Financial improvements by CSR

 

As we already know that CSR has gained popularity in very less time and it is acting as one of the main aspects which are helping the firms to increase their profits and respect towards their company in society. As this is proven fact many large-scale companies are involved in it. There are different firms available in markets such as healthcare, financial services, software, goods consumers, and etc. they all spend a specific amount on CSR activities, there are two different models in CSR:

  • CSR-CA: company ability relevant CSR
  • CSR-NCA: company ability irrelevant CSR

The corporate company can choose any of the models to pursue it. Relating the CSR activities with profits is not an easy thing to understand but doing it is so easy by doing various CSR activities form the firm it would help:

  • Gaining brand reputation: by increasing the reputation of the brand it will get more name and fame all over the world due to which sales of a particular company will increase.
  • Transparency of the company increases
  • Cost saving can be done for CSR by cutting some unnecessary things
  • By involving better in CSR the firm will be able to attract the investors as people want to invest in a firm which has a low risk with better CSR the company is safe hence it will attract investors.
  • To get best out of the employees, the organization will be interacting with them continuously hence there will be an improvement in production which results in profits of the firm.
  • Going for CSR activities make the firm socially responsible, hence the firm will be completely transparent with their policies so it has a chance to attract more and more investors by which they can improve the condition of company economically

Here I can provide you a good example of Wal-Mart which was involved in CSR by which they were able to reduce the impact caused by environment and also save money by doing cost cutting on their value chain by deducting the inefficiencies. To be more progressive and helpful for CSR they have reduced packing by using disposals and used the investment in better routes. They saved $200 million by reducing their carbon footprint by using similar quantum. Many researchers say that CSR is wealth protective effects than wealth-enhancing effects. By practicing good CSR company can reduce financial risk and avoid adverse risk from the balance sheet of the firm.

 

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