What is corporate social responsibility?

Corporate and community social responsibility give back CSR icon concept on green nature background.
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May 31, 2024

Corporate social responsibility, or CSR, is a term used by organisations to describe their initiatives – and their commitment – to have a positive impact on society. This impact may be focused on the immediate community in which an organisation operates, or even reach our wider global society, because CSR activities can support everything from environmental sustainability and stewardship to social equity programmes and economic growth outside of the organisation itself.

Corporate social responsibility is a popular modern business practice because it means companies can demonstrate accountability while also generating a profit, and many organisations now include CSR within their business strategy documents to signal both their commitment to ethical practices as well as their good financial sense.

And it’s fair to say that corporate social responsibility has represented a paradigm shift in how businesses operate, marking a transition towards more responsible and sustainable practices – and a more sustainable and equitable world.

The different types of corporate social responsibility

Corporate social responsibility covers a variety of initiatives that are aimed at addressing social, environmental, and ethical problems, but most typically fall into one of four categories. Many businesses will adopt different aspects of each category, allowing them to address a diverse range of social issues, from climate change to human rights.

Philanthropic responsibility

Businesses that undertake philanthropic CSR activities will often make charitable donations, provide volunteering time through staff volunteering days, and aid local community development projects that support social causes or other nonprofit organisations.

Environmental responsibility

Businesses with an environmental CSR focus will aim to reduce the environmental impact of their business operations. This might include minimising their carbon emissions or carbon footprint, conserving natural resources, promoting renewable energy, or prioritising efforts to integrate sustainability into all aspects of their business operations, from the manufacturing process to supply chain management.

Ethical responsibility

Ethical CSR practices include adopting – and adhering to – moral principles and ethical standards into responsible business practices. This includes the fair treatment of employees, suppliers, and other stakeholders, as well as transparency and integrity in decision-making processes.

Economic responsibility

Economic CSR activities are typically financial processes and decisions where business profit and social benefit are equally important, and profit is always generated in a socially responsible manner.

Why corporate social responsibility is so important

Businesses are woven into the fabric of our communities. They employ people, they provide the goods and services people use, and they pay taxes that help keep our society running. But it’s a two-way street, because businesses also benefit from the skills and talents of people within our communities, from government subsidies and incentives and, of course, from the profits of consumers. And like everyone else, they are accountable for their impact on people and the planet.

It’s an idea known as corporate citizenship, and it’s one of the reasons why corporate social responsibility is so valuable: CSR offers a framework for businesses to take accountability and address pressing social challenges – such as climate change and inequalities – in a sustainable, sensible way. It’s a win/win scenario – companies can enhance their brand image, develop a competitive advantage, comply with regulatory standards, improve their environmental performance, improve their employee retention figures, and help build a better world, all at the same time.

What is the triple bottom line?

The triple bottom line is a way to measure business performance beyond profit, considering social and environmental performance alongside financial performance. 

This approach underscores the interconnectedness of environmental sustainability, social responsibility, and economic health, and urges businesses to consider the full scope of their impact on the world. 

It’s similar to:

  • the ESG (environmental, social and governance) standards that organisations use to help measure their impact on society, the environment, and how transparent and accountable they are
  • the ISO 26000, which provides guidance to organisations that want to operate in a socially responsible way
  • the United Nations’ Ten Principles, which are guiding principles to help businesses operate in ways that meet fundamental responsibilities in human rights, labour, the environment, and anti-corruption.

How organisations implement and embed corporate social responsibility 

Embedding corporate social responsibility into an organisation’s culture and operations requires a strategic approach that’s aligned with the company’s values, mission, and wider business model. It’s also important to remember that successful CSR implementation hinges on support from multiple business areas, from corporate governance to employee engagement.

Step 1: Engage stakeholders

Collaboration between all stakeholders – such as senior leadership, employees, customers, suppliers, and communities – is essential at every stage of the implementation process, from identifying CSR priorities to gaining support for CSR efforts.

Step 2: Develop a CSR strategy

Next, companies need to outline and articulate their CSR goals, identify any relevant issues and stakeholders, and then establish measurable targets and performance indicators to track their progress.

Step 3: Integrate CSR into business practices

The focus on corporate social responsibility should be integrated into all aspects of business operations, from procurement to marketing. Everyone needs to be on the same page, with  consistency and alignment across the organisation.

Step 4: Implement CSR programmes and initiatives 

There is no limit to the activities businesses can undertake in delivering their CSR programmes, but some common examples include:

  • Committing to corporate sustainability and conducting sustainability reporting.
  • Implementing employee volunteer programmes.
  • Supporting environmental conservation projects.
  • Building partnerships with nonprofits and social enterprises.
  • Investing in renewable energy or sustainable development.
  • Improving working conditions and ensuring fair labour practices.
  • Implementing energy efficiency measures.
  • Supporting social impact programmes, such as those that support education and skill development, promote diversity and inclusion, or address community needs.
  • Prioritising ethical material sourcing. For example, Starbucks is well-known for its commitment to fair trade coffee sources.
  • Promoting responsible marketing and advertising.

How people and communities benefit from corporate social responsibility

Corporate social responsibility initiatives can have a profound and positive impact on people and communities all over the world. 

For example, the benefits of corporate social responsibility can include:

  • Improved quality of life. CSR initiatives that focus on areas such as education, healthcare, and community development can help enhance people’s well-being and improve the standard of living within communities.
  • Economic development. CSR initiatives that focus on entrepreneur skills, job creation, and training support sustainable livelihoods for people, and boost the local economy as well.
  • Environmental protection and growth. CSR initiatives aimed at conserving natural resources, reducing pollution, and protecting ecosystems support current and future generations, safeguarding the environment for us all.
  • Social inclusion and equity. CSR initiatives that promote diversity, equity, and inclusion – in the workplace and in society more generally – help foster a more equitable and fair society, one where everyone has equal opportunities to thrive.

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