The Role of Corporate Social Responsibility on Brand Value \ Dr. Melika Molk Ara

Fara Eghtesad Bein-al-Malal | Corporate Social Responsibility (CSR) has emerged as a significant topic within the field of organizational management over recent years, representing a comprehensive set of commitments that businesses uphold in order to preserve, care for, and assist society. In advanced societies, CSR has evolved into a broad business model and conceptual framework that addresses the responsible performance of organizations toward themselves, society, and the environment. CSR transcends mere economic and financial considerations, emphasizing the role of organizations in the social domain. In simple terms, CSR signifies that organizations are accountable to their communities due to their utilization of various resources, including human, natural, and economic resources. Contemporary management approaches assert that organizations are not solely responsible to their shareholders; rather, they must also consider the legitimate interests of all stakeholders. Therefore, CSR encompasses a wide range of activities aimed at integrating social, environmental, and ethical considerations into their actions and interactions with stakeholders. Prominent organizations and global brands allocate substantial annual resources toward their CSR initiatives, establishing dedicated units to address related issues in an effort to fulfill their responsibilities concerning social accountability. This raises the question: why is CSR important for leading brands and companies? Research has indicated that 66% of consumers are willing to pay more for brands that prioritize CSR. Additionally, 75% of consumers boycott brands that neglect sustainability efforts. From an employee perspective, 78% of staff members believe that if their managers place greater emphasis on social issues, they will afford them more respect; furthermore, 88% of employees value activities that have a positive impact on society or the environment. Recent studies reveal that 88% of young individuals consider a company’s commitment to CSR influential in their purchasing decisions. Investors also recognize the importance of this commitment; 79% of those investing in environmental, social, and governance (ESG) sectors deem it crucial how their capital is allocated. Consequently, renowned brands worldwide have recognized the necessity of fostering a positive perception among their audiences. It is evident that careful attention to, planning for, executing, and properly conducting CSR activities can enhance a company’s public image. It is essential to note that CSR primarily serves brands by providing value relative to the price charged, offering high-quality products and services, as well as ensuring excellent post-sale support, customer service, and civic objectives. Another significant advantage of prioritizing CSR is that it allows organizations to cultivate assets such as goodwill, trust, and a favorable reputation. Reputable businesses and leading brands regard these elements as some of their most valuable assets. By demonstrating a serious commitment to CSR, they signal to their customers and target communities the importance of these issues, encouraging them to engage with the brand, ultimately leading to stronger branding. CSR can be defined across various domains. For instance, in the environmental sphere, companies committed to CSR must adopt environmentally friendly practices and play a significant role in reducing greenhouse gas emissions, pollution, waste, and the depletion of natural resources. Ethical responsibility is another facet; it ensures that businesses consider fair commercial practices in all activities. This includes ethical and respectful treatment of employees, stakeholders, and customers, as well as addressing issues such as higher minimum wage standards. Thus, it is imperative for businesses to first recognize their social responsibilities and then align their strategies with prevailing economic, cultural, and social conditions to initiate relevant strategies and take actionable steps.

Dr. Melika Molk Ara
Senior Consultant at the Project-Based Organization and Social Entrepreneurship Researcher