The role of corporate social responsibility in enhancing brand image

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Nov 29, 2023

Corporate social responsibility – commonly called CSR – has fast become an integral part of modern business strategies. Companies around the world are now recognising the importance of CSR activities, not only in contributing to the well-being of society, but also in shaping their brand image.  

What is corporate social responsibility?

Corporate social responsibility refers to the commitment organisations make to carry out business in a responsible and ethical way. This commitment goes beyond profit-making and considers the wider impact of business actions on society and the environment. It involves various activities aimed at addressing social and sustainability issues, such as philanthropy, sustainable practices, business ethics and ethical sourcing, and community engagement.

“CSR is generally understood as being the way through which a company achieves a balance  of economic, environmental and social imperatives (‘triple-bottom-line approach’), while at the same time addressing the expectations of shareholders and stakeholders,” explains the United Nations Industrial Development Organization.

“A properly implemented CSR concept can bring along a variety of competitive advantages, such as enhanced access to capital and markets, increased sales and profits, operational cost savings, improved productivity and quality, efficient human resource base, improved brand image and reputation, enhanced customer loyalty, better decision making and risk management processes.”

The link between CSR and a better brand image

Corporate social responsibility can enhance an organisation’s brand image in a number of ways. For example, organisations are likely to benefit from:

  • A stronger reputation. One of the most direct effects of CSR is the enhancement of a company’s corporate reputation. When a business engages in CSR activities aligned to societal values and expectations, it builds a positive reputation and brand awareness. This in turn contributes to a concept known as brand equity, which refers to the value and strength of a brand name in the minds of consumers – and a well-executed CSR strategy can significantly boost customer-based brand equity by associating the brand with positive social and environmental outcomes.
  • Enhanced brand loyalty. CSR initiatives can foster a sense of connection and loyalty among consumers. When a company demonstrates a real commitment to social responsibility, particularly where this commitment aligns with the organisation’s wider brand values, it often resonates with the organisation’s target audience. And customers who perceive a brand as socially responsible are more likely to exhibit brand loyalty by making repeat purchases and even advocating for the brand, such as on social media channels. So brand loyalty can lead to increased sales and corporate performance, and even act as a buffer against competitive or economic pressures.
  • Increased customer trust. Consumer trust is a crucial component of brand image and brand management, and CSR activities – especially alongside excellent product or service quality – help build trust among consumers because they perceive socially responsible companies as more transparent and ethical. Trust, in turn, leads to enhanced customer satisfaction and long-term, positive relationships.

Measuring the impact of CSR on brand image

Researchers, behavioural scientists, and marketing professionals will use a variety of methods to understand the impact of corporate social responsibility on brand image.  For example, they might conduct in-person focus groups or brand sentiment analyses online. They could also run data analysis projects using survey responses and questionnaires focused on consumer perceptions of a company’s CSR initiatives, as well as of the brand more generally, and then explore the relationship between customer perceptions and purchase intention or sales revenue.

CSR and marketing research can also use different statistical techniques, such as structural equation modelling (SEM), to analyse data and examine the complex relationships between multiple variables simultaneously. In the context of CSR and corporate image, SEM can help assess the direct and indirect effects of corporate social responsibility activities on brand-related perceptions. It can also reveal mediating roles and moderating effects, providing a comprehensive understanding of how CSR impacts corporate brand image.

The future for CSR and brands

The fields of corporate social responsibility and brand image continue to evolve, as does research in both areas.

For example, CSR and brand professionals are keen to conduct future research so they can better understand different dimensions of CSR, such as:

  • Long-term effects. What are the long-term positive effects of corporate social responsibility initiatives on brand image, brand performance, and wider financial performance? Understanding these answers can help companies make more informed strategic decisions about their CSR activities.
  • Employee perceptions. How do CSR activities influence employee perceptions of their own organisations, and – consequently – their commitment to the company? This information, and getting things right, can help increase employee motivation, engagement, and retention. 
  • Quantifying brand value. Is there a more precise methodology for quantifying the positive impact of CSR on brand value? The development of new methods in this area could help support or build increased buy-in from senior stakeholders within organisations – stakeholders who ultimately determine which CSR activities are approved or not.

Emerging CSR trends

According to a 2023 Forbes article, 2023 CSR Trend Forecasts, some of the emerging trends in corporate social responsibility include:

  1. More emphasis on return on investment (ROI). In the current economic climate, it’s essential that CSR activities can demonstrate “direct ROI data to justify and secure budgets” and prove corporate social responsibility initiatives are determinants for business success.
  2. Social impact measurement. There’s currently a demand for social impact measurement to prove the significant impact companies have in enhancing or improving society. “Measurement must be comprehensive, transparent, authentic and truthful, and both the company and the nonprofits they work with have equal responsibility in creating and reporting on impact measurement.”
  3. New opportunities for underrepresented demographics. Businesses and organisations are increasingly adopting strategies that embrace diversity in a number of areas. Examples include “increasing shelf space for products created by minority-owned businesses; providing minority entrepreneurs with access to investment capital; minority employee, youth, and second-chance mentorship; DEI (diversity, equality and inclusion) grantmaking; and customer-facing fundraising campaigns.”

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