How can the four levels of CSR be applied in retail
Corporate social responsibility (CSR) has become an important area where retail businesses can differentiate themselves. The benefits of CSR are clear – not only making a meaningful difference but also creating more opportunities to engage your customers and align your business with consumer values. For retailers, this is especially important as global competition heats up and consumer budgets are more constrained. Here, it’s important to not only understand the theory but be able to see how it can be applied to the greatest effect. In this article, we refresh the predominant theory behind CSR strategies and look at the application of this theory for retail environments.
The 4 Levels of Corporate Social Responsibility
One of the most popular and applicable theories of CSR is Carroll’s Corporate Social Responsibility Pyramid, which is portrayed as follows:
Source: Wikimedia Commons
In this model, profitability is the most essential element and therefore should be at the foundation of CSR projects. This might sound counterintuitive, but without profitability, employees would lose their jobs before any positive impact from CSR could be realised.
Next is legal responsibility. This means that businesses need to operate in line with laws that govern the rights and safety of the wider community. Having a CSR project while polluting air and water systems or undervaluing your workforce, for example, shows that there needs to be an inextricable link between legal responsibility and CSR.
On the third tier is business ethics, which covers the area between legal responsibilities and doing what will be seen as right by society. For example, if an employee breaks a non-disclosure agreement to blow the whistle on a project that’s exploiting labour, the company has the legal right to fire that person. However, when looked at in an ethical light the right choice is to reward that person, fix the underlying issue and transparently and meaningfully commit to being a better organisation.
The final tier is philanthropic responsibilities, which deal with the expectation that businesses should give back to society. Today this is seen as a justified expectation because of the wealth that organisations receive from the work, infrastructure, assets, and support delivered by customers and employees. Another reason why this is a reasonable expectation is that without the organisation people would lack certain goods, services and economic benefits – and without the people, the organisation cannot achieve scalable or sustainable growth. One can’t exist without the other, so it needs to be a relationship of both give and take.
Keeping this in mind, businesses can develop CSR programs that meet each of these requirements in terms of their priority. Programs must be tailored so that they encapsulate a brand’s mission, values and audience so that CSR projects are as authentic and engaging as possible. This is where creativity and having a finger on the pulse of society is essential.
How is Carroll’s CSR Pyramid Applied in the Retail Industry?
So, let’s look at the application of the 5 levels of CSR in the retail industry.
Economic
Let’s start with shoe giant Nike, a company that is now listed as one of the green giants of the world. Their Move to Zero campaign focuses on their journey to a zero-carbon and zero-waste company, and it’s an immensely profitable one. In 2021, Nike posted a 196% increase in profitability over the last year following a 49% increase in profitability in 2019 – the best in company history. They’ve also helped create thousands of new jobs through their sustainable shoe design program, biomaterials research, recycling programs, and more. The more money they make through their sustainability programs, the more they’re able to pour back into CSR projects, connecting good deeds with profitability.
Legal
Laws are changing to incorporate the values we see in CSR initiatives, and it’s a smart move for retailers to start making changes now to make sure they are ready for the legal changes on the horizon. According to Barclays, UK retailers have cancelled over £7.1 billion in contracts over 2021 because suppliers weren’t meeting ethical and sustainability standards, including unfair working hours, lack of sustainable materials, and lack of membership to bodies that monitor sustainability and ethical standards.
Ethics
Ethics-based CSR is one of the most powerful spaces to move in because it’s about doing what’s right, not just what’s required by law. Retailer Baukjen is a great example of this because they actively champion slow fashion, support areas affected by poverty, make efforts to reduce carbon emissions and keep their business model small. Every item you buy is traceable so buyers can see its sustainable attributes, with all manufacturers signing a code of conduct that goes well beyond legal requirements.
Philanthropical
This is the most traditional form of charitable giving, usually in the form of volunteering or raising funds for a cause. With charitable giving having borne the brunt of COVID-19, it’s a wonderful opportunity for organisations to raise their public profile while raising money. A good example is Sainsbury’s, which raised £35 million for good causes in 2021, launched a digital version of their food donation program, supported 3,945 different charities through FareShare, and raised £130 million alongside Comic Relief.
At GoodBox, we know that retailers want to do more for their employees, their communities, and their causes – and we’re here to help make it easier. We specialise in connecting CSR fundraisers with forward-thinking, engaging fundraising technology. A standout example is our GBX Core.
The GBx Core is a contactless donation device that allows customers to make real-time contributions to your fundraising efforts. With a full HD screen, the ability to collect offline donations and a customisable interface, it’s the perfect smart fundraising box for retailers who want to make the most of their CSR efforts. To find out more, contact us today or request a pricing brochure.
