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3 Tips for Getting Investors on Board With Your CSR Mission

Entrepreneur’s Organization is a global network of over 13,000 business owners. Learn how EO New Jersey helps over 100 business owners grow.

Contributed by Kevin Xu, CEO of MEBO International and co-founder of the Human Heritage Project.

Corporate social responsibility (CSR) is not a new concept. Companies have been publicly proclaiming their dedication to sustainability, philanthropy and diversity for decades. But only recently have the true benefits of CSR come into focus for the companies that embrace it.

CSR is more than a PR tool, though. Under the surface, it’s considered an essential element of your business model and a critical driver of your company’s bottom line. According to recent research, companies with well-defined social missions are more likely to attract loyal consumers, recruit dedicated employees, and be recognized as innovation leaders. They also enjoy easier access to finance and face fewer capital restraints.

Given these benefits, many investors take great interest in a startup’s social mission. An Edelman study found that 76% of investors expect companies to address one or more social issues and view CSR as an indicator of long-term viability.

Startups that embrace and exemplify a clear social mission from the get-go will have an easier time attracting much-needed backing.

Express Your Mission

The sooner you can effectively communicate your company’s social mission, the more time you will have to build trust and understanding with investors. These early conversations can be invaluable to your business, both to its short-term funding and long-term direction. For example, a potential investor could identify issues in your CSR plan that would prevent your company from achieving its goals.

In order for a CSR initiative to reach its full potential, a company and its investors must be on the same page, pulling in the same direction, and striving for the same goals. Follow these three tips to foster this alignment:

1. Be specific. Don’t make broad statements like “Our company is eco-friendly.” Instead, describe the specific steps your company is taking to protect the environment.

For instance, if you are proud to use sustainable ingredients in your products, provide a comprehensive list of those ingredients. Or if your company utilizes a zero-waste production process, map it out for investors. Put everything in writing to avoid confusion or misunderstanding.

Also set concrete, quantifiable goals. Investors appreciate entrepreneurs with big dreams, so don’t be afraid to aim high. As an example, Levi Strauss & Co. recently released a “Climate Action Strategy” with lofty environmental goals. By 2025, the company plans to reduce its greenhouse gas emissions by 45% and use 100% renewable energy at its facilities. Achieving these goals might mean slimmer profit margins for Levi’s, but investors still flocked to the clothing company after learning about its plans.

2. Express a compelling “why.” You, as the leader of the startup, should be personally passionate about your CSR mission. Otherwise, your efforts will likely come across as an artificial PR ploy, and investors will not feel compelled to partner with you.

If your company donates a percentage of its proceeds to charity, pick an organization or cause that is near and dear to your heart, and make it clear to investors why you have taken this path. Tell a unique and engaging story that draws in investors and sheds light on your personal passions. Weave this narrative into your marketing material and overall brand identity.

Starbucks CEO Howard Schultz, for example, has always been outspoken about his dedication to social responsibility. CSR is part of his personal brand, and over the years, his company has thrived because of his genuine commitment to ethical sourcingsustainabilitycommunity service, and employee wellness.

3. Find common ground. Do your research ahead of time. Before meeting with an investor, look into his or her portfolio and assess each company’s social initiatives. This will give you a good sense of the investor’s personal priorities. Then, during your meeting, be sure to explain how your company’s CSR feeds into that investor’s goals.

However, before partnering with an investor, don’t hesitate to reach out to a few companies within that investor’s portfolio. Get a third party’s opinion of the investor’s personality, working style, and overall value to the organization.

You should ultimately strive to partner with someone who has a proven track record of success with companies similar to yours. These individuals will possess relevant knowledge, and they will also likely have key connections with individuals and organizations that can help your company better achieve its CSR goals.

Purpose and profits have never been more intertwined, and investors have taken notice. As an entrepreneur, do more than just incorporate a CSR program into your business plan. Embody it to your core and make it a central part of your pitch to investors.

Amazing things happen when startups and investors align around a shared passion for social responsibility. Businesses grow stronger, and the world changes for the better.

Entrepreneur’s Organization is a global network of over 13,000 business owners. Learn how EO New Jersey helps over 100 business owners grow.

Kevin Xu is the CEO of MEBO International, a California- and Beijing-based intellectual property management company specializing in applied health systems. He also leads Skingenix, which specializes in skin organ regeneration and the research and development of botanical drug products. Kevin is co-founder of the Human Heritage Project.

This post was originally published on the EO Global Octane Blog.


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