CSR Meaning: How Corporate Social Responsibility Influences You And Your Business
In the 21st century, businesses need to be a lot more aware of the responsibility they have to their stakeholders, customers, and employees. But it is equally important to recognize the impact their practices have on the planet and society as a whole.
Accountability, both within a business’s culture and its external operations, has become a topic of much discussion in recent years due to efforts around the globe to make industries more sustainable.
There are many benefits that can come from incorporating more Corporate Social Responsibility (CSR) considerations into your company, not to mention the potential back-lash that could come from not taking any steps at all. This isn’t a premise that can be ignored.
So let’s have a look at what CSR really means to you and your business, the various types that exist, and how it can help you in the long-run.
What Is Corporate Social Responsibility?
Corporate Social Responsibility encompasses the impact that a company has on the world around them. It is also known as corporate citizenship, and works under the premise that every company should do what they can to be more considerate of how they operate.
The general viewpoint is that businesses should be assisting in making the world a better place. Whilst it is easier for larger businesses to engage with CSR initiatives, as they are already well established and making significant profits, it is useful for every company to keep these principles in mind. By building your business model around CSR early on, it will be easier to continue contributing to society as your company expands.
Instead of a single bottom-line for businesses, CSR programs put an emphasis on a triple bottom line: people, planet, and profit. This ensures that companies aren’t just working for their own self-interest, but the interest of society and the world.
4 Types of Corporate Social Responsibility
There are a number of different types of corporate social responsibilities due to the wide range of topics that they have to cover. However, this ensures that real, actionable change can be made across all of society equally.
It is important to note that not everyone can cover all of these issues to the same degree, whether that is due to the size of a company, their location, or what sector they operate in. Prioritizing one over another does not make you less socially responsible – it means you are directing your resources to where they can make the most difference.
1. Economic Responsibility
Economic corporate social responsibility can be a tricky aspect to realize fully due to the inherently fickle nature of money and profit. If you’re barely breaking even, it can be very hard to know where to direct your finances to make a positive difference.
But, for larger corporations, economic responsibility means distributing the wealth you accumulate fairly in order to help society and the people working for you (who allow you to continue operating). It is a driving force that helps all other CSR components come together, and links with them in vital ways.
Environmentally investing in sustainable, renewable sources, and helping the natural landscape
Philanthropically supporting small businesses, charities, and efforts to make the world a better place
Ethically not cutting corners to save a dollar or two at the expense of workers and customers
2. Environmental Responsibility
We only have one planet to live on, so it’s our job to make sure that we keep it livable for everyone who comes after us. The aim to leave the world better than we found it and lessening our overall environmental impact has become a frontrunner for business strategies recently. More and more people are campaigning for greater steps to be taken to reduce the carbon-footprint of big corporations and help combat the effects of climate change around the world.
Sustainability has become a core value of many companies, leading to changes in materials and business operations to ensure cleaner, greener practices. This can include:
Changes in energy type (i.e. moving from fossil fuels to renewable energy),
Limiting waste,
Encouraging greener get-to-work schemes such as car-sharing, discounted access to public transport, or cycling initiatives,
A more environmentally friendly supply chain (e.g. locally sourced rather than shipping things across the globe)
3. Philanthropic Responsibility
There are hundreds of organizations all around the globe trying to make the world a better place. Often, these initiatives are underfunded and understaffed, built on the backs of goodwill and a desire for change. Philanthropic responsibility encourages larger corporations to support charities, nonprofits, and local communities in order to bolster these efforts.
This can also be extended to the workers inside of a company. For example, if your employees are fundraising or campaigning in their own philanthropic venture, you would be considered to have a responsibility to contribute and help them. This would then reflect positively on your business, and would help boost your employees’ respect for you since you were willing to help them.
The empowerment of new entrepreneurs who are on a mission to develop new, sustainable practices and technology is something that should be encouraged, not hindered.
4. Ethical, Human, and Social Responsibility
Ethical behavior means facing the challenges many people would rather run away from. It means standing up for what you believe in and acting on your values, even in the face of adversity or hardship.
Every company has a responsibility to its employees to ensure that they are protected, cared for, and supported not only in their work environment, but outside of it as well. It means inclusion and anti-discrimination, and equality in all things. A strong DEIB practice will help make sure that everyone feels welcome in your company, and promotes a sense of psychological safety, whereby everyone is free to speak their minds and contribute without fear of harassment or discrimination.
This mentality should also be extended to everyone outside of the company, including vendors, customers, stakeholders, and to the public in general. This includes standing up for human rights issues in other countries, especially if your business operates in an offending region.
Acting ethically also means taking accountability for what you do, without passing off the blame onto others. If you have found yourself using an unethical provider in the past, it is important to step up and acknowledge your mistake, and better yourself moving forward.
6 Ways to Measure CSR
The effectiveness of your CSR strategies can be measured through environmental, social, and governance (ESG) metrics and KPIs. Understanding your own positive and negative contributions allows you to be transparent with your consumers and the general public. It also provides you with continuous information on how you’re progressing, and helps you to better visualize your goals.
1. Emissions, Pollution, and Waste
Every business has emissions in some form or another. But there are always ways to reduce the amount you produce. Take a look not only at obvious emissions such as CO2 and chemical pollutants, but also more obscure ones such as your levels of noise emissions.
You can gather data both from your internal workings by tracking your emission levels, but you can also talk to residents in your local area to see what they have to say. This will provide you with a good range of both qualitative and quantitative data which you can act on. Qualitative data is useful for looking into the details of peoples’ opinions and decisions, whereas quantitative data can provide a sense of size and scale.
It may not be immediately apparent to your business that you are causing disturbances, so analyzing both factors will help provide a more balanced reasoning for your decision-making.
Taking the time to talk to people and make changes based on their comments will help bolster your public image, as it shows you care about the people around you.
Similarly, you should look at how much waste you are producing. Assess if there are ways to limit your wastefulness by recycling more or using renewable materials. And, if your waste production is unavoidable, are you disposing of it as ethically and safely as possible?
2. Employee Engagement
Good corporate governance and strong CSR practices will make for more engaged and involved employees. Engagement is quite easy to keep track of, since it is based on an individual’s ability to connect with their work and complete it.
It can also be monitored through how much they contribute to team work, or put forward their ideas in discussions. Regular check-ins with human resources allow you to keep tabs on your employees and make sure they feel confident in what they’re doing, and can continue performing at their best.
Alternatively, you can use sentiment analysis to gather qualitative data about how your employees really feel. What are their reasons for staying engaged? You need to ensure that you are balancing their satisfaction levels, too.
3. Finances
The financial situation within your company can also provide a useful benchmark for how well you are working towards CSR. There are several questions to consider, including:
Are you offering comfortable living wages which are in line with or above industry standards?
Are you committed to providing fair, equal wages in accordance with DEIB practices?
Do you reinvest any profits into bettering the lives of your workers and the society you operate in?
Do you donate to charities and charitable endeavors?
Money is an easy metric to track, making it an excellent unit of measurement if you want to see how you are aiding your corporate social responsibilities in an economical way.
4. Public Image
You can use the internet to track peoples’ responses to your brand and business practices. Alternatively, you can offer your customers questionnaires to assess their satisfaction with you and your products. The same can be done with your stakeholders to see if they are happy with the decisions you are making as a business, or if they would prefer to take their money elsewhere.
Make sure your branding adheres to the values you put forward, and showcase how you are working towards them. Your employer branding is just as important as your corporate branding, since the two are linked together. Not only do you need to make sure your company is making ethical, socially responsible decisions, but you also need to be a good employer and a good leader. Developing a strong set of people-skills are vital.
5. United Nations’ Sustainable Development Goals
The UN has proposed 17 goals to help achieve sustainable development that are applicable not only for global governments, but also for businesses. This clear alignment of values can help progress development all over the world at a faster rate, and is a very useful way of assessing the utility of your CSR aims.
Zero poverty. Offer your employees a livable wage that ensures they’re not just barely scraping by.
Zero hunger. Employ food schemes such as a canteen or vouchers for nearby restaurants.
Good health and well-being. Check in on the physical and mental well-being of your employees, and offer counseling for if someone’s going through a hard time.
Quality education. Offering training and educational opportunities leads to the empowerment of your employees, and allows them to develop skills which can help them in later life.
Gender equality. There should be absolutely no discrimination on the basis of sex.
Clean water and sanitation. You should always provide clean, comfortable services, and unlimited access to water.
Affordable and clean energy. Move away from using fossil fuels and invest in renewable energy.
Decent work and economic growth. The profits you make should help to further your CSR efforts and create a better environment for everybody.
Industry innovation and infrastructure. Make sure your facilities are accessible to everyone, and that your offices have a good amount of natural light and access to green spaces.
Reduced inequalities. Develop programs to help underrepresented demographics, and help provide equal opportunities for everyone.
Sustainable cities and communities. Advocate for your local area and help develop it into a more sustainable environment that benefits everyone.
Responsible consumption and production. Make your manufacturing process as responsible as it can be.
Climate actions. By moving towards using sustainable, natural resources, you are helping to protect the climate.
Life below water. Pollutants in our bodies of water are a significant issue; dispose of your waste responsibly rather than dumping it into rivers or seas.
Life on land. Deforestation plagues countries all over the world. Research the steps you can take to limit or completely eliminate this impact.
Peace, justice and strong institutions. Speak up against injustice when you see it, and advocate for human rights around the globe.
Partnerships for the goals. Collaborate with other companies that align with your values.
6. ISO 26000
The International Organization for Standardization (ISO) 26000 was implemented in 2010, and provides a guideline for socially responsible practices that a business could engage with. Whilst it cannot be certified, it is a useful checklist that you can measure your company against and refer back to if you are looking for more ways to increase your CSR.
Here is a list of their 7 core subjects, as well as some of the sub-clauses within them:
Organizational governance. This is defined as “a system by which an organization makes and implements decisions in pursuit of its objectives.”
Human rights. E.g. due diligence, resolving grievances, and economic, social and cultural rights
Labor practices. E.g. social dialogue, health and safety at work, and employment & employment relationships
The environment. E.g. prevention of pollution, climate change mitigation and adaptation, and sustainable resource use
Fair operating practices. E.g. anti-corruption, fair competition, and respect for property rights
Consumer issues. E.g. sustainable consumption, access to essential services, and consumer data protection and privacy
Community involvement and development. E.g. community involvement, health, and technology development and access
3 Benefits of Corporate Social Responsibility for Your Business
Engaging with CSR might seem like a chore to some, but it’s an essential part of running a sustainable, ethically sound business. But the benefits of CSR incorporation far outweigh the cons, and you’ll soon begin to reap the rewards of your decision.
1. Better PR And Good Brand Imaging
There is a lot more attention on companies in the age of social media, and everyone seems to be waiting with bated breaths to tear someone apart for their slightest fault. Maintaining good public relations is essential to draw in new customers and keep the current ones satisfied.
Companies with bad business practices who do not care about their levels of waste, the satisfaction of their workers, or the quality of their products will have significantly less success than their counterparts.
Better CSR will have a positive impact on your brand image as people will be able to see that you are dedicated to your causes, and engage in good corporate sustainability. Additionally, transparency makes for a more honest and therefore attractive company, so being open with the workings of your business, who your suppliers are, and what you stand for will all work in your favor.
2. Better For The Planet
Every step that a company takes towards creating a more sustainable future is a win, not only for themselves, but for the planet as a whole. There’s a great sense of achievement from being part of something bigger than oneself; you’ll find that sustainable action creates a better sense of morale amongst employees.
Moreover, changing your resources to be better for the planet has been shown to reduce costs in the long-run by 60%, according to McKinsey Sustainability, which is an enormous difference. Better resource practices also means greater efficiency.
3. Happier Employees
By acting more responsibly when it comes to your workforce, you’ll find that your employees feel happier, supported, and are willing to engage more. If you are having issues with employee retention, it’s important to conduct exit interviews to know what problems are so that you can accurately address them.
By developing an appreciation for workers’ well-being and the necessity of flexibility, you’ll be able to hold on to them for longer. And the money you save from not having to re-hire can go back towards creating a better work environment and a strong, happy culture for your employees to thrive in.
3 Examples Of Brands That Do CSR Well
If you’re looking for inspiration for companies that manage to hit the CSR nail on the head, here are 3 examples who consistently prove themselves to be dedicated to the cause.
Starbucks
Starbucks frequently appears on lists of companies with strong CSR efforts due to their practices surrounding their sustainability. They are one of the largest purchasers of Fair Trade coffee. Alongside this, they have pledged to provide 100 million coffee trees by 2025.
Their efforts ensure that the farmers and providers they work with are paid fairly for their work. Fair Trade reported that, “Of the total value of coffee (around 200 billion dollars in 2015), only 10% stays in the countries of origin”. This has led to extremely high rates of child labor and poverty as people try to work as much as they can for as little cost as possible. By working with ethical producers, Starbucks ensures that their global efforts help to pay farmers what they deserve.
Mr Beast
Young philanthropist Jimmy Donaldson, also known as Mr Beast, is a rather extreme example of someone who puts CSR at the forefront of everything he does. In the last few years, he has organized and founded several highly successful business ventures, such as:
Beast Philanthropy: a charity dedicated to helping people across the world. To date, they have provided 20,000 shoes to children in South Africa, collaborated with Team Seas to clean millions of pounds of trash from the oceans, and rebuilt dozens of homes in Kentucky in the wake of a devastating tornado.
Beast Burgers: a ghost-kitchen which Donaldson started during the COVID-19 pandemic to assist other restaurants which were at risk of going into administration.
Feastables: a chocolate bar company which uses 100% naturally-sourced ingredients. They are certified by the Rainforest Alliance, and partnered with EcoCart “to offer a carbon neutral checkout” and “eliminate waste through the recycling of their packaging”.
Intel
Intel’s CSR activities have earned it a reputation as one of the leaders in corporate sustainability. Their yearly sustainability report provides insight into the work that they have been doing to achieve the best CSR possible, as well as new goals that they want to hit moving forward. For example, in their report from 2021/22, they revealed that they “enabled the restoration of approximately 2.3 billion gallons [of water] through investments in watershed restoration projects”.
Moreover, they inspire their employees to also act in a socially responsible matter:
Final Thoughts
Taking accountability for your corporation doesn’t have to be a huge song and dance. It can be troublesome to admit that you were once at fault, but it’s only human. And a human connection is exactly what you need to create.
Corporate social responsibility allows you to better yourself and your company. It helps us to feel like we’re making a more impactful difference, and working together towards a brighter future. Profits are nice – of course they are. But the duty we have to the people we work with and the planet we live on cannot be understated. Every company has a social impact, whether big or small.
Louis Carter is the founder and CEO of Best Practice Institute, Most Loved Workplace, and Results-Based Culture. Author of In Great Company, Change Champions Field Guide, and Best Practices in Talent Management, as well as a series of Leadership Development books. He is a trusted strategic advisor and coach to CEOs, CHROs, and leaders of mid-sized to F500 companies – enabling change and steering employer brand development together with highly effective teams, leaders, and organizations as a whole.
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