Social Responsibility is Good for Your Bottom Line

During these chaotic times, it’s tempting to view corporate social responsibility (CSR) as an optional extra — nice to have, but hardly a top priority for brands that are struggling to meet surging demand, or which are in the process of pivoting into new markets.

Even amid the chaos of a global pandemic and widespread protests, consumers are paying close attention to the provenance of the products they’re buying. According to a new Akeneo survey, 61 percent of brands and retailers now say product information relating to ethical manufacturing, environmental factors, and sustainable sourcing is a top priority for their purchasing decisions. In fact, after controlling for price, our results show that brand values are now the top driver of purchasing decisions.

What’s going on? Part of the issue may be that socially conscious millennials are climbing the career ladder, and moving into positions where they’re making purchase decisions. Almost three-quarters of millennial workers are now involved in purchase decisions for their companies, and about a third report having sole control over at least some procurement processes. Millennials have already driven a shift toward CSR in the B-to-C marketplace, and they’re bringing their values and priorities into the workplace, too.

Another factor could be that buyers are starting to realize that sustainable, ethical sourcing simply makes solid business sense. Brands are building for the future, and they’re well aware that both regulators and consumers are paying ever-more attention to unsustainable and unethical manufacturing practices. For many companies, paying a little extra to get more sustainably and responsibly produced products looks like a simple and effective way to future-proof their supply chain.

Finally, of course, we’re living through a moment in which brands around the world are struggling to communicate their values effectively at a time of hyperpartisanship and political divisiveness. Tweeting pleasant-sounding messages calling for an end to racism is all very well, but consumers have had their fill of platitudes: they want to support brands that have an authentic, demonstrable commitment to the values they espouse.

That push for impact and authenticity means that brands need to make sure they’re baking their values into all of their purchasing processes. It’s all too easy for shortcuts and careless purchasing decisions to be taken as signs of hypocrisy by consumers who are primed to believe the worst of the business community. On the other hand, brands that put time and care into their procurement decisions are seen to be putting their money where their mouth is, and they net corresponding rewards in terms of consumer loyalty and brand reputation.

Understanding exactly why buyers make specific purchasing decisions is an inexact science, and with the global marketplace in flux it’s wise to avoid making sweeping pronunciations about what really sells. Still, one thing is clear: social responsibility is now emerging as a key differentiator for both B-to-B sellers and B-to-C brands. To succeed in an increasingly competitive marketplace, brands should focus on communicating their values clearly and effectively to potential buyers. This is a trend that brands ignore at their peril, even — and perhaps especially — during these turbulent times.

Mike Bender is the North America vice president of sales at Akeneo, a global leader in product experience management (PXM) solutions for merchants and brands.