What is corporate social responsibility?
Corporate social responsibility or CSR is the practice of a corporation thinking about and managing its impact on its community and environment. This often manifests through dedicated acts of philanthropy and charity.
There are several types of solutions related to corporate social responsibility available. First, there’s the corporate social responsibility software which organizes, deploys, and measures an organization’s volunteering and charitable activities. This can include partnering with dedicated causes, a large database of opportunities to give back, and matching donations.
Another tool is volunteering software, a specific offshoot of this category that delves into the specifics of matching people to causes they care about with their skills. For organizations that host recurring events, this is especially helpful. If an organization is only dedicated to nonprofit acts, nonprofit software is a better match.
However, this category also includes managing the environmental impact, which can be done using environmental health and safety (EHS) software. This measures waste management, resources, and other operating assets to ensure energy and resources are consumed wisely. It also helps minimize the impact on the environment. While it may not fall under the same type of software as volunteering or corporate social responsibility software, it still operates off the same basic CSR principles.
Types of corporate social responsibility
There are at least eight different common types of corporate social responsibility.
- Diversity and inclusion: Diversity and inclusion is the practice of welcoming people from various backgrounds, cultures, and demographics and making them feel equally welcome and heard within an organization. Using diversity recruiting software is the first step to building a welcoming community.
- Economic responsibility: This considers the company’s impact on the local economy. The economic responsibility includes bringing awareness to and pushing causes that fight poverty, assist the unhoused, and address other forms of wealth inequality.
- Environmental responsibility: Waste disposal and energy consumption are two of the most common concerns when considering environmental impact. This responsibility includes being mindful of where and how supplies are sourced and eliminating potential pollutants from the process, sometimes with sustainability management software.
- Ethical responsibility: This includes issues ranging from whistleblowing to creating proactive frameworks to keep everyone within the organization equally accountable and rooting out corruption and harassment.
- Human rights: Going beyond the day-to-day concerns, this is for companies that let themselves be guided by a responsibility to human rights to donate or assist organizations that are dedicated to stopping human trafficking, genocide, widespread famine, and other unspeakable horrors.
- Labor practices: Equal pay is an example of a guiding principle for ensuring fair labor practices. This includes giving employees adequate compensation, following local, regional, and international labor laws, and creating a safe and productive workplace.
- Philanthropic responsibility: Cultivating a community of giving and volunteering is the main goal for many. This can involve matching donations, organization fundraising or volunteering events, or partnering long-term with charitable organizations.
- Volunteering: Using time and talents rather than money to convey a commitment to change is the goal of fostering a volunteering atmosphere. Participants can use volunteer management software to organize. Here the cause is important, but the commitment involves time and hands-on contact with a societal problem, fostering a sense of community.
Organizations may also want to consider the areas of impact close to home. Whether it’s a specific health issue, an issue in the local community, or international disaster relief, there are always worthy causes worth pursuing and adding to the roster.
Benefits of using corporate social responsibility
Companies have been applying the ideas of corporate social responsibility since the 1920s, but in modern business, there are multiple reasons for companies to embrace this philosophy. Here are the benefits of CSR:
- Brand awareness and reputation management: When organizations use resources to assist others, they impact everyone in the process, from employees to managers to members of the affected group. It provides excellent word of mouth.
- Customer loyalty: If customers feel a business is doing good for the world, they’re more likely to buy, stay, and consider services than they would be for similar, unaffiliated competitors.
- Employee engagement: Everyone wants to make a difference. Whether volunteering, charitable giving, or raising awareness, workers feel more connected to their job and one another.
- Investment opportunities: A company with CSR principles has brand recognition, employee engagement, staying power, and often a clearer vision and mission. For this reason, investors find it a huge value-add when deciding what companies to back.
- Productivity: Better engagement, improved teamwork, and a common cause united workers helping them to work harder, be more productive, and cut down disputes.
- Reduce costs: Being responsible with energy, in particular, can mean massive savings for any business as everyone is primed to find ways to save energy and minimize waste.
- Relationship building: An organization can build long-lasting bonds by working with other community groups. This helps open up new business areas and connect with potential future collaborators.
- Turnover: Happier employees are less likely to leave, so retraining and hiring costs go way down.
Basic elements of corporate social responsibility
As discussed earlier, corporate social responsibility covers multiple topics. However, despite this, some universal elements unite most processes.
The format for corporate social responsibility in HR can vary, but complete CSR will include the following elements:
- Beliefs or values: Focus is important when choosing a mission. That’s why establishing the core beliefs and values of the company matters. Without them, it’s difficult to steer CSR in a meaningful direction.
- Giving or donations: Funds are the simplest way to demonstrate a cause's interest. Organizing fundraisers, giving campaigns, or collecting donations, is a basic building block of bringing philanthropy into work life.
- Grant management: For organizations undertaking their initiatives or organizing volunteering camps, it may be necessary to procure a large number of funds, not just from profits or employee donations. In this case, grant management is essential.
- Mission: If beliefs and values are the building blocks, a mission is a foundation. Without a clear statement of purpose, it’s easy to become disorganized and lessen the impact with uncoordinated efforts.
- Nonprofits: For companies that have been founded for the sole purpose of helping others, nonprofit status allows them to give more resources to those in need. With a nonprofit status comes different sets of challenges that require an entirely different set of tools.
- Sustainability: While some efforts are quick, one-off contributions, others are intended to help improve the infrastructure or be an ongoing boon to their particular cause. In this case, creating something sustainable that can last many years and survive ebbs and flows is essential.
Corporate social responsibility best practices
There are several ways to go about CSR initiatives, but keeping certain ideas in mind is the best. To make corporate social responsibility work, follow these best practices:
- Connect with organizational values: An organization's efforts must be tied to the original intent. Keeping a clear vision for everyone to follow directs and charges efforts.
- Empower employees: People will likely lose interest if everything is run from the top down. Let workers choose when and how they spend the time and resources of the company. If they’re allowed to own it, it’s sure to be more successful.
- Interdepartmental cooperation: Align efforts within the company and across various departments. It’ll bring a broader range of talents to the table and improve communication.
- Procure top talent: Organizations need the right people to get the best results. If volunteering is an important part of the business, consider it a goal to find interested individuals during the hiring process.
- Select appropriate metrics: How to truly measure success? Is the company rewarding effort or just those who can give the most fiscally? Decide on a proper set of criteria that define a successful CSR strategy.
- Solicit feedback: Always look for ways to improve from the people closest to the issue.
Corporate social responsibility (CSR) vs. corporate social investment (CSI)
Corporate social responsibility isn’t the only important concept in business that allows people to stretch their minds beyond the ins and outs of work. There are a few similar and competing ideas that matter, such as corporate social investment (CSI), environmental, social, and governance (ESG), and triple bottom line (TBL or 3BL).
CSR relates specifically to the environment a business operates within, while CSI goes one step further. True CSI isn’t about brand recognition or profit but branches into a wide arena to address issues with the quality of life and improve them. If CSR is the theory, CSI is the praxis.
Corporate social responsibility (CSR) vs. environmental, social, and governance (ESG)
Some say ESG is replacing the more general idea of CSR. ESG covers more specifics and describes how to responsibly manage a company's framework and impact, with sustainability being the primary concern.
Corporate social responsibility (CSR) vs. triple bottom line (TBL)
TBL was originally coined by John Elkington in the mid-1990s as a better way to assess success in the corporate side of America. The TBL isn’t just about how a company profits or gets ROI for social or environmental acts. Instead, it focuses on the three Ps—profits, people, and the planet. These are the three points of accountability to help with serious sustainability.
Grace Savides
Grace Savides is a Senior Research Analyst who loves discussing all things HR. She enjoys exploring where the theory, policies, and data-driven side of the industry interacts with the unpredictable and ever-important human elements. Before G2, she worked in content marketing, social media, health care, and editing. She dedicates her leisure time to video games, painting, DND, and spending time with her wonderful boyfriend and two dogs.
