Corporate social responsibility (CSR) refers to a business practice that involves participating in initiatives that benefit society. Liz Maw, CEO of nonprofit organization Net Impact, noted that CSR is becoming more mainstream as forward-thinking companies embed sustainability into the core of their business operations to create shared value for business and society.
Corporate
Social Responsibility is
defined as
the voluntary activities to
co- operate in an economic, social and environmentally sustainable manner. As
voluntary activities, the financial institutions may be engaged in green banking,
rural development, education assistance, poverty reduction programs, assistance
to people physical disable people, and assistance to peoples affected by national disaster. Some companies may engage in "green-washing"
or feigning interest in corporate responsibility, but many large corporations are devoting real time and
money to environmental sustainability programs, alternative energy,
and various social welfare initiatives to benefit employees, customers, and the community at large.
"Sustainability isn't just important for
people and the planet, but also is vital for business success," said Maw,
whose company connects students and professionals who want to use business
skills to do social good. "Communities are grappling with problems that
are global in scope and structurally multifaceted — Ebola, persistent poverty,
climate change. The business case for engaging in corporate social
responsibility is clear and unmistakable. Billions are at stake if fast and
large-scale action is not taken."
As consumers' awareness about global social
issues continues to grow, so does the importance these customers place on CSR
when choosing where to shop
"Technology has brought global connectivity
and enabled advocacy and awareness for social situations that were once
obscure," said Alexis Magnan-Callaway, whose fashion company Pax Cult donates 10 percent of its profits to an
organization of the customer's choice. "Millennials are redefining what it
means to connect and give back through this technology. It's not just about
having a recycling program or sustainable products. People want to feel good
about what their dollar is doing."
Consumers aren't the only ones who are drawn to
businesses that give back. Susan Cooney, founder of crowdfunding philanthropy
platform Givelocity, said that a
company's CSR strategy is a big factor in where today's top talent chooses to
work.
"The next generation of employees is seeking
out employers that are focused on the triple bottom line: people, planet and
revenue," Cooney told Business News Daily. "Coming out of the
recession, corporate revenue has been getting stronger. Companies are
encouraged to put that increased profit into programs that give back."
Types of corporate social responsibility
CSR can encompass a wide variety of tactics, from
giving nonprofit
organizations a portion of a company's proceeds, to giving away a product
or service to a worthy recipient for every sale made. Here are a few of the
broad categories of social responsibility that businesses are practicing:
Environment: One primary
focus of corporate social responsibility is the environment. Businesses,
both large and small, have a large carbon footprint. Any steps they can take to
reduce those footprints are considered both good for the company and society as
a whole.
Philanthropy: Businesses
also practice social responsibility by donating to national and local
charities. Whether it involves giving money or time, businesses have a lot of
resources that can benefit charities and local community programs.
Ethical labor practices: By
treating employees fairly and ethically, companies can also demonstrate their
corporate social responsibility. This is especially true of businesses that
operate in international locations with labor laws that differ from those in
the United States.
Examples of corporate social responsibility
While many companies now practice some form of
social responsibility, some are making it a core of their operations. Ben and
Jerry's, for instance, uses only fair trade ingredients and has developed a dairy
farm sustainability program in its home state of Vermont. Starbucks has
created its C.A.F.E. Practices guidelines, which are designed to ensure the
company sources sustainably grown and processed coffee by evaluating the
economic, social and environmental aspects of coffee production. Tom's Shoes,
another notable example of a company with CSR at its core, donates one
pair of shoes to a child in need for every pair a customer purchases.
Undertaking socially responsible initiatives is
truly a win-win situation. Not only will your company appeal to socially
conscious consumers and employees, but you'll also make a real difference in
the world. Keep in mind that in CSR, transparency and honesty about what you're
doing are paramount to earning the public's trust.
"If decisions [about social responsibility]
are made behind closed doors, people will wonder if there are strings attached,
and if the donations are really going where they say," Cooney said.
"Engage your employees [and consumers] in giving back. Let them feel like
they have a voice."