Millennials and CSR

Fortune 500 firms currently spend more than $15 billion per year on corporate social responsibility (CSR) activities – a number  that researchers say is rapidly rising. Whereas companies generally used to have very small CSR divisions, these teams are growing and taking on more responsibility within their corporations. While the core tenet of increasing value for stockholders still holds true, companies have shifted to acknowledge that sometimes dedicating resources to CSR initiatives will have that intended effect. The opposite is also true – CSR is helping companies grow and be more successful – through improved recruitment, risk mitigation, better brand differentiation, and more.

Particularly in today’s digital climate, CSR is necessary. Companies used to be able to hide behaviors they were less proud of, but now employees and mere passers-by have the ability to act as whistleblowers and draw significant coverage via social media or other tactics. Uber is an extreme example of this issue, where a female engineer wrote a blog post that gained traction in ways it could not have without social media. Thanks to smartphones, even customers can share shocking sights – as United Airlines learned the hard way when they dragged a passenger off a flight, then gained national notoriety for it.

CSR is relevant to millennials both as employees and as customers. A study done through Stanford Graduate School of Business in 2006 found that over 90% of MBA graduates were willing to forgo financial benefits in order to work for a more ethical organization with a reputation for good corporate social responsibility. As the demand for CSR has grown exponentially in the past eleven years, it’s realistic to imagine that almost all graduates would fall into that category by now. In addition, according to Cone Communications, 76% of millennials consider CSR when choosing where to work. The best companies, that want to have the choice of the best possible employees, would be smart to offer things like volunteering, corporate matching, and a values-based culture that feels authentic to potential employees.

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As customers, millennials represent about $2.45 trillion of spending power, so they’re clearly a market worth targeting. According to another study from Cone Communications, millennials are the most likely group to seek out responsible products (85% vs. average of 79%) and are most likely to hold companies accountable for producing and communicating results of CSR efforts. We’re an inherently skeptical generation, accustomed to the accessibility and volume of information, and we translate that to the companies we buy from. If your company isn’t seen as trustworthy, you’ll have a much harder time convincing millennials to choose to purchase your products.

In addition, according to the first report from Cone Communications, 93% of Millennials say they have a more positive image of a company when it supports a social or environmental issue. As such, to some extent corporate social responsibility helps insulate a company’s reputation. CVS/pharmacy made the difficult decision to stop selling cigarettes, and was able to demonstrate measurable results that cigarette sales overall decreased, and had a stronger brand by doing so. If companies like CVS put energy into building up an authentic brand based on meaningful CSR initiatives, they’ll be more likely to weather bad PR if they ever find themselves in a bad situation.

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While this creates a much more challenging environment from one perspective, it also opens a wide range of opportunities. As we learned during Julia’s presentation on Aerie last week, companies benefit when they can successfully leverage their customers. By encouraging its customers to share images on social media with the hashtag #AerieREAL, Aerie was able to get a lot of free, good PR. Though this could always backfire, an authentic company engaging with its customers authentically is best positioned to be successful through endeavors like this one.

The smartest companies, when approaching CSR initiatives, recognize the value of social media and digital business. These are the realities of today’s business environment, so leveraging them instead of working in spite of them will show companies greater success in the long run. 72% of executives have used social media for their CSR work, and 59% believed it had a positive impact on their interactions with customers, according to Weber Shandwick. With social media as a relatively inexpensive research with a seemingly limitless reach for a strong brand or initiative, companies will be smart to follow the lead of American Eagle and Aerie.

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I’ll be discussing corporate social responsibility through a case study of Dell Technologies in my presentation on Wednesday, so thought some context on corporate social responsibility and particularly our generation’s interactions with CSR could be interesting. I hope you all enjoyed it.

7 comments

  1. I’m looking forward to your presentation tomorrow! CSR has been a huge topic of conversation, not only in class, but also in my own and my friends’ job searches. My friends and I, like the 90% of MBA graduates surveyed in 2006, agree that we would prefer to work for a company that emphasized CSR, as well as collaboration, positive leadership, and goal-oriented, motivating work. While we all applied for internships, and now, full-time positions, we look for and pursue companies that do more than solely pay a lot of money, but also provide some of those intangibles. You provided great insight on this subject by including both CVS and Aerie!

  2. Nice post. I do think it could have been a little bit more focused on the digital business side of things. Just be sure you make that a central part of the presentation. It’s there, so just be sure it gets brought out.

  3. I can’t wait to hear more about how this was applicable while you worked at Dell–I’m also a Managing for Social Impact co-concentration, so this will be very interesting to see how it connects to social media and digital business! One question that I’ve been asking frequently in another class of mine is whether or not these companies should be doing these CSR initiatives for public recognition and customers or whether they should be focusing their CSR efforts towards employees for internal motivation and connection to a greater purpose.

  4. This is an interesting topic. In my marketing class last semester, we spent several days discussing CSR in marketing campaigns. At the beginning of the first class, most of us applauded TOMS’ efforts of donating a pair of shoes for every pair purchased, but by the end of our discussion, we realized that their brand was largely based off of this single CSR initiative, and we thought it exploited the buyer a bit too much (if TOMS really wanted to pay it forward, they could do so without making it the centerpiece of their value proposition). Nonetheless, I too appreciate companies that have a self-driven CSR mindset. Looking forward to your presentation!

  5. Nice post! CSR is definitely on the rise and I believe it is partially due to Millenials becoming the largest active population in the workforce. CSR is basically a second value proposition that connects with us and I find myself always checking the mission statement of new companies that I read about nowadays. However, I think some industries may not be fully transparent with their CSR. One example I remember is eggs and the concept of “free range” and “cage-free” not being all that green and ethical. Here’s the link to the documentary if you’re interested!

  6. “Over 90% of MBA graduates were willing to forgo financial benefits in order to work for a more ethical organization with a reputation for good corporate social responsibility” — this is a HUGE stat for me! Surprising, to be honest, although the key word here for me is “reputation” — how are companies publicizing those reputations through social media and leveraging them to curate their images, both in recruiting talent and in gaining/retaining consumers? Learned a bit more about that in your presentation today, and would love to learn how Dell’s efforts compare to those of other companies.

  7. It’s really great to see companies taking on initiatives with csr in mind. I wonder if the prevalence of social media could be used even more effectively to either promote companies through their social responsibility initiatives or even encourage other companies to join in on the corporate social responsibility mindset. Also would be interesting to look into how csr campaigns influence the financial success of companies. For example, everyone thinks of uber as the bad guy with a microscopic moral compass, yet they dominate the market.

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