Corporate social responsibility (CSR) is a self-regulating business model that helps a company be socially accountable—to itself, its stakeholders, and the public. By practising corporate social responsibility, also called corporate citizenship, companies can be conscious of the kind of impact they are having on all aspects of society, including economic, social, and environmental. 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 boosting their brands.
Corporate social responsibility (CSR) isn’t just about doing the right thing. It means behaving responsibly and also dealing with suppliers who do the same. As important as CSR is for the community, it is equally valuable for 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 with the world around them. It also offers direct business benefits. Building a reputation as a responsible business sets you apart. Companies often favour suppliers who demonstrate responsible policies, as this can have a positive impact on how they are perceived by customers.
Some customers don’t just prefer to deal with responsible companies but insist on it. The Co-operative Group, for instance, place a strong emphasis on its corporate social responsibility and publishes detailed ‘warts and all’ reports on its performance on a wide range of criteria – from animal welfare to salt levels in its pizzas. Reducing resource use, waste and emissions don’t just help the environment – it saves you money too. It’s not difficult to cut utility bills and waste disposal costs and you can bring immediate cash benefits and also save money by reducing, reusing and recycling waste.
Why do we need CSR?
Consumers increasingly don’t accept unethical business practices or organisations who act irresponsibly. Advances in social media (giving everyone a voice) mean that negative or destructive practices quickly fuel conversations online. Organisations are accountable for their actions like never before.
Benefits of Corporate Social Responsibility
A good reputation makes it easier to recruit employees.
- Employees may stay longer, reducing the costs and disruption of recruitment and retraining.
- Employees are better motivated and more productive.
- CSR helps ensure you comply with regulatory requirements.
- Activities such as involvement with the local community are ideal opportunities to generate positive press coverage.
- Good relationships with local authorities make doing business easier.
- Understanding the wider impact of your business can help you develop new products and services.
- CSR can make you more competitive and reduces the risk of sudden damage to your reputation (and sales). Investors recognise this and are more willing to finance you.
Business Benefits of Corporate Social Responsibility
CSR should not be viewed as a drain on resources, because carefully implemented CSR policies can help your organization:
- Win new business
- Increase customer retention
- Develop and enhance relationships with customers, suppliers and networks
- Attract, retain and maintain a happy workforce and be an Employer of Choice
- Save money on energy and operating costs and manage risk
- Differentiate yourself from your competitors
- Generate innovation and learning and enhance your influence
- Improve your business reputation and standing
- Provide access to investment and funding opportunities
- Generate positive publicity and media opportunities due to media interest in ethical business activities.
For a company to be socially responsible, it first needs to be accountable to itself and its shareholders. Often, companies that adopt CSR programs have grown their business to the point where they can give back to society. Thus, CSR is primarily a strategy of large corporations. Also, the more visible and successful a corporation is, the more responsibility it has to set standards of ethical behaviour for its peers, competition, and industry.