Corporate Social Responsibility
Corporate social responsibility (CSR) is how companies show their responsibility towards the environment (social and ecological) and society. CSR in the form of planet and/or people and/or revenue attracts prospective customers and employees towards these companies. Some of the important CSR issues are eco-efficiency, stakeholder engagement, environmental management, social equity, human rights, anti-corruption practices, employee and community relations, gender balance, good governance, responsible sourcing, and labor standards and working conditions.
Given below are three key kinds of social responsibility adopted by businesses:
- Environment – This is one of the key areas of CSR focus. Businesses, irrespective of size, have a considerable carbon footprint. When they take steps with respect to reducing the footprint, they benefit their company as well as society as a whole. Two examples are: (1) controlling pollution and (2) creating clean energy solutions.
- Ethical labor measures – Ethical and fair treatment of employees is another kind of corporate social responsibility, particularly in the case of businesses functioning in international locations and with labor laws different from those imposed in the United States. Consumers won’t be happy if they find that a particular company operates sweatshops or infringes other ethical labor practices.
- Philanthropy – This social responsibility has to do with donating to local and global charities. Businesses have plenty in terms of resources – time, money or other resources which can do good for local community programs and charities.
A well-executed CSR model can produce a range of competitive advantages including a boost in profits and sales, operational cost savings, a productive human resource basis, increased customer loyalty, better brand image, reputation and risk management; improved access to markets and capital, better decision making and enhanced quality and productivity.
“Corporate social responsibility” became a popular term in the 1960s and continues to be used arbitrarily by many to cover moral and legal responsibility of a more narrow interpretation.