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Branding

What Is Corporate Social Responsibility 

Businesses that practice corporate social responsibility aim to improve their communities, the economy or the environment.

  • Corporate social responsibility, or CSR, is a form of self-regulation that reflects a business’s accountability and commitment to contributing to the well-being of communities and society through various environmental and social measures. 
  • CSR plays a crucial role in a company’s brand perception; attractiveness to customers, employees, and investors; talent retention; and overall business success. 
  • A company can implement four types of CSR efforts: environmental initiatives, charity work, ethical labor practices and volunteer projects. 
  • This article is for business owners who are looking to implement or improve CSR initiatives and want to learn more about the benefits, best practices, and potential pitfalls.

The definition of business success goes beyond profitability, growth rate and brand recognition. In today’s world, customers, employees and other stakeholders judge a company by how its activity impacts the community, economy, environment and society at large. In other words, by whether it cares about the greater good and not only greater profit. Corporate social responsibility practices are a way to demonstrate your business’s stance on the matter. 

What is corporate social responsibility?

Corporate social responsibility is a type of business self-regulation with the aim of social accountability and making a positive impact on society. Some ways that a company can embrace CSR include being environmentally friendly and eco-conscious; promoting equality, diversity, and inclusion in the workplace; treating employees with respect; giving back to the community; and ensuring business decisions are ethical. 

CSR evolved from the voluntary choices of individual companies to mandatory regulations at regional, national and international levels. However, many companies choose to go beyond the legal requirements and embed the idea of “doing good” into their business models. 

There is no one way a company can embrace CSR, but one thing is certain – to be perceived as genuine, the company’s practices need to be integrated into its culture and business operations. In today’s socially conscious environment, employees and customers place a premium on working for and spending their money on businesses that prioritize CSR. They can detect corporate hypocrisy. 

To ensure CSR authenticity, a company should look at its values, business mission and core issues and determine which initiatives best align with the business’s goals and culture. The business can do this internally or hire a third party to conduct an assessment. 

Reviewing the United Nations 17 Sustainable Development Goals is a good place to start. While goals like Good Health and Well-Being or Gender Equality can apply to most businesses, specific goals like Life Below Water or Affordable and Clean Energy may be relevant to select industries like water technology or energy providers.

Why CSR is important

There are many reasons for a company to embrace CSR practices. 

1. It improves customers’ perception of your brand.

It’s increasingly important for companies to have a socially conscious image. Consumers, employees, and stakeholders prioritize CSR when choosing a brand or company, and they hold corporations accountable for effecting social change with their beliefs, practices, and profits. 

“What the public thinks of your company is critical to its success,” said Katie Schmidt, founder and lead designer of Passion Lilie. “By building a positive image that you believe in, you can make a name for your company as being socially conscious.”

To stand out among the competition, your company needs to prove to the public that it is a force for good. Advocating and raising awareness for socially important causes is an excellent way for your business to stay top-of-mind and increase brand value. 

The Kantar Purpose 2020 study demonstrated a direct correlation between perceived positive impact and brand value growth. Companies that the public considers highly impactful demonstrated a brand value growth of 175% over 12 years, while businesses with a low positive impact showed only 70% growth.

Schmidt also said that sustainable development could help a business financially. For example, using less packaging and less energy can reduce production costs.

2. It attracts and retains employees.

Consumers aren’t the only ones drawn to businesses that give back. Susan Cooney, head of global diversity and inclusion at Symantec, said that sustainability strategy is a big factor in where today’s top talent chooses to work. 

“The next generation of employees is seeking out employers that are focused on the triple bottom line: people, planet and revenue,” she said. “Coming out of the recession, corporate revenue has been getting stronger. Companies are encouraged to put that increased profit into programs that give back.” 

According to Deloitte’s 2021 Millennial and Gen Z Survey, the modern workforce prioritizes culture, diversity, and high impact over financial benefits. An estimated 44% of millennials and 49% of Gen Zers rely on their personal ethics in determining the type of work and companies they’d join. The respondents of the Porter Novelli Purpose Tracker 2021 report go even further, with 70% saying they wouldn’t work for a company without a strong purpose. 

What’s more, employees that share the company’s values and can relate to its CSR initiatives are much more likely to stay. Deloitte’s 2020 Global Marketing Trends Report shows that purpose-driven companies retain talent up to 40% more than their competitors. Considering that the estimated cost of losing an employee averages 40% of their annual salary, according to a report by the Washington Center for Equitable Growth, offering your team a sense of purpose and meaning in their work is worth the effort.

3. It increases your appeal to investors.

By demonstrating a developed CSR program and initiatives, your company is bound to become more appealing to both current and future investors. CECP’s influential 2021 Giving in Numbers report shows that investors play a growing role as key stakeholders in corporate social responsibility. Almost 80% of surveyed businesses were open to providing them with data and considering their perspectives on sustainability. Just like customers, investors are holding businesses accountable when it comes to social responsibility. 

At the same time, a company that takes CSR seriously signals to both investors and partners that it’s interested in long-term as well as short-term gain. CSR goes hand in hand with environmental, social, and governance (ESG) metrics that help external analysts quantify the company’s social efforts, and becomes a key factor for investors’ consideration and continued interest.

4 types of corporate responsibility your business can practice

In recognition of how important socially responsible efforts are to their customers, employees and stakeholders, many companies focus on four broad CSR categories. 

  1. Environmental efforts: One primary focus of CSR is the environment. Businesses have large carbon footprints, regardless of size. Any steps a company can take to reduce its footprint is considered good for both the company and society.
  2. Philanthropy: Businesses can practice social responsibility by donating money, products or services to social causes and nonprofits. Larger companies tend to have plentiful resources that can benefit charities and local community programs; however, even as a small business, your efforts can make a difference. If you have a specific charity or program in mind, reach out to the organization. Ask them about their specific needs and whether a donation of money, time or your company’s products would best help them.
  3. Ethical labor practices: Companies can demonstrate CSR by treating employees fairly and ethically. This is especially true of businesses that operate in international locations with labor laws that differ from those in the U. S.
  4. Volunteering: Participating in local causes or volunteering your time (and your staff’s time) to community events says a lot about your company’s sincerity. When your company does good deeds without expecting anything in return, you express concern (and support) for specific issues and social causes.

Building a socially responsible business

While startups and small companies don’t have the deep financial pockets that enterprises have, their efforts can have a significant impact, especially in their local communities. 

“Even 5%, though it might not sound like a lot, can add up to make a difference,” Schmidt said. “When thinking of ways to donate and give back, start local, and then move from there.” 

When identifying and launching a CSR initiative, involve your employees in the decision-making process. Create an internal team to spearhead the efforts and identify organizations or causes related to your business or that employees feel strongly about. You’ll increase engagement and success when you contribute to something that matters to your employees. Involving your employees in the decision-making process can also bring clarity and assurance to your team. 

“If decisions [about CSR] are made behind closed doors, people will wonder if there are strings attached and if the donations are really going where they say,” Cooney said. “Engage your employees [and consumers] in giving back. Let them feel like they have a voice.” 

Whichever strategies you use for sustainable development, be vocal. Let your consumers know what you are doing to be socially conscious. [Related read: PayPal’s Mission for Corporate Social Responsibility]

“Consumers deserve to share in the good feelings associated with doing the right thing, and many surveys have found that consumers are inclined to purchase a sustainable product over a conventional alternative,” Cooney said. “Announcing these benefits is a win-win from both a commercial and sustainability perspective.”

What Is Corporate Social Responsibility? [Biznewsdaily]

About Our GE Network Expert - Min Tang

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Finance & Capital

Stagflation

Stagflation is like an imperfect storm, a weather happening with lots of contributing factors. Stagflation is an economic condition caused by a combination of increasing inflation and high unemployment rates, which cause a decrease in consumer demand for goods and services.

In a good economy, there’s a balance, where slow steady economic growth is in step with consumer demand. With Stagflation, the economy is out of balance in a bad way.



What Does Stagflation Mean?

Stagflation occurs when high inflation happens at the same time as high unemployment. Despite recent growth in the unemployment rates, the country is still about 2 million jobs shy of employment numbers in pre-pandemic days.

The pandemic also caused problems that are contributing factors to Stagflation, such as supply chain issues. Lack of product contributes to inflation because rising prices are the result as consumers vie to purchase from an insufficient supply.

To understand Stagflation, economists look at the whole picture.

Is Stagflation a Recession?

What is stagflation, compared to recession? Sadly, and alarmingly, there are levels of Stagnation. At its worst, it’s an economic cycle that can lead to recession. Economic policy actions are taken to combat stagflation, such as raising the interest rates, as the federal reserve did in May and again in mid-June 2022.

Yet when the federal reserve raises interest rates in an effort to combat inflation, that can worsen unemployment rates – as employers fight to run their businesses while facing higher costs. When inflation jumps and the federal reserve approves interest rate hikes, a period of stagflation occurs. Stagflation at its worst is a Recession.

Stagnation Vs. Inflation

High inflation and unemployment rates affect each other. Higher inflation means consumer purchasing power lessens. They have less money to spend. When the money supply is tight for consumers – in other words, when their dollars don’t go as far – they pull back on spending.

That puts a crunch on businesses. During periods of inflation, leading to stagflation, no real economic growth can happen. Economic research has proven that businesses put growth plans on hold during such times. The businesses are also facing price pressures, as their costs for supplies, utilities and borrowing capital increase.

Stagflation Vs. Economic Stagnation

Economic stagnation is a period of no economic growth. It is a stage of stagflation, marked by higher prices for goods, including raw materials that businesses need, and services. Many economists would agree that as economic stagnation periods lengthen, the possibility of recession looms larger.

What Causes Stagflation?

Most economists define stagflation as being caused by these five factors:

Negative GDP Growth

GDP is the Gross Domestic Product, which is a measure of the country’s domestic output. Supply-side economists factor in the rate of inflation when calculating the true GDP. For the past 2 years, the GDP has been in decline due to slow economic growth. Higher growth in the GDP indicates a healthy economy.

High Unemployment

Unemployment rates have been decreasing since pandemic restrictions eased, but the economy hasn’t returned to pre-pandemic employment numbers. At the same time, small businesses were largely unable to compete for workers compared to the higher wages that medium and large businesses could offer. The unemployment rate is low, but the US is still 2 million jobs less than pre-pandemic levels.

Supply Chain

The pandemic caused supply shocks all through the chain, from production to delivery. As the economy faced a lack of supplies, the higher demand for items threw price controls out the window. Supply chain issues contributed to the rise of inflation.

Interest Rates

The federal reserve raised interest rates in hopes of keeping inflation from reaching the double digits and settle the economy. Inflation is a contributing factor to stagnation, as consumers and businesses have less money to spend. Discretionary spending decreases as money is set aside for necessities, such as financial obligations and utilities. When the Fed raises interest rates, central banks soon respond by also raising rates.

Inflation

High prices are part of inflation. Inflation affects businesses, who pay more for supplies and utilities. Their customers are facing the same challenges and reduces spending.

Stagflation and Economic Growth in the US

It’s not as if Stagflation is something new. It can be part of the economic cycle in every government. The US had a period of stagflation in the 1970s. Then-President Richard Nixon initiated a monetary policy that put a 90-day freeze on wages and prices, and levied a 10% tax on imports. Stagflation still hit its lowest point with a national recession.

What is Stagflation? [Smallbiztrends]

About Our GE Network Expert - Min Tang

Categories
Finance & Capital

Inflation Affecting Business

In order for a business to succeed, it’s important for its owners to understand the factors that can impact their bottom line. One of these key factors is inflation. The Federal Reserve targets an annual inflation rate of 2%. However, the rate is currently at 8.6%. Inflation is a result of the broader economic trends at play in the market. In this article, we’ll explore how inflation affects businesses and what owners can do to mitigate its impact. Let’s dive in!



How Does Inflation Affect a Business?

Inflation affects businesses in many ways. Especially when it comes to cash flow and purchasing power. This puts pressure on small businesses and can lead to a decline in profitability. Inflation is, therefore, a major concern for business owners and needs to be carefully managed.

While inflation can have negative effects on businesses, it’s important to note that not all businesses are equally affected. Those that are able to pass on higher costs to consumers through raising prices are less likely to be adversely affected by inflation than those that cannot.

10 Ways Inflation Affects Businesses

Inflation affects businesses in a number of ways both positively and negatively. Let’s take a look at 10 of the most common ways below:

1. Supply Chain Disruptions

Inflation can lead to supply chain issues as gas prices continually rise and business owners strive to source materials at the lowest possible cost. These supply chain shortages can lead to delays in production and ultimately, a decline in revenue.

2. Consumer Price Index Increases

If consumers are paying higher prices for goods and services, the Consumer Price Index (CPI) will also increase. This, in turn, can lead to rising costs, and a decrease in buying power for consumers and businesses alike.

3. Shortage of Raw Materials

As businesses seek to source materials at the lowest possible cost, they may inadvertently create shortages of raw materials. This can possibly lead to production delays and a decline in revenue.

4. Increasing Interest Rates

Inflationary pressure often leads to the Federal Reserve increasing interest rates. The Federal Reserve raising interest rates leads to higher borrowing costs for businesses and a decrease in profitability.

5. Decreased Consumer Spending

As the purchasing power of consumers decreases, they are likely to cut back on spending. This can lead to a decline in revenue for businesses that are reliant on consumer spending.

6. Increased Overhead and Inventory Costs

The increased cost of materials can lead to higher overhead and inventory costs for businesses. This can eat into profits and reduce the company’s bottom line.

7. Harder to Invest

When inflation is high, it can be harder for businesses to invest. This is because the return on investment (ROI) is often lower than the rate of inflation. This can lead to a decline in profitability and growth.

8. Higher Employee Wages

Inflation can lead to increased wages for employees as they seek to maintain their buying power as prices rise. This puts pressure on businesses and leads to a decline in profitability.

9. Old Debt Becomes Cheaper

As inflation goes higher, the value of debt decreases. This can be beneficial for businesses as it makes it easier to repay old debts. While old debt becomes cheaper, new debt becomes more expensive, leading to higher borrowing costs for businesses and a decrease in profitability.

10. Increased Competition

Inflation can lead to increased competition as businesses strive to maintain market share. This can put pressure on margins and lead to a decline in profitability, but it can also lead to innovation and growth.

How Small Business Owners Can Prepare for Rising Inflation

While inflation can have a number of benefits, such as stimulating economic growth, it can also lead to price increases for goods and services. As a result, it’s important to have a pricing strategy in place that can help you absorb some of the impacts as inflation rises.

One option is to raise your prices in line with the rate of inflation. This will help you maintain your profit margins and prevent your business from being priced out of the market. Another option is to offer discounts or promotions that help offset the increased cost of goods and services. Whatever strategy you choose, it’s important to be proactive about inflation and take steps to protect your profits.

How Inflation Impacts Businesses [Smallbiztrends]

About Our GE Network Expert - Min Tang

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Business Ideas

NFT Music

The proliferation of the world of Non-Fungible Tokens (NFTs) has grown beyond art, GIFs, video game items, virtual real estate, and collectibles to now include NFT music. Now musicians joining the fray are standing to make millions of dollars by selling digital versions of their art and music. When it comes to Non-Fungible Token music it falls under the domain of a rare collectible that is stored on a digital ledger. NFT music possesses lucrative opportunities for creatives to generate revenues as they help cut out middlemen such as record label companies through their sales as well as generate royalties for independent artists.  NFT music offer artists and creatives an endless inventory of digital assets to sell and auction off to their fans.



What Exactly is NFT Music?

Music NFTs are the new frontier that has opened up for musicians and independent artists to make some serious dough. Simply put NFT music features a digital asset that incorporates a piece of music. It could include a tokenized version of a single song, an album, digital merchandise, an opportunity to meet artists, special tickets, or even a music video. The portfolio of NFT music will only depend on how the artist wants to structure and package the NFTs.

When compared to traditional digital music distribution NFTs offers unlimited opportunities. While music streaming platforms offer only licenses to listen to the paid tracks offering no ownership. Music NFTs unlike music streaming platforms offer buyers collective or sole ownership over that particular limited NFT file. NFT music by nature is unique and irreplaceable and is fast becoming highly sought-after collectibles. They empower musicians to create music NFTs themselves to auction off or sell directly to fans who pay using cryptocurrencies like Bitcoin, Ethereum, and others. This puts a lot of power back in the hands of artists who now have another way to monetize their art or other forms of digital merchandising without going through third parties or middlemen.

The NFT Music Industry in 2022

Ever since COVID-19 restrictions led to cancelations of live sports, concerts, and entertainment, non-fungible tokens (NFTs) have emerged as a means for fans to connect with their favorite artists and bands. NFT trading volume surged over $44.2 billion in 2021 and is continually breaking records and the NFT market cap is expected to reach $80 billion by 2025, with music NFTs standing to generate more revenues.

Music NFTs besides helping the music industry by bringing artists and fans closer are also helping bring artists additional revenues without the need for intermediaries. Artists too have taken notice Kings of Leon became the first band to release an album as NFT others including the likes of Snoop Dogg and Linkin Park’s Mike Shinoda have also gotten on board the NFT train.

Why You Should Create Your Own NFT Music

If you are musically inclined, creating you own NFT music can offer some benefits:

Create experiences for your fans: NFT music is a limited edition of your music and memorabilia. They have a high potential for fans to own these rare collectibles. In addition, you can use them to promote your upcoming album releases, offer unique experiences for fans, and even offer limited exclusive content.

The digital economy is the future: If you also want to be a part of this highly profitable and engaging marketplace, then today is the right time to take a step forward and invest in some digital merchandising.

Opportunity for generating more revenues: NFTs are the craze in the digital economy offering money-making opportunities when they get traded. Some NFTs have shown that their values can appreciate significantly over time.

Cut out the middlemen: NFTs offer you the unique opportunity to engage directly with buyers helping independent artists potentially earn 100% of the proceeds without the need to go through third parties such as streaming platforms.

Also, make sure to check out our article on how to create an NFT.

How to Turn Music into an NFT

Turning music into an NFT entails a process called minting. You can mint your NFT music through the following steps:

 1. Select a digital asset: You will need to have an original piece of music art it may be an audio clip, video clip, 3D animation, GIFs, cover art or any other digital asset.

2. Get a Cryptocurrency Wallet:  For you to start minting NFTs, you will need a place to mint and store them. They also are vital tools for buying, trading, and selling cryptocurrencies that are the mediums of exchanges for NFTs. Crypto wallets come in either as hardware or software.

3. Buy some cryptocurrency: You will need to buy some cryptocurrency to help you mint your NFT or convert your digital file into NFT music. Most NFT need gas which is a measure of the computational “fuel” needed for converting digital assets into NFTs.

4. Upload your NFT file to an NFT platform: Once you have converted your digital assets into NFTs you will be presented with the option to list them up for sale on the several available NFT marketplaces. You can use marketplaces like Ethereum blockchain, OpenSea, Rarible, or Axie Marketplace.

How do Music NFTs Make Money?

Music NFT creators can make money through the following:

Single Collectible: musicians can choose to create a single collectible that mints unique one-of-a-kind NFT.

Multiple Collectible: Musicians can release multiple copies of the same collectible.

Royalties: Creators can collect royalties from NFT when they are traded in a secondary market.

For more insights check out our previous article on how to make money with NFT.

What is NFT Music? [Smallbiztrends]

About Our GE Network Expert - Min Tang

Categories
Business Ideas

What are Hong Kong stocks, and how to buy them 

As an investor, you may be interested in expanding your portfolio beyond domestic stocks and foreign markets. ZH is a perfect place to start, as it has a well-developed stock market with many investment opportunities. We will discuss what Hong Kong stocks are and how to buy them, and we will also provide some tips on investing in Hong Kong’s stock market.

What are Hong Kong stocks, and what do they represent?

Hong Kong stocks, also known as H-shares, are shares of Chinese companies listed on the Hong Kong Stock Exchange. These stocks offer foreign investors exposure to the Chinese economy, increasing in recent years. Many of the largest and most well-known Chinese companies are listed on the Hong Kong Stock Exchange, including China Mobile, Industrial and Commercial Bank of China, and China Construction Bank.

How to buy stocks in Hong Kong

If you’re interested in buying Hong Kong stocks, there are a few things you need to know. You’ll need to open a brokerage account with a firm offering the Hong Kong Stock Exchange access. Next, you’ll need to deposit money into your account, and this can usually be done by wire transfer or by check.

Once you have money in your account, you can start buying stocks. You can do this online or over the phone. When you place an order, you need to specify the stock symbol, the number of shares you want to buy, and the price you’re willing to buy the shares.

It’s important to remember that when you buy stocks in Hong Kong, you’re subject to different rules and regulations than when you buy stocks abroad, for example in the United States.

What to look for when buying stocks in Hong Kong

When considering which stocks to buy in Hong Kong, it’s essential to do your research. You should look at a company’s financial statements and read analyst reports to understand the company and its prospects better. It’s also good to diversify your portfolio by investing in different sectors and industries, and this will help mitigate risk and provide you with exposure to various economic conditions.

Tips for investing in Hong Kong’s stock market

Pay attention to global economic trends- The global economy can significantly impact the performance of Hong Kong’s stock market. Keep an eye on developments worldwide and be prepared to adjust your portfolio accordingly.

Diversify your portfolio- As we mentioned earlier, it’s good to diversify your portfolio by investing in different sectors and industries. It will help you mitigate risk and profit from various economic conditions.

Monitor your stocks closely- The Hong Kong Stock Exchange is known for volatile trading, which means that stock costs can move up or down quickly. It’s essential to monitor your stocks closely to take advantage of market fluctuations.

The benefits of investing in Hong Kong stocks

There are many benefits to investing in Hong Kong stocks. First, you can gain exposure to the Hong Kong and mainland Chinese economy, both of which have been growing rapidly in recent decades. Second, you can invest in some of the most well-known Chinese companies. Finally, by diversifying your portfolio, you can mitigate risk and profit from various economic conditions that may impact Asia to a far lesser degree.

How to research individual companies before investing

If you’re interested in buying stocks in Hong Kong, you need to do your research on the individual stock you’re planning on buying. First, look at a company’s financial statements and read analyst reports to understand the company and its prospects better. Second, pay attention to global economic trends and be prepared to adjust your portfolio accordingly. Finally, keep an eye on your stocks to take advantage of market fluctuations.

The risks associated with stock market investment

All investments come with risk, and the stock market is no different. When you invest in stocks, you’re taking on the risk of loss. There are ways to mitigate this risk. For example, by diversifying your portfolio, you can reduce any investment’s impact on your overall portfolio.

Another way to mitigate risk is to pay attention to global economic trends. By monitoring the world economy, you can be prepared to make adjustments to your portfolio as needed.

Finally, remember that the stock market is volatile, which means that stock prices can go up or down quickly. It’s essential to monitor your stocks closely and be prepared to buy or sell as market conditions change.

Read more about Hong Kong stocks here, such as the different types available.