Corporate Social Responsibility

What is Corporate Social Responsibility?

Photo courtesy of Harvard Business School OnlineOpens in new window Corporate Social Responsibility is concerned with actions that affect a variety of parties in a company shows concern for all its stakeholders‐anyone who, like owners, employees, customers, and the communities in which it does business, has a stake or interest in it.

Corporate Social Responsibility (CSR) is synonymous to doing good. Thus we define CSR as:

A key element of this definition is the word discretionary.

We are not referring here to business activities that are mandated by law or that are moral or ethical in nature and perhaps therefore expected. Rather, we are referring to a voluntary commitment a business makes in choosing and implementing these practices and making these contributions.

Such a commitment must be demonstrated in order for a company to be described as socially responsible and will be fulfilled through the adoption of new business practices and/or contributions, either monetary or nonmonetary. The term community wellbeing in this definition includes human conditions as well as environmental issues.

Others have offered several distinct definitions of corporate social responsibility. One originating from the World Business Council for Sustainable DevelopmentOpens in new window reflects the council’s focus on economic development in describing CSR as:

The organization Business for Social ResponsibilityOpens in new window defines CSR as:

This definition is somewhat broader as it encompasses business decision making related to “ethical values, legal requirements, as well as respect for people, communities, and the environment.”

Corporate social responsibility is regarded as a self-regulating business model that helps a company be socially accountable to itself, its stakeholders, and the public. Recognizing how important social responsibility is to their customers, many firms now focus on and practice a few broad categories of CSR briefly described below:

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.     Philantropy

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.

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.

But Why Do Good?

Most health care professional promise that if we engage in regular physical activity we’ll look better, feel better, do better, and live longer.

There are many who say that participation in corporate social initiativesOpens in new window has similar potential benefits. It appears that such participation looks good to potential consumers, investors, financial analysts, business colleagues, in annual reports, in the news, and maybe even in Congress and the courtroom.

It is reported that it feels good to employees, current customers, stockholders, and board members. There is growing evidence that it does good for the brand and the bottom line as well as for the community. And there are some who claim that corporations with a strong reputation for corporate social responsibility actually last longer.

Business for Social ResponsibilityOpens in new window is a leading nonprofit global organization providing businesses with information, tools, training, and advisory services related to integrating corporate social responsibility in their business operations and strategies. Their research and experience concludes that companies have experienced a range of bottom-line benefits, including reference to several of the following: