Glossary of Human Resources Management and Employee Benefit Terms
Corporate social responsibility (CSR) is a business model that helps a company remain socially accountable to itself, its community, and its stakeholders.
This business model strives to leave a positive impact on the world, whether for the sake of society, the economy, or the environment. To practice corporate social responsibility, companies may reorganize their operations.
The purpose of corporate social responsibility is to hold companies accountable for their actions that affect both the world and society as a whole. A company may actively seek positive change or change business practices to reduce any repercussions the organizations previously experienced.
In the past, a corporation’s only social responsibility was to increase profits and help the economy. Companies with this mindset never accounted for the larger impact they may have had. CSR programs help these companies become aware of their effect on society. From there, they can make a plan to ensure their impact is beneficial.
CSR programs also improve your company’s reputation in the public eye. If the community thinks highly of your company and the good you bring, they are more inclined to frequent your business. And as corporate social responsibility becomes more prevalent and customers heighten their expectations, accountability will help your organization survive.
Stakeholders and potential employees will also look to see how your organization is upholding CSR principles when choosing to invest or apply.
CSR programs can produce both small and large social impacts—their only requirement is to incite positive change in the community. Some examples of CSR include:
Rewarding employees for volunteering in the community
Committing to ensure diversity in the workplace
Providing specialized job training for underrepresented groups
Direct-giving to non-profit organizations
Emphasizing the use of renewable energy sources
Improving labor policies and fair wages
Investing in socially and environmentally conscious causes
Many notable companies are making strides to implement CSR policies. For example, the LEGO Group is working to phase out single-use plastics in their boxes by 2025. They are also working to launch activities that promote learning through play to over eight million children each year.
The organization that wants to make a positive change in the community must prioritize its corporate social responsibility. This involves setting their CSR policies and receiving support from upper management, particularly the CEO, to properly implement their programs.
Other entities, such as governments and the general public, also hold some responsibility toward corporate social responsibility.
Governments and other regulating officials will put certain laws in place to keep organizations from practicing unethical tactics. For example, truth in advertising laws allow the Federal Trade Commission to sanction companies who try to scam or defraud their customers with misleading information.
Environmental and public health concerns are also regulated by government bodies. The Environmental Protection Agency has laws that ensure businesses keep their water and air pollution levels to a minimum. They will also sanction companies that expose patrons to substances like waste, lead, and mold.
The general populace may not place sanctions for unethical practices, but they can raise awareness and inspire social change within organizations. Throughout history, various groups have protested when they felt an organization no longer upheld ethical business practices.
Sometimes, these public-led awareness campaigns inspire change within a company. In 2020, Nordstrom announced it would ban products made of exotic skins and real fur from their stores by the end of 2021. This came after listening to the feedback they received from customers.