The benefits of CSR, i.e. “good corporate citizenship” include-
1. Improved Financial Performance: Socially responsible business practices are linked to positive financial performance. Improved financial results are attributed to stable socio- political – legal environment, enhanced competitive advantage through better corporate reputation and brand image, improved employee recruitment, retention and motivation, motivation, improved stakeholder relations and a more secure environment to operate in.
2. Operating Cost Reduction: CSR initiatives can help to reduce operating costs.
Improving environmental performance e.g. reducing emissions of gases that contribute to global climate change or reducing use of a agrochemicals, can lower costs.
3. Brand Image and Reputation: A company considered socially responsible can benefit both from its enhanced reputation with the public as well as its reputation within the business community, increasing the company’ ability to attract and trading partners.
4. Increased Sales & Customer Loyalty: Businesses must first satisfy customers’ key buying criteria, i.e. price, quality, availability, safety and convenience. However, studies show an increasing consumer desire to buy (or not buy) based on other values-based criteria, such as “sweatshop –free” and “child – labour- free” clothing, lower environmental impact, and absence of genetically – modified materials or ingredients.
5. Productivity and Quality: Improved working conditions, reduced environmental impacts or increased employee involvement in decision – making, lead to – (a) increased productivity, and (b) reduced erro4r/ defective rate in a Company.
6. Ability to attract and retain employees: Companies perceived to have strong CSR commitments find it easier to recruit and retain employees, resulting in a reduction in turnover and associated recruitment and training costs.
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