when you make them clear, concise, and convenient to access by both employees and consumers. Ultimately, you will see greater company unity and increased customer loyalty.
Here are three ways to have a CSR-centered business.
- Write clear values for your company that address philanthropic, ethical, legal, and economic concerns to drive your company’s actions.
- Educate your employees on your company values so everyone can aim for the same standard.
- Share your values with customers, shareholders, and your community through marketing messaging, conversations, and donations of time and money.
3 Ways to Incorporate ESG in Your Business
Establishing a high ESG rating will reflect more positively on your business as others will see proof that your company values aren’t just words in a marketing campaign. Because of this proof, you may see more investors, customers, and loyal employees.
Here are three practical steps you can take to move towards a better ESG rating.
- Review your company’s activities by regularly tracking your emissions, material sourcing, and labor practices to find areas where you could improve.
- Set Goals that are specific for your industry and encourage your employees to strive to reach those goals in how they operate within their area of the company.
- Educate employees about how to complete their job sustainably through regular reports on where your company currently falls, where you want to see your company, and actionable steps to achieve that goal.
Check out this video to learn more about how ESG creates value.
Share Your New Values with Your Customers
After you have established new values that reflect current CSR and ESG practices, then it is time to share those values with your customers. They will want to know that working with you also supports the environment and society.
Do you need support in creating marketing centered around your new business values?
Contact Televerde to discuss the best way to spread awareness and attract like-minded customers.