The success of a corporation depends upon a lot many aspects, of which the CSR aka Corporate Social Responsibility is one of the significant aspects, given utmost attention in this technological era. It is because at one end, although the technology offers several opportunities for the corporate to develop and produce innovative outcomes, on the other hand, the very innovative developments might lead to pathetic side effects if not carried out with social responsibility and the classic example of the same is the water wastage/water pollution by the prominent beverage manufacturing companies.
Therefore, CSR is highly important, both for the constructive development of the company and the society but, how is it going to improve the financial accessibility of the corporation? Can it really do so? We have 3 significant factors to put forth, which can help you understand the correlation and effect of the CSR on improving the financial accessibility of the corporation.
Increased investors’ engagement
If a corporation’s CSR performance is better and greater then, it obviously means only fewer to nil risks are concerned with the corporation, which, naturally, interests the investors and urge them to engage more. Although investors aim for financial benefits while choosing to invest in a corporation, they certainly want those benefits risk-free, which, only a socially responsible corporation aka corporation with a better CSR rating can offer, undoubtedly. Therefore, more investor engagement means not only more capital but, also fewer chances of opportunistic behavior by the investors, which is certainly, desirable for the unrestrained growth of the corporation.
If a corporation is not so socially responsible but, yet, capable of producing astonishing solutions, it might still find financial relief in the name of eager investors but, not without facing any restraints. Such financial restraints might prove the hindrance to the absolute growth and freedom of the organization and therefore, to avoid them, the only way is to be socially responsible aka improve the CSR performance factor.
A socially responsible corporation naturally, tends to be more transparent with the practices and policies that attract not only the stakeholders but also the end- consumers, greatly! This, in turn, improves the sales performance of the corporation, leading the organization to a path of financial solidity and greater financial accessibility, appreciably. Also, being socially responsible is favored by everyone these days and therefore, could be one of the most expected characteristics a customer wishes to see in the corporation with whom or with whose products they deal with!