Until fairly recently, most large businesses were driven almost exclusively with a single goal in mind: profit. Maximizing profits was at the heart of every action taken or initiative pursued. However, as celebrity Carrie Underwood claims: “Successful people have a social responsibility to make the world a better place and not just take from it”, and this is true especially when it comes to business. Indeed, building an impactful and lasting business goes beyond the product or service a company can offer to customers. It starts from the core values and beliefs on which you found your business, and it goes to how the company achieves what we know nowadays as Corporate Social Responsibility, a concept that is more and more ubiquitous, constituting a good part of the company’s brand, particularly because consumers now, more than ever, consider the responsibility of the businesses they patronize. So much so that if a company lacks this orientation, it runs the risk of failure. CSR has thus evolved from being ‘charity of choice’ to being a matter of survival of a business. Therefore, in the past few decades, more business leaders have recognized that they have a responsibility to do more than simply maximize profits for shareholders and executives. Rather, they have a social responsibility to do what’s best not just for their companies, but people, the planet, and society at large.
Before diving into CSR’s specifics and technicalities, it will be wise to clearly define
and demystify it. In fact, Corporate Social Responsibility is a management concept
whereby companies integrate social and environmental concerns in their business
operations and interactions with their stakeholders. It is understood as being the
way through which a company achieves a balance of economic, environmental and
social imperatives known as the Triple-Bottom-Line, while at the same time
addressing the expectations of shareholders and stakeholders. Triple-Bottom-Line
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. CSR is a
self-regulating business practice that measures the impact of an organization’s
activities on society and the environment. Firms that embrace corporate social
responsibility are typically organized in a manner that empowers them to be and act
in a socially responsible way. This is why it is important, in this sense, to draw a
distinction between CSR, and charity, sponsorships or philanthropy. Even though the
latter can also make a valuable contribution to poverty reduction, will directly
enhance the reputation of a company and strengthen its brand, the concept of CSR
clearly goes beyond that.
Corporate social responsibility is a broad concept that can take many forms
depending on the company and industry. Through CSR programs, philanthropy, and
volunteer efforts, businesses can benefit society while boosting their brands. As
important as CSR is for the community, it is equally valuable for a company. CSR
activities can help forge a stronger bond between employees and corporations, boost
morale, and help both employees and employers feel more connected with the world
around them. For a company to be socially responsible, it first needs to be
accountable to itself and its shareholders. Often, companies that adopt CSR
programs have grown their business to the point where they can give back to society.
Thus, CSR is typically a strategy that’s implemented by large corporations. After
all, the more visible and successful a corporation is, the more responsibility it has to
set standards of ethical behavior for its peers, competition, and industry.
Many companies view CSR as an integral part of their brand image, believing that
customers will be more likely to do business with brands that they perceive to be
more ethical. In this sense, CSR activities can be an important component of
corporate public relations. At the same time, some company founders are also
motivated to engage in CSR due to their personal convictions. The movement toward
CSR has had an impact in several domains. For example, many companies have taken
steps to improve the environmental sustainability of their operations, through
measures such as installing renewable energy sources or purchasing carbon offsets.
In managing supply chains, efforts have also been taken to eliminate reliance on
unethical labor practices, such as child labor and slavery. This reflection can often
lead to innovative and groundbreaking solutions that help a company act in a more
socially responsible way and increase profits. Reconceptualizing 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. Although CSR programs have generally been most common among large
corporations, small businesses also participate in CSR through smaller-scale
programs such as donating to local charities and sponsoring local events. Moreover,
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.