Giving back: why corporate social responsibility matters

Children playing on swings at sunset next to a wind farm
Posted by

Mar 3, 2023

Not only can it give your business the feel-good factor and improve its brand image and public relations, but it can build trust, give a competitive edge and help to make cost savings. We take a closer look at the business concept of corporate social responsibility.

Reducing waste, improving working conditions, investing responsibly and contributing to programmes that give back to the local community. These are all examples of corporate social responsibility (CSR) – a management concept in which companies weave social and environmental concerns into their business models, operations and interactions with stakeholders.

What is corporate social responsibility?

A 2019 study by Deloitte revealed that 93 percent of business leaders believe that companies aren’t just employers, but stewards of society. What is more, 95 percent reported that they were planning to beef up their approach to tackling large-scale issues in the coming years and devote greater resources to socially responsible initiatives.

As the United Nations Industrial Development Organization (IN IDO) defines it, “CSR is generally understood as being the way through which a company achieves a balance of economic, environmental and social imperatives (‘Triple–Bottom–Line–Approach’), while at the same time addressing the expectations of shareholders and stakeholders.”

Put simply, CSR is a commitment to carry out responsible business in an ethical way. This means a company practising good corporate citizenship by making business decisions that take into account its social, economic and environmental impact, and also consider human rights. In practice, CSR initiatives might include anything from improving environmental sustainability such as waste reduction; responsible sourcing, for example using only fair trade ingredients; employee volunteering; or the development of employee and community relations.

What are the four corporate social responsibilities?


A company’s carbon footprint can be significant when considering greenhouse gas emissions contributing to climate change, pollution, waste and depletion of natural resources. Practicing good environmental management, such as using renewable energy sources or sustainable materials, or volunteering for local environment-focused organisations to improve environmental performance is an important part of a business’s CSR efforts. Committing to environmental responsibility also allows a business to take ownership of its environmental impact.


From setting a higher minimum wage to offering well-being initiatives and ensuring that all employees are treated with respect, being ethically responsible means ensuring a business engages in fair business practices across the board. Ethical CSR programs should also include not just employees but stakeholders and customers too.


Businesses do not exist in a vacuum – they are part of the community, and increasingly it’s expected that local businesses will give something back to the place they call home. Philanthropic CSR activity can take many forms, from donating to causes that align with the company mission to sponsoring a local nonprofit fundraiser or donating a portion of annual earnings to a local cause.


Economic corporate social responsibility means undertaking financial decision-making that is motivated not just by making more money but also by making a positive impact to society and this underpins all of the other types of CSR strategy. This might mean paying more for a supplier that uses environmentally sustainable materials rather than using the supplier with the lowest quote, for example.

Two major corporations which have embraced CSR

Starbucks and ethical sourcing: Once having a less than socially responsible reputation for forcing out smaller independent cafes from the high street, Starbucks launched its first corporate social report in 2002 in which it said it aimed to become as known for its CSR initiatives as for its coffee, and has turned its image around.

By 2015, the multinational coffee giant said that 99 percent of its coffee supply chain is ethically sourced, and it seeks to make that 100 percent through continued efforts and collaborations with local coffee farmers and organisations.

The approach that Starbucks has adopted is one of the coffee industry’s first set of ethical sourcing standards, created in partnership with Conservation International: the Coffee and Farmer Equity (CAFE) Practices. CAFE assesses coffee farms against specific economic, social, and environmental standards, ensuring that Starbucks can source its product while maintaining a positive social impact.

Thanks to these efforts, in 2021 Ethisphere voted Starbucks one of the world’s most ethical companies.

Sustainable Lego: Lego is the sole toy company to be named a World Wildlife Fund Climate Savers Partner, thanks to its commitment to reducing its carbon footprint. But besides this, it has made many other commitments to being more sustainable, including:

  • Using environmentally friendly materials to produce all of its core products and packaging by 2030
  • Shrinking its box sizes, saving around 7,000 tons of cardboard
  • Making some of its toys from sustainably sourced sugarcane rather than petroleum-based plastics
  • Committing to remove all single-use plastics from its packaging by 2025
  • Investing $164million in its own sustainable materials research centre, where experiments are carried out to discover which bio-based materials can be put into the production process.

What is the difference between corporate social responsibility and corporate sustainability?

Corporate sustainability is another term which has recently gained traction in the business world. But what is it, and how does it differ from CSR?

Corporate sustainability is part of CSR and is defined as a business strategy for long-term growth that works in harmony with people and the planet. Both CSR and corporate sustainability focus on helping companies to be run in an ethically profitable way without negatively affecting others, and both help companies to positively impact those around them. But there are key differences between them.

In terms of vision, CSR is often retrospective and reflects on what a company has done to contribute to society, while corporate sustainability incorporates a sustainable development strategy for the future.

The targets of CSR initiatives are often opinion formers such as media and politicians, whereas corporate sustainability looks at the whole value chain – everyone from end-consumers to stakeholders.

Motivation and driving force behind the two are also different. While CSR initiatives aim to protect a company’s reputation, corporate sustainability is more to do with creating new opportunities for emerging markets.

What are the benefits of CSR?

Both the company and society can reap benefits from CSR, making it a win-win for everyone. Some of the key positives are:

Attracts money – investors, benefactors and entrepreneurs are more likely to invest in a company or body that has supported its community and environmental development and which works on good causes.

Improves brand – if your company is known to have a positive impact on society, customers are more likely to buy your products or services and you earn public trust as a reputable brand.

Increases welfare – a socially responsible company protects human rights around working hours and pay, provides a safe working environment and takes legal actions against violations of employer rights.

Grows profits – socially responsible behaviour can garner press coverage and attract more customers, particularly those who want to spend more ethically.

Helps tackle the climate crisis – using renewable energy, creating climate change awareness and reducing carbon emissions through a decarbonisation strategy and water conservation policy are all examples of how a company can become more sustainable.

Retains staff – the sense of pride and fulfilment that comes from being part of a workforce that does good in society gives current staff the feel-good factor, improving employee engagement and retention, and making a company more attractive to job seekers.

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