Corporate social responsibility, or CSR, is how a business or other corporate body takes responsibility for its effects on environmental and social well-being. CSR goes beyond what is required by governmental regulations and takes additional steps toward good corporate citizenship. It can “involve incurring short-term costs that do not provide an immediate financial benefit to the company, but instead promote positive social and environmental change,” according to Investopedia.
At its core, CSR is about the methods a company uses to make money, rather than whether a business donates to charity. Companies with a commitment to CSR view their global impact as an important element of their business structure and aim to have a positive impact on society, which might include employees, customers and the environment.
More and more businesses are choosing to balance the pursuit of profit with prioritizing ethical practices. “The same money and influence that enable large companies to inflict damage on people and the environment allows them to effect positive change,” Investopedia explains. In fact, some companies advocate a “triple bottom line:” people, planet and profit, according to The Economist.
The following are just a few examples of how companies can implement CSR:
- Regularly providing employee compensation and benefits at a fair rate
- Using ethically sourced materials
- Providing consumers with honest and clear ingredients labels
- Hiring disadvantaged youth, the formerly incarcerated or the homeless
- Investing in local communities
- Building schools or health care facilities
- Investing in research and developing sustainable technologies
3 Major Types of Corporate Social Responsibility
- Socioeconomic: When companies treat their employees fairly and ethically, they demonstrate CSR. This can include compensation that keeps pace with the cost of living, benefits like insurance and free parking, and a culture that promotes a good work-life balance. Other socioeconomic examples of CSR include offering overtime pay and vacation time. At the same time, companies have an economic responsibility to be profitable in order to pay wages and create new jobs.
- Environmental: Businesses can practice CSR through ethical environmental practices. They should take steps to reduce their carbon footprint and minimize waste. “Any steps they can take to reduce those footprints are considered both good for the company and society as a whole,” Business News Daily explains. Even small businesses can make use of sustainable business practices by using renewable energy, prioritizing energy efficiency and conserving water, the U.S. Small Business Administration notes.
- Community: Organizations can practice social responsibility by volunteering and supporting programs that benefit the community. One example is West Virginia State University’s annual Cares Day. On this day, the university’s students, faculty, staff, alumni and friends travel throughout the local community and complete community service projects — ranging from sorting donations of clothes at Mountain Mission to painting and cleaning community centers. You can learn more about WVSU Cares Day here.
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CSR and the Consumer
Though CSR is important, from an ethical perspective, more and more consumers are prioritizing brands that operate responsibly. They hold companies to a higher standard; in fact, Business News Daily reports that a recent study found that nine in 10 consumers “expect companies to not only make a profit, but also operate responsibly to address social and environmental issues.” A 2014 study by Nielsen also found that 55 percent of global online consumers across 60 countries are willing to pay more for products and services provided by companies that are committed to positive social and environmental impact.
“Consumers around the world are saying loud and clear that a brand’s social purpose is among the factors that influence purchase decisions,” Nielsen’s Amy Fenton explains. “This behavior is on the rise and it provides opportunities for meaningful impact in our communities, in addition to helping to grow share for brands.” When businesses understand that consumers prioritize brands with high levels of CSR, they can create shared value by launching initiatives that both appeal to socially conscious customers and make a difference.
Business Education at West Virginia State University
Ethical business practices start with a comprehensive education that prioritizes ethical management. WVSU offers an online Bachelor of Science in Business Administration in Management that prepares students to lead in organizations of all types. The curriculum explores key business topics like accounting, finance, marketing and information systems. This program, which is accredited by the Accreditation Council for Business Schools & Programs, gives graduates the knowledge and management skills they need to thrive in the workplace.