Corporate social responsibility (CSR)

What is corporate social responsibility?

Corporate social responsibility (CSR) is a broad business concept. It usually describes a company's
commitment to carry out their business in an ethical way.
This means managing their business processes while taking account of their social, economic and
environmental impact, and considering human rights.

Corporate social responsibility (CSR) is a company’s commitment to manage the social,

environmental and economic effects of its operations responsibly and in line with public
expectations.

It is part of a company’s approach to corporate governance and often touches every

part of the business—operations, human resources, manufacturing, supply chain, health
and safety, and more.
CSR activities may include:

 Company policies that insist on working with partners who follow ethical business
practices
 Reinvesting profits in health and safety or environmental programs
 Supporting charitable organizations in the communities where a company operates
 Promoting equal opportunities for men and women at the executive level
Some aspects of CSR may be required by law. For example, banks and hospitals are
legally required to protect people’s private information. Others are voluntary.

The benefits of CSR are many. Companies establish good reputations, attract positive
attention, save money through operational efficiency, minimize environmental impacts,
attract top talent and inspire innovation. Public companies often report on their CSR
performance in their annual reports.

CSR matters for companies because if the community does not approve of how they do
business, they may lose customers or see their reputations suffer. The news media and
activist groups often watch companies closely and are quick to publicize instances of
irresponsible behaviour.

Examples of corporate social responsibility

Corporate responsibility can cut across almost everything your business does. It can involve a range of CSR
activities, such as:
 environmental management, eg waste reduction and sustainability
 responsible sourcing, eg using only fair trade ingredients
 improvement of working standards and conditions
 contributing to educational and social programmes
 employee volunteering
 socially responsible investment
 development of employee and community relations

Ways to practice CSR

Recognizing how important social responsibility is to their customers, many companies
now focus on and practice a few broad categories of CSR:

1. Environmental efforts: One primary focus of corporate social responsibility is

the environment. Businesses regardless of size have a large carbon footprint. Any steps
they can take to reduce those footprints are considered both good for the company and
society.
2. Philanthropy: Businesses can also practice social responsibility by donating
money, products or services to social causes. Larger companies tend to have a lot of
resources that can benefit charities and local community programs.
3. Ethical labor practices: By treating employees fairly and ethically, companies
can also demonstrate their corporate social responsibility. This is especially true of
businesses that operate in international locations with labor laws that differ from those in
the United States.
4. Volunteering: Attending volunteer events says a lot about a company's sincerity.
By doing good deeds without expecting anything in return, companies can express their
concern for specific issues and support for certain organizations.

Building a socially responsible business

Undertaking socially responsible initiatives is truly a win-win situation. Not only will your
company appeal to socially conscious consumers and employees, but you'll also make
a real difference in the world.

Cooney stated that in CSR, transparency and honesty about what you're doing are
paramount to earning the public's trust.

"If decisions [about social responsibility] 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."

For instance, Burk added, Cadence gives $100 each year to the charity of choice for
each employee.

"Start integrating your ethos into your culture," Burk said. "Even if you don't have a huge
cause to focus on as an organization, you can always start with what is important to
your employees."
You should also involve your consumers, allowing them to see firsthand the work you
are doing for your community.

"If a brand has good news to share, like organic ingredients or recycled content, they
should let consumers know," said Boynton. "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. Announcing these benefits is a win-win from both a commercial and
sustainability perspective."

Maintenance is another major part of CSR. You must actively and consistently work on
your process; it's not a one-time deal.

"To keep your CSR efforts thriving, you need momentum and passion, and that have to
come from the top," said Burk. "Your stakeholders need to be fully committed. Focus on
responsibilities that are meaningful and relevant to you, your clients, your employees,
and your partners."

For some great examples of small businesses that put CSR at the heart of their
operations, check out this Business News Daily article.

How Corporations Benefit from Corporate

Social Responsibility
1. Improves Public Image
A corporation’s public image is at the mercy of its social responsibility programs and how aware
consumers are of these programs.

Remember, consumers feel good shopping at institutions that help the community. Clean up your
public image (and broadcast it to the world!).

Corporations can improve their public image by supporting nonprofits through monetary donations,
volunteerism, in-kind donations of products and services, and strong partnerships.

By publicizing their efforts and letting the general public know about their philanthropy, companies
increase their chances of becoming favorable in the eyes of consumers.

2. Increases Media Coverage

It doesn’t matter how much your company is doing to save the environment if nobody knows about it.

Make sure you’re forming relationships with local media outlets so they’ll be more likely to cover the
stories you offer them.

How much good a company can do in its local communities, or even beyond that, is corporate social
responsibility. And the better the benefits, the better the media coverage.
3. BOOSTS EMPLOYEE ENGAGEMENT

Employees like working for a company that has a good public image and is constantly in the media
for positive reasons.

Happy employees almost always equal better output.

Nearly 60% of employees who are proud of their company’s social responsibility are engaged at
their jobs.

When companies show that they are dedicated to improving their communities through corporate giving
programs (like matching gifts and volunteer grants!), they are more likely to attract and retain valuable,
hardworking, and engaged employees.

4. ATTRACTS & RETAINS INVESTORS

Investors who are pouring money into companies want to know that their funds are being used
properly.

Not only does this mean that corporations must have sound business plans and budgets, but it also
means that they should have a strong sense of corporate social responsibility.

When companies donate money to nonprofit organizations and encourage their employees to volunteer
their time, they demonstrate to investors that they don’t just care about profits.

Instead, they show that they have an interest in the local and global community.

Investors are more likely to be attracted to and continue to support companies that demonstrate a
commitment not only to employees and customers, but also to causes and organizations that impact
the lives of others.