In an increasingly social world where global image and impact matter a great deal more than ever before, companies are giving back to their communities and are being rewarded for it. Corporate social responsibility or CSR is being practiced by more and more companies all over the globe, and while practicing CSR brings praise, ignoring it at a certain threshold brings about consequences.
Essentially, once you start making a certain amount of money and choose not to start some program to give back to the community or environment, you’ll be met with criticism from influential people and organizations. But, with the different types of CSR out there, it isn’t hard to start giving back and reaping the benefits of a CSR program.
What Is Corporate Social Responsibility (CSR)?
CSR is a self-regulating business model that holds companies accountable for the impact they have on society and the environment as a whole. Think of CSR as a way companies balance their economic, environmental, and social goals, while simultaneously keeping share and stakeholders happy.
Types Of Corporate Social Responsibility
There are 4 main types or categories of CSR.
- Environmental
- Ethical
- Philanthropic
- Economic
Environmental responsibility is the easiest to explain as it is the belief that organizations need to function in environmentally friendly ways. Think of the “Going Green” movement, an outcry for everyone able to recycle and stop the unnecessary waste of unrecyclable material, this is the essence of this movement.
Most businesses choose to reduce pollution, single-use plastic usage, and energy use, specifically fossil fuels. In line with this, these companies also use more renewable energy sources to power their buildings, as well as using recycled materials for their products or packages. The final commonplace method of environmental responsibility is offsetting. Offsetting is exactly what it sounds like, for every negative impact done, a positive impact is made. An example of this is when a company plants a tree for every X amount of something happening. This doesn’t only have to be trees, it could be donations to relief funds, installing wells in remote villages in other countries, or just any positive outcome without any negative impact. In a more personal manner, billionaire Bill Gates has reportedly practiced offsetting every time he uses his private jet to get around by “buying offsets through a company that runs a facility that removes carbon dioxide from the air.”
Ethical responsibility refers to how an organization operates and is considered necessary for all modern companies. This means treating everyone fairly and equally, whether you’re a stakeholder, an employee, or even just a customer. Raising the minimum wage of the company, sourcing locally grown produce, and refusing to outsource to locations without proper labor laws are all examples of ethical responsibility in action.
Philanthropic responsibility involves the voluntary contributions offered by companies to improve society. The most common form of this is through charitable donations, specifically to other non-profit organizations. Bigger companies even elect to start their own non-profit foundations in order to stay in control of how the help is administered.
The last category is economic responsibility. This responsibility has organizations thinking about the 3 other responsibilities when making financial decisions. This changes the end goal from making the most amount of money possible, to making the most amount of money possible while positively impacting the environment and society as a whole.
Why Is Corporate Social Responsibility Important For Your Business?
Completely ignoring all the good corporate social responsibility has brought to the world thus far, CSR is important as it improves your company in the eyes of the public, aka good publicity. Going further, being seen as a positive influence in the world helps you foster and improve customer loyalty. In fact, some people will opt for your product or service because of your impact on society.
Brand awareness is improved with proper CSR. If your company is serious about its CSR program(s) you will eventually get noticed on either social or mainstream media. In most cases, social media comes first as your audience or customer base will be the ones who point out how you’re doing. Mainstream media comes after something goes viral on the internet, and at that point, the world will eventually be made aware of your presence.
Improved brand awareness can lead to an easier time recruiting talent. Instead of spending a large chunk of your recruitment budget on finding people, talent will come to you. This effectively flips the script on recruitment, allowing you to be more selective due to the influx of applicants versus when your recruitment team had to headhunt to find more specialized positions.
Last but certainly not the least important, CSR can lead to financial savings. One of the more famous examples of this is Apple’s green initiative. By removing the plastic power brick and the earbuds from their phone’s packaging, they eliminated a tremendous amount of plastic waste; at the same time, they were also saving ludicrous amounts of money ($6.5 billion as of 2022).
The Wrap Up
Modern corporate kindness comes in the form of corporate social responsibility. This CSR is seen in many different forms, with the 4 main types being environmental, ethical, philanthropic, and economical. Each one of these responsibility types improves your company’s overall public image and brand. The benefits from properly implementing CSR in your company come in many forms, such as free positive advertisement and, in some cases, monetary savings. If you’re thinking about starting your own CSR program, taking a look at what your community needs is a great idea as it would make the most immediate impact.
