Can Corporate Social Responsibility be an International Development Strategy?
Corporate social responsibility (CSR), simply put, is the way in which companies engage—whether it be locally, nationally, or globally—to do good. This can come in the form of consumer-targeted giving campaigns, cause marketing, corporate philanthropy, employee engagement, supply-chain transparency, or public-private partnerships for international development.
The term is commonly referred to as the “triple bottom line” of people, planet, and profit.
CSR is a business obligation to all stakeholders (consumers, company employees, shareholders, etc.), and it is ideally embedded within the fabric of a business’ core strategy. CSR directly links companies to the impact they have on affected communities.
Why would companies engage with the government to solve problems?
This may come as a surprise, but public-private partnerships between the U.S. Agency for International Development (USAID) and businesses are a natural fit. Both parties gain benefits and improve affected communities. It’s a winning strategy for all!
As USAID observed official assistance wane—from 70% in the 1960s to under 13% in 2012—it set up the Global Development Alliance in 2001, which institutionalized public-private partnerships around international development.
Very real and very cool benefits
Though companies benefit from these public-private partnerships in many ways, I’ll highlight three.
1) Enhanced Reputation/Boost in Brand Image
If done in a transparent and well-intentioned way, CSR strategies can increase employee engagement, thus improving employee satisfaction; give companies public-facing visibility on topical issues; and gain accolades from consumers and local communities.
Edelman’s 2012 goodpurpose study showed the power of brands engaged in good causes. The data is persuasive:
Not only are consumers making purchase decisions with Purpose top of mind, they are also buying and advocating for purposeful brands. 72% of consumers would recommend a brand that supports a good cause over one that doesn’t…71% of consumers would help a brand promote their products or services if there is a good cause behind them…[and] 73% of consumers would switch brands if a different brand of similar quality supported a good cause (Edelman, 2012)
2) Buy-in from Essential Stakeholders
USAID has a proven track record of cultivating strong relationships with governments and NGOs. The agency has deep expertise in local challenges and, perhaps more importantly, insight into solutions.
Partnerships with USAID lend businesses that issue-area expertise and credibility with key stakeholders. Companies can take the expertise and relationships to create commercial goods and services.
For example, USAID cites a partnership with PepsiCo (also a NFG Good Card partner) to describe how shared interests create innovative (and very cool) opportunities.
USAID is partnering with PepsiCo to help smallholder chickpea farmers increase their yield, which PepsiCo will turn into a high-energy paste that will be used by the World Food Program as well as sold commercially by Pepsi. This partnership is about addressing overlapping interests and leveraging expertise that are core to each of our organizations. (USAID, 3-4/2012)
3) Access to Markets
Companies see developing countries as potential business opportunities—for commercial projects and longer-term investments. By partnering with USAID for goodwill projects, establishing a local presence opens the door to future transactions.
Companies then have access to assist in creating positive public policy, which can improve upon market failures. This is a crucial piece that, without USAID, companies could not attain alone.
Allison McGuire is a Truman Security Partner. She is the Partnerships Program Associate at Network for Good.