In both developed and emerging markets, Corporate and Social Responsibility has become an essential element for firms, with experts and scholars emphasising that CSR strategies enhance competitiveness and corporate reputation. They also involve practices and principles that firms follow to strengthen and create relationships with stakeholders and the environment. It has become a key element for global businesses due to increased environmental and ethical issues.
While it was widely popular in previous decades for companies to only focus on their bottom lines, a 2015 Nielsen survey revealed that 66% of online consumers said they would pay more for products or services from companies that invest in communities. The same survey also found that consumer goods brands with a commitment to sustainability outperform those that do not. Brands and organisations have also been forced to make operational adjustments whenever necessary – reactions toward the global financial crisis, SARS, the Ebola crisis, recession, and COVID-19 are prime examples.
Against this backdrop, the team at Culture Intelligence from RED engaged CSR experts in our national focus group on how Nigerian companies choose to be socially responsible to their communities and stakeholders in a post-COVID world and how CSR strategies have always affected their bottom-lines. All CSR experts selected across the country confirmed that their companies invest in their Corporate Social Responsibility initiatives, although with differences in intensity. All the experts agree that in a post-COVID world, CSR initiatives have become more critical for Nigerian businesses.
On whether CSR truly affects their organisations’ bottom-line and has been proven to improve profit, 92% say no, while 8% are uncertain that it does.
“Because CSR is not a single factor that drives profit —or better yet, clear numbers are yet to prove it – it might be difficult to link it to income generation directly or boosting profit,” said a CSR expert in the group. “In economics, companies are also advised to invest in more than one bottom-line. Apart from profit, the triple-bottom-line also demands a focus on people and the planet. It is like a cycle – companies have to be managed in a way that not only makes money, but also improves people’s lives and the planet. That way, customers can confirm that a company is invested in them and reward the company. You can describe it as ‘you have to spend money to make money”.
“If a company focuses on finances only and does not invest in its social capital, that company cannot see the whole picture, so it cannot account for the full cost of doing business,” he added.
“Maybe we should redefine Corporate Social Responsibility, especially for African countries,” another expert stated. “Rather than the investment that involves constant infusion of cash donations, we should make a business case for returns that can be measured through improved entrepreneurship, job creation and other measurable factors that are important to the African consumer. It also calls for issue identification, community engagement, and radar-focused investments to provide long-term impact for brands and the communities involved. Due to the pandemic, including an expanding Gen-Z segment, the consumer-mindset is changing, and the new revolution will fundamentally change the way businesses operate”.