Corporate Social Responsibility (CSR)

What is CSR

Corporate Social Responsibility is a management concept whereby companies integrate social and environmental concerns in their business operations and interactions with their stakeholders. (unido, 2022)

Nowadays, a company's reputation is based on more than just profitability, growth rate, and brand recognition. Competitors, internal and external consumers, employees, and investors play a role in how a company views the environment, community, and economy. As a result, corporate social responsibility has become a major concern for businesses. To determine which CSR initiatives are best linked with the company's goals, a company's values, vision & mission, and major concerns should be analyzed. (Reckmann, 2022)

 

Benefits of CSR 

Ø  Improved public image.

Ø  Increased brand awareness and recognition.

Ø  Cost savings.

Ø  An advantage over competitors.

Ø  Increased customer engagement.

Ø  Greater employee engagement.

Ø  More benefits for employees.

There are various ways for a company to start a CSR initiative, and these programs will benefit both the company and the community. People will want to join and work for these companies since it shows that they care for all people, including their employees. (Collier, 2018)

Importance of CSR

Having a CSR strategy can help you develop a positive reputation, and it's also vital for branding. One of the most essential benefits of having a well-known brand is that it can attract customers, as people prefer to buy a high-quality product from a company that is socially responsible. CSR can help your company engage with customers more effectively. A good CSR plan requires a company to connect closely with the community, and enhanced customer engagement will grow customer base and profitability. Socially responsible businesses will attract investors. Investors will rush to these organizations because they know they will get a good return on their investment (ROI). (Heyward, 2020)

Types of CSR categories

CSR initiatives can be categorized as below. There should be measurable key performance indicators to track the success of these efforts. (Stobierski, 2021)

v  Environmental responsibility

o   concentrating on creating a better environment

v  Ethical responsibility

o   Fair and ethical treatment of employees.

v  Philanthropic responsibility

o   donating money, products and services to nonprofits and social causes

v  Economic responsibility

o   The goal is not to maximize profit, but to have a positive impact on the environment, people, and society.

 

Examples of CSR initiatives (Reckmann, 2022)

·         Reducing carbon footprint and energy consumption

·         Engaging in wildlife conservation initiatives

·         Encouraging charity and volunteer work

·         Supporting local communities

·         Improving labor policies

·         Ensuring diversity and equality in the workplace

·         Investing in nonprofit organizations

 

The Triple Bottom Line Theory

 

Figure 01: The Triple Bottom Line Theory. Source (Miller, 2020)

Though profit and loss are important indicators of an organization's performance, interactions with the environment, community, and economy are also important. The triple bottom line theory includes contributions to environmental health, social well-being, and a just economy in business performance measurements. The three "P's" are referred to as the bottom line categories: Profit, People, and Planet. (Miller, 2020)

§  Profit

Organizations need a strong strategic plan to reduce costs and increase productivity and making the right decisions at the right time is also critical to measure the profitability of the organization. However, now businesses use their profits to launch CSR initiatives.

§  People

All stakeholders, including customers and employees, are considered in the people category. Companies try to create value for people who own company shares. Ensure a healthy and safe work environment, community engagement, and volunteerism are just a few examples of initiatives that can be implemented.

§  Planet

Operating and managing a business is challenging since it is about more than just making a profit, and companies have realized that their operations have an impact on environmental health and climate change. As a result, businesses have realized that being eco-friendly is essential to their long-term success.

 

Conclusion

It has become critical for every organization to have a focus and CSR plans on how to give back to society while maintaining profitability. Customer satisfaction and employee retention are two of the most important aspects of any successful organization, and CSR may assist your company in better engaging with customers. A good CSR strategy requires a strong relationship with the community, and increased consumer engagement will expand the customer base and profitability.

References

Collier, E., 2018. High speed training. [Online]
Available at: https://www.highspeedtraining.co.uk/hub/importance-of-corporate-social-responsibility/
[Accessed 12 April 2022].

Heyward, C., 2020. Forbes. [Online]
Available at: https://www.forbes.com/sites/forbesbusinesscouncil/2020/11/18/the-growing-importance-of-social-responsibility-in-business/?sh=20f350102283
[Accessed 12 April 2022].

Kuntz, K., 2018. coolchoices. [Online]
Available at: https://coolchoices.com/blog/achieving-triple-bottom-line-results-via-employee-engagement/
[Accessed 13 April 2022].

Miller, K., 2020. Harvard Business School online. [Online]
Available at: https://online.hbs.edu/blog/post/what-is-the-triple-bottom-line
[Accessed 12 April 2022].

Reckmann, N., 2022. BUSINESS NEW DAILY. [Online]
Available at: https://www.businessnewsdaily.com/4679-corporate-social-responsibility.html
[Accessed 12 April 2022].

Stobierski, T., 2021. Harvard Business School online. [Online]
Available at: https://online.hbs.edu/blog/post/types-of-corporate-social-responsibility
[Accessed 12 April 2022].

unido, 2022. unido. [Online]
Available at: https://www.unido.org/our-focus/advancing-economic-competitiveness/competitive-trade-capacities-and-corporate-responsibility/corporate-social-responsibility-market-integration/what-csr
[Accessed 12 April 2022].