Corporate Social Responsibility (CSR) is a structured way in which businesses can integrate the good of society and the environment into their own business goals. CSR was introduced as a way of adopting and promoting a more ethical and values-based approach to running a business, which would not just benefit the company itself but the wider community.
There are four critical areas of CSR:
- Economic responsibility
- Environmental responsibility
- Philanthropic responsibility
- Ethical responsibility
Any business knows that to survive, it needs to make a profit. But at what cost does that profit come? Of equal importance is that the company makes a positive economic impact on society as well, whether that is restricted to the local community or widened out to a broader, more global community.
Examples of economic responsibility include reaching out to the more vulnerable in society and offering job training to help improve their employment prospects, coordinating education programs with local institutions, ensuring that you pay your worker’s fair wages, and being more proactive in incorporating mental health initiatives.
There’s no denying that the climate question is at the forefront of everyone’s activities at present. Creating an environmentally sound, more sustainable business model has become de rigueur for every business model in the 21st century.
Examples of environmental responsibility need to demonstrate a firm long-term commitment to changing working practices. These include (as examples but by no means exhaustively) establishing a recycling policy that is rolled out in every area of the business, introducing a bike-to-work scheme, raising awareness of wasted energy use in the workplace, with a commitment to reduce it by changing individual behaviors; installing EV chargers in the car park; invest in renewable energies; rethink packaging options on products.
In short, philanthropic responsibility means to be charitable.
As a company, you may choose to simply support one favorite charity, such as Charity Meals for example, where you pledge a certain percentage of your profits. Over and above this, employees can be encouraged to become part of a volunteer program, where they go out into the local community for a few hours once a month to work with a charitable organization.
By examining its ethical standpoints on various issues, an organization is able to be more critical of its values with a view to improving them.
Examples of ethical responsibility might include conducting a complete equal pay audit and implementing any recommended changes, increasing the minimum wage, introducing a moral element to the purchasing and procurement process, and ensuring that all suppliers conform to stringent guidelines around their own employment and procurement processes.
How Does CSR Help a Company’s Success?
In terms of a company’s public image and brand values, CSR is essential to demonstrate that it is an organization that puts its money where its mouth is with regard to supporting communities. In the long term, this will help it to not only attract more customers who have bought into its ethical and responsible stance. It will also be more likely to gain brownie points from the financial community, such as banks and investment companies, many of whom make it an official stipulation if they are asked for financial support.
From an employee point of view, a proactive CSR program has demonstrated a definite increase in employee engagement and retention. It can give individual employees a sense of empowerment and ownership, allowing them to develop their skills in ways over and above the sometimes narrow confines of their work role.