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Week 15

Corporate social responsibility (CSR) refers to a business's responsibility to consider the social and environmental impacts of its decisions. CSR involves measuring social/environmental impacts alongside profits. It traditionally includes environmental, philanthropic, ethical, and economic responsibility. Embracing CSR can benefit businesses through improved marketing, employee engagement, and innovations that increase profits while reducing environmental impacts.

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Mohammad Tahir Mehdi
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81 views

Week 15

Corporate social responsibility (CSR) refers to a business's responsibility to consider the social and environmental impacts of its decisions. CSR involves measuring social/environmental impacts alongside profits. It traditionally includes environmental, philanthropic, ethical, and economic responsibility. Embracing CSR can benefit businesses through improved marketing, employee engagement, and innovations that increase profits while reducing environmental impacts.

Uploaded by

Mohammad Tahir Mehdi
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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BUSINESS STUDIED

WEEK 15

WHAT IS CORPORATE SOCIAL RESPONSIBILITY (CSR)?

Corporate social responsibility (CSR) is the idea that a business has a responsibility to the
society that exists around it, according to the online course Sustainable Business Strategy.

Firms that embrace corporate social responsibility are typically organized in a manner that
empowers them to be and act in a socially responsible way. It’s a form of self-regulation
that can be expressed in initiatives or strategies, depending on an organization’s goals.

Exactly what “socially responsible” means varies from organization to organization. Firms
are often guided by a concept known as the triple bottom line, which dictates that a
business should be committed to measuring its social and environmental impact, along with
its profits. The adage “profit, people, planet” is often used to summarize the driving force
behind the triple bottom line.

TYPES OF CORPORATE SOCIAL RESPONSIBILITY

Corporate social responsibility is traditionally broken into four categories: environmental,


philanthropic, ethical, and economic responsibility.

1. Environmental Responsibility
Environmental responsibility refers to the belief that organizations should behave in as
environmentally friendly a way as possible. It’s one of the most common forms of corporate
social responsibility. Some companies use the term “environmental stewardship” to refer
to such initiatives.

Companies that seek to embrace environmental responsibility can do so in several ways:

 Reducing pollution, greenhouse gas emissions, the use of single-use plastics, water


consumption, and general waste
 Increasing reliance on renewable energy, sustainable resources, and recycled or partially
recycled materials
 Offsetting negative environmental impact; for example, by planting trees, funding
research, and donating to related causes

2. Ethical Responsibility

Ethical responsibility is concerned with ensuring an organization is operating in a fair


and ethical manner. Organizations that embrace ethical responsibility aim to achieve fair
treatment of all stakeholders, including leadership, investors, employees, suppliers, and
customers.
Firms can embrace ethical responsibility in different ways. For example, a business might
set its own, higher minimum wage if the one mandated by the state or federal government
doesn’t constitute a “livable wage.” Likewise, a business might require that products,
ingredients, materials, or components be sourced according to free trade standards. In this
regard, many firms have processes to ensure they’re not purchasing products resulting
from slavery or child labor.

3. Philanthropic Responsibility

Philanthropic responsibility refers to a business’s aim to actively make the world and


society a better place.

In addition to acting as ethically and environmentally friendly as possible, organizations


driven by philanthropic responsibility often dedicate a portion of their earnings. While
many firms donate to charities and nonprofits that align with their guiding missions, others
donate to worthy causes that don’t directly relate to their business. Others go so far as to
create their own charitable trust or organization to give back.

4. Economic Responsibility

Economic responsibility is the practice of a firm backing all of its financial decisions in
its commitment to do good in the areas listed above. The end goal is not to simply
maximize profits, but positively impact the environment, people, and society.

BENEFITS OF CORPORATE SOCIAL RESPONSIBILITY

Most firms are driven to embrace corporate social responsibility due to moral convictions, and
doing so can bring several benefits.

Corporate social responsibility initiatives can, for example, be a powerful marketing tool, helping a
company position itself favorably in the eyes of consumers, investors, and regulators. CSR
initiatives can also improve employee engagement and satisfaction—key measures that drive
retention. Such initiatives can even attract potential employees who carry strong personal
convictions that match those of the organization.

Finally, corporate social responsibility initiatives, by their nature, force business leaders to examine
practices related to how they hire and manage employees, source products or components, and
deliver value to customers.

This reflection can often lead to innovative and groundbreaking solutions that help a company act
in a more socially responsible way and increase profits. Re-conceptualizing the manufacturing
process so that a company consumes less energy and produces less waste, for example, allows it
to become more environmentally friendly while reducing its energy and materials costs—
value that can be reclaimed and shared with both suppliers and customers.

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