By Shilpa Prasad, Growth and Partnerships at YouNoodle
It is a known fact that companies with strong CSR programs distinguish themselves in the marketplace, establish strong bonds with clients, customers, employees, and policymakers, and provide unique opportunities for leadership development.
Every year, Fortune 500 companies spend $15.2 billion on corporate social responsibility or CSR initiatives. Beyond goodwill, these massive budgets are allocated to reap benefits for corporates, such as investing in innovation and R&D, brand differentiation, customer engagement, improving employee engagement, and long-term sustainability.
Emerging leaders in the corporate world are throwing out old-school practices to invest in the greater good. The evolution of CSR is upon us and startups are providing more and more traction as ideal corporate CSR collaborators.
The good news is that not only are companies “creating real value through their environmental, social, and governmental activities through increased sales, decreased costs, and reduced risks,” but also that “some have developed hard data to measure even the long-term and indirect value” of such programs.
While some corporate leaders have been well-meaning advocates for corporate social responsibility, early adopters have been concerned that CSR will only catch on in a serious way if we can prove its value to the financial bottom line, and what better way to do it than on the power of startups.
Here are a few corporations that are shaking things up and shaping a new era of CSR by investing in startups that can make a greater impact on the world and their company.
Innovation & R&D
Innovation and R&D drive CSR efforts to help corporations create products, services, and possibly new lines of business that can create social impact.
Unilever wouldn’t have a new shampoo if not guided by efforts to invent a shampoo using less water (and therefore fewer resources and lower costs). But there’s an even more impactful and strategic experiment to achieve these innovative incentives.
Salesforce has always been a leader in CSR, committing 1% of time, product, and equity to social good from its inception. Salesforce Ventures is their latest leading endeavor, a $50M impact investing fund that backs startups improving workforce development, environmental sustainability, and equality.
These aren’t merely social impact investments but strategic alignments that coalesce with Salesforce’s mission to become the world’s number one cloud ecosystem. Investing in these startups propels Salesforce on this trajectory by giving them opportunities to derive insights from emerging innovations and leverage their financial resources to scale what’s working.
These startups also serve as early investments in long-term partnerships where merger and acquisition opportunities may arise, and Salesforce will be the first to know. But Salesforce isn’t alone — corporations like Google and Intel are among the ranks of corporate impact funds. Recently, Campbell’s’ soup has followed suit investing $125M in food startups, another strategic investment considering that small food businesses drive 96% of annual growth in the industry.
Bolder Brand Differentiation & Customer Engagement
When TOMS first launched, it was a whole new type of shoe company — the impact was baked into their core business model and their product. A decade later, CSR initiatives like Pepsi & Coca-Cola’s sustainable water bottles no longer get the same brand differentiation or customer engagement.
9 out of 10 consumers now expect corporations to be socially responsible and 35% will stop buying from brands who they think are unethical. Donating to charities or creating foundations no longer makes corporate brands stand out as exceptionally impactful despite their good intent.
But some corporations are changing the game (and we are proud to be part of their journey)
Take Chivas — a whiskey company founded in the 1800s. Chivas launched a business competition accelerator in 2014 which gives 1M dollars to impactful startups each year. Beyond the financial benefits, startups receive global media exposure, accelerated learning, and access to a global community of support (including celebrities like Eva Longoria and Halle Berry). Their alumni to date have benefited over 300,000 lives in 40 countries.
This age-old alcohol company is turning the heads of both new and old customers by differentiating itself from other alcohol companies, opting to spend $1M on an innovative investment for a better world and not a 30-second Superbowl ad.
Booking.com’s Booster Programme launched another CSR initiative to invest in long-term solutions for sustainability. The Booster Programme exists to accelerate the startups that are driving sustainable tourism with the resources they need to get to the next level.
Booking.com’s new initiatives are proof that engagement like this can work. BookingCares — the CSR arm of Booking.com — gives on-the-ground volunteer opportunities for employees to improve the local destinations that they spend each day bringing customers. So far, employees have volunteered over 76,000 hours in 178 destinations for 194 projects, ranging from cleaning up the area or helping preserve authentic community and culture.
It’s not just an investment for sustainable tourism now, but for the future of tourism, and social impact along the way.
More power to cutting-edge corporates that are shifting their budgets to invest in social good startups and reinventing CSR.
If you are interested in finding out more about leveraging startups for your CSR initiative, email sales@younoodle.com.
Research by Cat George
