Corporate Social Responsibility (CSR) is a concept that has been present in the fashion industry for many years. However, as society’s interest in environmental, social and economic problems increases, their relevance grows exponentially for the most conscientious businesses. In this way, CSR has become an essential factor to multiply the value of business, especially textile companies in which sustainability has become a priority in recent years. Find out how you can quantify the performance of your Corporate Social Responsibility program and turn CSR into an indicator to measure the value of your fashion business.
Let’s start by laying the foundations, what is CSR? On many occasions, Corporate Social Responsibility and sustainability are often used as synonyms, but we must keep in mind that they are different but complementary concepts. According to the GREEN PAPER, Promoting a European framework for Corporate Social Responsibility, CSR consists of “the voluntary integration by companies of social and environmental concerns in their business operations and their relationships with their partners. Being socially responsible does not only mean fully complying with legal obligations, but also going beyond compliance by investing more in human capital, the environment and relationships with stakeholders”.
In general terms, we could describe CSR as the way of conducting business taking into account the impacts generated by its activities on its customers, employees, shareholders, local communities, the environment and society in general. In this way, CSR is a transversal concept that affects different areas of management in companies.
Social Responsibility and sustainability are two concepts that complement each other but are not replaceable
Despite the fact that the presence of ethical principles in decision-making constitutes the central element of Corporate Social Responsibility, we cannot equate CSR and sustainability. Being sustainable extends to all the company’s purchasing, manufacturing and distribution processes, the core of its business strategy. Therefore, in the fashion industry, Social Responsibility and sustainability are two concepts that complement each other but are not replaceable.
Now, what are the advantages of starting a CSR program in your company?
Corporate Social Responsibility has many advantages that can be applied to any fashion brand, regardless of its size. Among them, we can find the following:
- Improved brand reputation. The value of the fashion brand is linked to the expectations of the interest groups. If one of the most relevant expectations is a socially responsible behavior, the CSR of a company helps to build the positive perception of the brand.
- Increased sales and customer loyalty. We’ve mentioned it multiple times, your customers are willing to pay more for brands that are aligned with their own belief system. If your business demonstrates the positive impact that its activity has on society, this will also be reflected in its commercial performance.
- Talent attraction and staff retention. Employees of organizations with consolidated CSR programs are more committed to the company and have greater job satisfaction. Employee engagement can lead to both cost savings and growth opportunities.
- Greater access to financing. As with sustainability, Social Responsibility is an asset that is valued in the stock market. Strengthening the CSR of your brand can be a very smart move to improve the position of your fashion company in the stock market.
The actions developed within a Corporate Social Responsibility program can refer to a wide range of initiatives, from donations to charities to developing a fairer trade system. Below we break down some of the main approaches to CSR.
Environmental CSR, what is it?
Environmental CSR seeks to reduce any harmful effect that a company’s production and commercial processes may have on the environment. In this sense, the activities to achieve it can focus on:
- Use cleaner energy
- Reduce water use and emissions
- Improve waste management
- Increase recycling
- Promote greener trade policies
CSR and fair trade, how are they related?
Fair trade focuses on protecting the rights of workers throughout the supply chain. Treating your workers and suppliers fairly and ethically is the most efficient way to demonstrate the effectiveness of your fashion company’s Corporate Social Responsibility.
This term usually implies a socially responsible supply, which focuses on achieving the well-being of the worker, while promoting the conservation of natural resources. It’s closely related to the purchasing practices of the business and the steps it takes to ensure that both the company and its suppliers respect the rights of workers. Objective that is shared with the creation of a code of conduct within the company.
CSR and commitment to the community, how to achieve it?
Commitment to the community is one of the key pillars of Corporate Social Responsibility. This commitment can take many forms, among the initiatives developed we can find the following:
- Support local charities
- Sponsor local events
- Participate in community projects
For most fashion brands, getting involved in the CSR of the communities related to their product is a benefit. To do this, simply look for opportunities that imply advantages for both your business and your community, for example, supporting the schooling of local producer communities.
The implementation of these CSR initiatives won’t only be significant from an environmental, social and ethical point of view, but also financially. To find out, it will be necessary to measure the effects of your Corporate Social Responsibility program.
How to measure the performance of CSR programs?
Without evaluation it’s impossible to know the progress of the brand. Measuring the impact of CSR is extremely important as it will allow you to:
- Communicate the impact of your activities to your stakeholders
- Improve decision-making as you progress through your CSR programs
- Align your activities with corporate goals
One of the most significant barriers to the implementation of CSR has been the difficulty in measuring the impact of the activities implemented. However, your evaluation may be similar to the methods used to estimate the effectiveness of other activities:
- Goal setting. It will be essential to define short and long term objectives to establish benchmarks and define measurable key performance indicators.
- Value assessment. Through the evaluations developed by BCOME, it’s possible to obtain an indicator that represents the good practices developed from corporate at the environmental, social, traceability and circularity levels. Although this indicator isn’t a direct reflection of the company’s CSR performance, it does help determine its degree of compliance.
- Follow-up of the results. This data can help determine if the program is achieving its stated goals, as well as help make informed decisions based on the data obtained.
As we mentioned at the beginning of the article, CSR and sustainability are closely related. However, it’s important to remember that to be sustainable it’s not enough for a brand to have a Corporate Social Responsibility department. It’s essential to assume ethics as the company’s DNA and extend it to all its processes. At BCOME we have the necessary tools to help you achieve it, let’s create change together!