How to Track Your CSR & ESG Impact
Having a CSR program or ESG standards is normal these days. Most companies find ways to give back to their community or to evaluate their investments and spending from a more holistic viewpoint. It’s no longer just about the bottom line, but what’s often called the triple bottom line—the idea that it’s not just your profit that matters, but also people and the planet. By evaluating your decisions from this higher level, your company can make decisions that help drive revenue, reputation, and renewal in your community. While this is important for many reasons, it only matters if you track your CSR and ESG impact in ways that showcase all the ways your CSR and ESG programs are making a difference.
What is CSR?
CSR, or corporate social responsibility, refers to when a company makes decisions based on how it will impact its community instead of just how it will impact its bottom line. This includes supporting local nonprofit causes through donations and volunteering, working to make the company’s supply chain more sustainable, and other ways to positively impact the community and the environment. CSR programs often involve bringing employees to volunteer or donating financially through grants and sponsorships to nonprofit partners.
What is ESG?
ESG stands for Environmental, Social, and Governance, all of which are standards investors use to evaluate whether or not to invest in a company. The term can also refer to using those standards for your company’s internal decisions, too. When ESG influences who your company might use for a supplier or partner with, it shifts your company’s decision-making away from solely profit-based decisions to longer-term, more sustainable actions. It’s important to note that your company can still make a meaningful profit while prioritizing ESG in your decisions—it may just mean that you focus on different areas of the market or avoid certain product lines. For example, it might make more sense to invest in a higher-quality, longer-lasting product that can be developed more sustainably.
Why are CSR and ESG important?
CSR and ESG have become important components of every company. These efforts are some of the first things that many investors, partners, and reporters will ask about a company—in fact, you’ll see that most companies feature their efforts prominently on their website and in other marketing documents and materials. Showing how your company is giving back to the community is an important part of modern business, and prioritizing CSR and ESG can help in many unexpected areas.
Managing your company’s reputation
By creating robust CSR and ESG programs, you can boost your company’s reputation in the community, especially if your reputation has recently taken a hit. Giving back in ways that help your community can help showcase the impact of your CSR program and build goodwill for your company. It’s important to give back consistently, not just in the wake of a crisis that paints your company in a bad light.
Different generational expectations for corporations
For many younger generations in the workforce, especially millennials and Gen Z, there is a higher standard for what kinds of contributions and connections to the community your company should have. Tracking the impact of your CSR program and the impact ESG has had on your decisions can help when recruiting younger talent, especially if you find ways to showcase how they can be a part of positively impacting the community.
Social impact as a market differentiator
For many younger consumers as well, seeing how companies use their profits to make an impact through their CSR programs can set a business apart. Giving back a portion of your profits to nonprofit partners, donating a certain amount for every product, and other tangible CSR program strategies can help your product stand out in a crowded field and build a deeper connection to your brand. By showing the impact of your CSR program through meaningful stats, you can drive home that your company is worth patronizing.
Appeal to investors
Include reports on the impact of your CSR program in your investor relations materials and in every pitch deck. Many investors have started to think about the sustainability and community impact of the companies they support—by illustrating how your CSR and ESG programs are having an impact, you can build good faith with potential investors and keep current investors happy.
Increasing pressure globally
Government regulations vary throughout the globe, including some places that place stricter requirements on corporations and their responsibility to the public—the European Union being a prime example. By having robust CSR and ESG programs and tracking the impact of your CSR and ESG programs, you can make sure that your company is in good standing, whether it comes to reputation or regulation.
Tracking Your CSR Program’s Impact
Tracking the impact of your CSR and ESG initiatives is an important step in giving back. By providing data about the impact your company had, you can help justify the work of your CSR program as well as showcase to your community the ways you’re giving back.
Ask Your Nonprofit Partners for Data
It’s important to make clear what kind of CSR and ESG data you expect your nonprofit partners to report. Tell your nonprofit partners what data you need when they apply for or receive a grant or sponsorship from your CSR program. By having clear expectations and a simple process, you’ll collect more high-quality data that you can then use to track your CSR program’s impact. Tools like DonationXchange can help you automate data collection with your partners as well as aggregate all of your CSR impact data into one cohesive report. Automating those tasks will make it even easier to track the impact of your CSR program quickly and effectively.
Automate Your Reporting
Building a CSR impact report can be time consuming and challenging. By choosing a CSR software that comes with built in reporting, you can track your CSR efforts easily with just a few clicks. Tools like DonationXchange allow you to easily pull numbers from grant and sponsorship applications, set automatic requests for data from your nonprofit partners, and customize your tracking for specific periods of time or categories—all of which make it easy to track the impact of your CSR program efficiently.
Think Qualitative AND Quantitative
Stories of the people whose lives your company has impacted are some of the most powerful things you can share. That personal connection can make all the difference, as it will mean much more to the general public and increase your chances of getting things like media coverage of your corporate social responsibility programs. Stories that show how your support relieved suffering, transformed someone’s life and future, and helped when there was no other way will stick with your audience and customers for the long haul. If you can tie those stories to something local to your company, it will go even further.
While stories can make all the difference, quantitative measures matter, too. It’s important to gather real, impressive numbers that showcase the scale of your support. Try to find ways to pull all of your giving together under a few big categories, like the number of people served and the number of services provided. It can be hard to translate these numbers across different programs and areas, but thinking through how you’ll do that on the front end of providing grants will go a long way when you’re gathering data for reports.
Finding ways to track your CSR impact effectively can help showcase the success of your CSR and ESG programs and make sure that your CSR impact doesn’t go unnoticed. You can use these automated reports to inform investor outreach, employee engagement, and even marketing and public relations efforts. Make sure you find an effective tool to track your CSR impact.
Businesses choose DonationXchange to handle their charitable giving processes because our platform saves hundreds of hours in phone calls and administrative work. With DonationXchange, you can track your impact on the community and generate year end contribution reports to showcase the effects of your CSR efforts.
How DonationXchange Can Help:
• Create & Track Fundraisers, Scholarships, Grants & More!
• Manage & Grow Donor Base
• Process, Track, and Analyze Donation Requests
• Manage Volunteer Opportunities
• Supercharge Employee Engagement
• Champion the Causes that Matter to YOU!