Corporate Social Responsibility

What Is Corporate Social Responsibility (CSR)?

Corporate social responsibility (CSR) is a self-regulatory business model that helps a company to be socially accountable to itself, its stakeholders and the public. By practicing corporate social responsibility, also called corporate citizenship, companies can be aware of the impact they have on all aspects of society, including economic, social and environmental.

Engaging in CSR means that, in the normal course of business, a company operates in ways that improve society and the environment, rather than negatively contribute to them.


  • Corporate social responsibility is a business model whereby companies make a concerted effort to act in ways that improve, rather than degrade, society and the environment.
  • CSR helps both to improve various aspects of society and to promote a positive brand image of companies.
  • Corporate responsibility programs are also a great way to boost workplace morale.
  • CSR is often divided into four categories: environmental impacts, ethical responsibility, philanthropic efforts, and financial responsibility.
  • Some examples of companies that strive to be leaders in CSR include Starbucks and Ben & Jerry’s.

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 promoting their brands.

For a company to be socially responsible, it must first be accountable to itself and its shareholders. Companies that adopt CSR programs often have developed their business enough to give back to society. Thus, CSR is usually a strategy implemented by large corporations. After all, the more visible and successful a corporation is, the greater its responsibility to set standards of ethical behavior for its peers, competition, and industry.

Types of Corporate Social Responsibility

In general, there are four main types of corporate social responsibility: A company may choose to engage in any of these separately, and lack of involvement in one area does not necessarily exclude a company from being socially responsible.

Environmental Responsibility

Environmental responsibility is a pillar of corporate social responsibility based on the preservation of mother nature. By supporting optimal operations and related causes, a company can ensure that it leaves natural resources better than before its operation. Companies often pursue environmental protection through:

  • Reduce pollution, waste, consumption of natural resources and emissions through its manufacturing process.
  • Recycling products and materials throughout its processes, including promoting reuse practices with its customers.
  • Offsetting negative impacts by replenishing natural resources or by supporting causes that can help neutralize the company’s impact. For example, a producer who cuts down trees may commit to planting the same amount or more.
  • Conscious distribution of products by choosing methods that have the least impact on emissions and pollution.
  • Creating product lines that enhance these values. For example, a company that offers a gas lawnmower may design an electric lawnmower.

    Ethical Responsibility

Ethical responsibility is a pillar of corporate social responsibility underpinned by fair, ethical practices. Companies often set their own standards, although external forces or customer demands may shape ethical goals. Cases of ethical responsibility include:

  • Fair treatment of all types of customers regardless of age, race, culture or sexual orientation.
  • Positive treatment for all employees, including favorable pay and benefits above the mandatory minimum. This includes fair employment consideration for all individuals regardless of personal differences.
  • Expanding Seller Use to Use Diverse Suppliers of Different Races, Sexes, Veterans, or Economic Statuses.
  • Honest disclosure of operational concerns to investors in a timely and respectful manner. Although not always mandated, a company may choose to manage its relationships with external stakeholders beyond what is required by law.

Philanthropic Responsibility

Philanthropic responsibility is the pillar of corporate social responsibility that questions how a company acts and how it contributes to society. In its simplest form, philanthropic responsibility refers to how a company spends its resources to make the world a better place. This includes:

  • Whether a business donates profits to charities or causes, believe it.
  • If a business only transacts with vendors or vendors that philanthropically align with the business.
  • Whether a company supports the philanthropic efforts of employees through time off or matching contributions.
  • Whether a business sponsors fundraising events or has a presence in the community for related events.

    Financial Responsibility

    Financial responsibility is the pillar of corporate social responsibility that unites the three previous areas. A company makes plans to focus more on the environment, ethics and philanthropy; however, the company must support these plans through financial program investments, donations, or product research. This includes spending on:

  • Research and development of new products that promote sustainability.
  • Recruit different types of talent to ensure a diverse workforce.
    Initiatives that train employees on DEI, social awareness or environmental concerns.
  • Processes that may be more expensive but that yield better CSR results.
  • Ensure transparent and timely financial reporting, including external audits.

Benefits of Corporate Social Responsibility

As important as CSR is to the community, it is equally valuable to 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 to the world around them. In addition to the positive impacts for the planet, here are some additional reasons why companies pursue corporate social responsibility.

Brand Recognition

According to a study published in the Journal of Consumer Psychology, consumers are more likely to act favorably toward a company that has acted to benefit its customers compared to companies that have demonstrated their ability to offer quality products.

Customers are becoming more aware of the impacts businesses can have on their community, with many now basing their purchasing decisions on the CSR aspect of a business. The more a company becomes involved in CSR, the more likely it is to receive favorable brand recognition.

Investor Relations

In a study by the Boston Consulting Group, companies that are considered leaders in environmental, social or governance matters had an 11% valuation premium over their competitors.
For companies looking to gain an edge and outperform the market, the enactment of CSR strategies tends to have a positive impact on how investors feel about an organization and how they view the value of the company.

Employee Engagement

In another study conducted by practitioners from Texas A&M, Temple, and the University of Minnesota, CSR-related values ‚Äč‚Äčthat align companies and employees would be found to serve as non-financial job benefits that strengthen employee retention.
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Works are more likely to stay with a company they believe in. This, in turn, reduces employee turnover, disgruntled workers, and the total cost of a new hire.

Risk Mitigation

Consider adverse activities such as discrimination against groups of employees, disregard for natural resources, or unethical use of company funds. This type of activity is more likely to lead to lawsuits, litigation, or legal proceedings where the business may be negatively affected financially and captured in the news headlines. By adhering to CSR practices, companies can mitigate risk by avoiding problematic situations and engaging in favorable activities.

ISO 26000

In 2010, the International Organization for Standardization (ISO) published ISO 26000, a set of voluntary standards intended 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.
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ISO 26000 clarifies what social responsibility is and helps organizations translate CSR principles into practical action. The standard is aimed at all types of organizations, regardless of their activity.

Examples of Corporate Social Responsibility


Starbucks has long been known for its strong sense of corporate social responsibility and its commitment to sustainability and community well-being. According to the 2020 Global Social Impact Report, these milestones include sourcing 100% ethically sourced coffee, building a global network of farmers and securing 100 million trees by 2025, promoting green buildings in all of its stores, and investing millions of hours. community service. , and the creation of an innovative university program for its employees.

Home Depot

As part of its annual ESG report, Home Depot highlighted its achievements by focusing on its employees, operating sustainably and strengthening its communities. In fiscal year 2020, it invested more than $2 billion in increased wages and benefits to improve the well-being of its employees. It has also reduced energy consumption by 14% compared to last year and plans to reduce company-wide emissions by 40% by 2030.
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General Motors

In 2021, General Motors was ranked No. 1 on Bloomberg’s Total Equality Index for the fourth year in a row and among Diversity Inc.’s 50 Best Companies to Work For for the sixth year in a row. In addition, it has planned to invest $35 billion between 2020 and 2025 in electric vehicles and aims for 100% renewable electricity in US facilities by 2025.

Why Should a Company Implement CSR Strategies?

Many companies view CSR as an integral part of their brand image, believing that customers are more likely to do business with brands they perceive to be more ethical. In this sense, CSR activities can be an important component of corporate public relations. At the same time, some company founders are also motivated to commit to CSR because of their beliefs.

Why Is CSR Important?

The movement towards CSR has had an impact in various fields. For example, many companies have taken steps to improve the environmental sustainability of their operations through measures such as installing renewable energy sources or purchasing carbon offsets. Efforts have also been made in supply chain management to eliminate reliance on unethical labor practices such as child labor and slavery.

Although CSR programs have generally been more common among large corporations, small businesses also participate in CSR through smaller-scale programs such as donations to local charities and sponsorship of local events.

What Are the Benefits of CSR?

CRS initiatives seek to have a positive impact on the world, bringing direct benefits to society, nature and the communities in which the business operates. In addition, the company can gain internal benefits through the initiatives. Knowing that your company promotes good causes can increase employee satisfaction and enhance staff retention. Additionally, members of the public are more likely to choose to do business with companies that try to make a more conscious positive impact outside of their business.

What Are the 4 Types of CSR?

CSR initiatives are often divided into four categories: environmental, philanthropic, ethical, and economic responsibility. Environmental initiatives focus on preserving natural resources, while philanthropic initiatives focus on donating to worthy causes that may not be related to business. Ethical responsibility ensures fair and honest business operations, while economic responsibility contributes to the fiscal support of the above objectives.

What Companies Have the Best CSR?

There is no single defining rubric for evaluating all companies’ CSR. Different sources will review and compile rankings differently. Since 1999, Corporate Responsibility magazine has annually ranked the top 100 corporate citizens among the 1,000 largest public companies in the United States. The ranking is determined based on employee relations, environmental impact, human rights, management and financial decisions.

In 2021, the top five on the list included Owens Corning, General Motors, HP, Cisco and Intel.

The Bottom Line

Companies that seek to measure success beyond bottom line financial results can adopt corporate social responsibility strategies. These strategies can point to environmental, ethical, philanthropic and fiscal responsibility that extends beyond the products they sell. CSR aims to make the world a better place beyond customer transactions and can also generate specific benefits for the company.

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