Who Cares About Social Responsibility?
If You Care, Maybe You Should do Business with Others Who Care, Too.
Written by Shannon McCarty, Director of Marketing
I often say, “People like doing business with people they know.” We all find ourselves occasionally looking for a person or firm to hire, and it’s natural to turn to business colleagues, friends or family for referrals and connections. Indeed, the who-you-know marketplace is alive and well. But it is changing, and our inquiries increasingly also include some version of the question, “Do they care?”
As the American population ages, and boomers are replaced by millennials, the way money is invested and spent is changing. Investments are still made because people want rates of return that will get them closer to their goals, but many—younger generations in particular—consider other factors, too. They tend to be more risk-averse than previous generations. They often also have more minimalist lifestyles, in part because of rapidly rising housing costs.
High on the list of considerations for young investors are the ethical and environmental values of people and firms with whom they work. More and more of them seek companies with sustainable practices, ethical business standards, and an overall culture of social responsibility. According to a 2014 Nielsen survey, more than half of consumers surveyed (55 percent) said they would pay more for products and services from companies that practice Corporate Social Responsibility (CSR).
CSR was historically used primarily as a backup plan—something to emphasize after a scandal, or when a company’s image otherwise needed to be resuscitated. Now that is changing; CSR is more the norm, something you see in everyday business dealings. This shift in focus is changing how business is being done, and it’s for the better in my opinion.
In the past, I have worked for companies that gave a nod to CSR and considered it “good form” to be involved in the community and/or philanthropic organizations. Although that influenced my view of those employers to some extent, I also knew that they were primarily focused on profits, rather than truly cultivating a culture of CSR. Time spent reaching out had to be “on my own time” and it was an extra-curricular (unpaid) activity. Because it was challenging to find “extra” time for these activities, my motivation sometimes lagged, and it was hard for colleagues and myself to get and stay involved.
I now recognize that too much focus on near-term profits is short-sighted, whereas cultivating an organization’s core CSR values not only leads to greater satisfaction and retention of employees, but customers, as well. That, in turn, contributes to the long-term growth and profitability of the business.
Viridian, my current employer, strongly emphasizes CSR, and actively encourages employees to participate in these activities, leading by example. Adriel Tam, our CEO, is on the Board of Directors for Seattle’s Ronald McDonald House. Not only does he regularly contribute his own time and money, but we close the office and our entire team takes time (part of it paid) to go there and prepare (and serve) meals to the families staying there. Many of Viridian’s Financial Advisors are also active on non-profit boards and committees.
Viridian employees are encouraged to participate in their personal charities, and to encourage others to do likewise. For instance, we recently held a food drive for a community food bank, and we reached a goal of 100% employee participation. The company also matches employee contributions to charities of their choice, and employee schedules are flexible to allow for community involvement, e.g., coaching, volunteering and participation in local non-profit organizations (e.g., Rotary Club).
Aside from the direct impact such activities and attitudes have on charities, they also engender in employees a sense of pride in their employer. Joining together to do good gives employees a deeper sense of job satisfaction, builds closer relationships between employees, and adds more meaning to life. Viridian’s focus on CSR has helped change my own attitude; I feel much more excited about participating and sharing my interests and activities with my colleagues and others. And I have no doubt that Viridian’s emphasis on CSR contributed to it beating out thousands of companies to be included in Washington state’s “100 Best Companies to Work For” in 2018 by Seattle Business Magazine.
As a consumer and saver, here are some ways that, when you spend and invest your dollars, you can identify companies with a strong emphasis on CSR. Look for companies that:
- (e.g., Chambers of Commerce) that help find solutions to local and state problems and issues, such as taxation, roads and highways, crime, etc.
- Prioritize helping others, not just by encouraging employee activity, but by organizing events through which employees can donate their time and energy to service projects, at least in part during paid work hours.
- Share their corporate culture and help you understand what they believe in.
I am proud of the fact that Viridian believes in the importance of CSR. In addition to our code of ethics (and compliance with financial regulations), we work hard to do our part. The company puts an ongoing emphasis on making our community a better place, supporting charitable causes, and encouraging employees to volunteer and make a difference, not just on their own time, but during work hours too.
If you think that your employer could do a better job of emphasizing Corporate Social Responsibility, speak up, and encourage your co-workers to do the same. If management hears from enough of you, they might put more emphasis on CSR activities. And lead the way by asking management if you could spearhead a CSR activity—such as a food drive for a local homeless shelter or food bank. Be part of the drive for greater Corporate Social Responsibility, not only as a consumer and investor, but by setting an example for your own company and co-workers.
Viridian Advisors is an SEC Registered Investment Advisor (RIA) with clients across the United States. Viridian offers financial planning, investment management, and tax services (through its sister company, Viridian Tax and Accounting). Shannon McCarty is Director of Marketing at Viridian.