In my previous blog titled Corporate Social Responsibility: What It Can Do For Your Company, I wrote about how embracing corporate social responsibility is not only the right thing to do, but the most fiscally responsible thing to do. For firms, embracing corporate social responsibility improves relationships with stakeholders and increases employee retention and morale. In this blog, I want to talk about two of the world’s most socially responsible companies and how they integrate their business operations with their CSR practices.
Patagonia: The Standard Bearer
Like peanut butter and jelly, Patagonia and CSR go hand in hand. If you have not read Patagonia founder Yvon Chouinard’s book Let My People Go Surfing, you are missing out on the story of how Patagonia became the pioneer of CSR. In addition, Chouinard talks about the CSR values that are nearest and dearest to his heart. From the very beginning, Patagonia (known as Chouinard Equipment when it was founded) was a company that was focused on the sustainability and the environment.
In the late 1950s, mountain climbers used pitons that were placed once, then left in the rock. Some climbs required hundreds of pitons to be used. Chouinard witnessed firsthand the degradation of mountain climbing routes throughout the western United States.
Chouinard viewed this more as a way to help the environment and much less as an opportunity for a business. It was not until 1965 that he decided to amp up production. During the late 1960s, Chouinard’s main goal was to create climbing gear that was stronger, lighter, simpler, and more functional.
Eventually, Patagonia grew into one of the premier outdoor clothing and gear companies in the United States. However, they never lost their vision of having a company that is beneficial for all stakeholders involved. From Patagonia’s website, here is how they view CSR, as you should notice, stakeholder theory is something they heavily believe in.
“Corporate Responsibility (CR) is a broad-based movement in business that encourages companies to take responsibility for the impact of their activities on customers, employees, communities and the environment. Companies committed to corporate responsibility also agree to abide by international labor and human rights standards.”[¹]
Below is a list of how Patagonia ensures they operate as ethically and morally as possible:
- All suppliers of goods are required to sustain fair labor practices, safe working conditions, and environmental responsibility.
- All mills are required to use organic materials. In addition, all steps in the production process are traceable, even for consumers.
- Throughout their supply chain, all workers must be paid a living wage regardless of which country they are from.
- Any clothing bought from Patagonia that is damaged can be sent back to Patagonia free of charge for repairs, Repair, Reuse, & Recycle.
- Patagonia pledges 1% of pre-tax profits to preservation and protection of the natural environment. They were the flagship firm for the 1% For the Planet program, which includes about 1,800 firms. They collectively raised over $175 million last year.
- Patagonia often lobbies politically for policies and bills that support the environment.
This is, by no means, an exhaustive list. The amount of good that Patagonia does for their stakeholders is immeasurable. When consumers buy the Patagonia brand, they do not only get a high-quality product, they are supporting ethical and moral business practices. Patagonia is as much an organization as it is a movement.
Coca-Cola: A Prime Example of Operational Integration
Coca-Cola was founded in 1886 as a medical solution to a plethora of problems that John Pemberton, the founder, said could be fixed by drinking the product. Though these claims were false, it was the first step into creating a company that is known worldwide.
Coca-Cola did eventually move away from being a medical product and instead, became an affordable drink for the masses. Coca-Cola may have not been founded on the principles of CSR as Patagonia was, but today, it has a few notable CSR initiatives.
What is the one common denominator between every Coca-Cola product? All of their products contain water. Whether it is Coca-Cola classic, Dasani, Minute Maid, Fanta, or Sprite, they all require water. Coca-Cola is well known for their soda that can be found almost anywhere on the planet, but their CSR initiatives do great work as well.
Coca-Cola’s two most recognizable CSR programs are their Save the Polar Bears campaign and their Water Stewardship campaign. I specifically wanted to highlight their water stewardship program because it aligns so closely with their business operations. This is something that all firms should be focusing on.
You do not need to go outside the box to become a firm that embraces corporate social responsibility. Firms that consider what they do as a company and integrate what they do into their CSR programs will be most successful. Coca-Cola knew that having freshwater sources was key to their survival as a company, so having a water stewardship program is not only beneficial to the communities in which they have helped create new freshwater sources but for themselves as well.
If this sounds selfish to you, it may be so. Coca-Cola also is not the most criticism free example of a company that embraces CSR, many of their core products contain amounts of sugar that has contributed to the worldwide rise of obesity.
However, Coca-Cola has successfully cultivated 248 water partnership projects in 2,000 communities across 71 different countries. In addition, over the past thirteen years, they have reduced the amount of water in each liter of their products by 27%. There is no denying the success of this program,
“According to their infographic on Water Replenishment, they have invested 300 million dollars to provide sustainable and safe water access to 2,000,000 people in Africa who had previously unreliable freshwater sources.”[²]
Aligning Values with CSR is Key
There are hundreds more examples of companies that have embraced corporate social responsibility. The ones who are most successful have aligned their business practices with their CSR initiatives. When it comes to CSR, going outside the box may actually be detrimental to your success. Whether its Patagonia and their clothing line, or Coca-Cola and their drinks, when companies align values with CSR, they are much more likely to have a positive effect on their stakeholders.
1. Patagonia Website CSR
2. Coca Cola Water Replenishment Info
1. Patagonia Company Logo
2. Coca Cola Company Logo