Corporate Social Responsibility (CSR)
Corporate social responsibility (CSR) is a self-regulating business model that helps a company be socially accountable to itself, its stakeholders, and the public. By practicing corporate social responsibility, also called corporate citizenship, companies can be conscious of the kind of impact they are having on all aspects of society, including economic, social, and environmental.
Corporate social responsibility (CSR) is a type of business self-regulation with the aim of being socially accountable. There is no one “right” way companies can practice CSR; many corporate CSR initiatives strive to positively contribute to the public, the economy or the environment. In today’s socially conscious environment, employees and customers place a premium on working for and spending their money with businesses that prioritize CSR.
To engage in CSR means that, in the ordinary course of business, a company is operating in ways that enhance society and the environment, instead of contributing negatively to them.
Understanding Corporate Social Responsibility (CSR).
Corporate social responsibility is a broad concept that can take many forms depending on the company and industry. Through CSR programs, philanthropy, and volunteer efforts, businesses can benefit society while boosting their brands.
As important as CSR is for the community, it is equally valuable for a company. CSR activities can help forge a stronger bond between employees and corporations, boost morale and help both employees and employers feel more connected with the world around them.
- Corporate social responsibility is important to both consumers and companies.
- Starbucks is a leader in creating corporate social responsibility programs in many aspects of its business.
- Corporate responsibility programs are a great way to raise morale in the workplace.
For a company to be socially responsible, it first needs to be accountable to itself and its shareholders. Often, companies that adopt CSR programs have grown their business to the point where they can give back to society. Thus, CSR is primarily a strategy of large corporations. Also, the more visible and successful a corporation is, the more responsibility it has to set standards of ethical behavior for its peers, competition, and industry.
In 2010, the International Organization for Standardization (ISO) released a set of voluntary standards meant to help companies implement corporate social responsibility. Unlike other ISO standards, ISO 26000 provides guidance rather than requirements because the nature of CSR is more qualitative than quantitative, and its standards cannot be certified.
Instead, ISO 26000 clarifies what social responsibility is and helps organizations translate CSR principles into practical actions. The standard is aimed at all types of organizations, regardless of their activity, size, or location. And, because many key stakeholders from around the world contributed to developing ISO 26000, this
As the use of corporate responsibility expands, it is becoming increasingly important to have a socially conscious image. Consumers, employees and stakeholders prioritize CSR when choosing a brand or company, and they are holding corporations accountable for effecting social change with their business beliefs, practices and profits.
“A robust CSR program is an opportunity for companies to demonstrate their good corporate citizenship … and protect the company from outsized risk by looking at the whole social and environmental sphere that surrounds the company,” said Jen Boynton.
To illustrate how critical social responsibility has become, previous research by Cone Communications found that more than 60% of Americans hope businesses will drive social and environmental change in the absence of government regulation. Nearly 90% of the consumers surveyed said they would purchase a product because a company supported an issue they care about. More importantly, nearly 75% said they would refuse to buy from a company if they learned the company supported an issue contrary to their own beliefs.
Consumers aren’t the only ones drawn to businesses that give back. Susan Cooney, head of global diversity, equity and inclusion at Symantec, said that a company’s 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,” said Cooney. “Coming out of the recession, corporate revenue has been getting stronger. Companies are encouraged to put that increased profit into programs that give back.”
Schmidt also stated that sustainable development can help a business financially. For example, using less packaging and less energy can reduce production costs.
Types of corporate responsibility your business can practice
Recognizing how important socially responsible efforts are to their customers, employees and stakeholders, many companies focus on a few broad CSR categories, including:
- Environmental efforts: One primary focus of CSR is the environment. Businesses, regardless of size, have large carbon footprints. Any steps a company can take to reduce its footprint is considered good for both the company and society.
- 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, as a small business, your efforts can make a big difference. If there is a specific charity or program you have in mind, reach out to the organization and ask them about their specific needs and whether a donation of money, time or perhaps your company’s products would best help them.
- Ethical labor practices: By treating employees fairly and ethically, companies can demonstrate CSR. This is especially true of businesses that operate in international locations with labor laws that differ from those in the United States.
- Volunteering: Participating in local causes or volunteering your time (and your staff’s time) in community events says a lot about a company’s sincerity. By doing good deeds without expecting anything in return, companies can express their 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,” said Schmidt. “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 that may be somewhat related to the business or that employees feel strongly about. Contributing to something your employees are passionate about can increase engagement and success. 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.”
Regardless of which strategies you use for sustainable development, Boynton said it is important to be vocal. Let your consumers know what you are doing to be socially conscious.
“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,” she said. “Announcing these benefits is a win-win from both a commercial and sustainability perspective.”
Reference: CSR and US corporations