CSR: Corporate Social Responsibility
Corporate Social Responsibility, or CSR, is a collection of business policies and practices that assist businesses in becoming more environmentally friendly, socially aware, and tightly integrated with their local communities. There are four broad ways for businesses to become better corporate citizens.
Environmental Stewardship (ES)
Supporting the environment is one of the most common forms of corporate social responsibility, and some companies call it environmental stewardship. ES aims to reduce pollution, greenhouse gas emissions, and promote using natural resources sustainably.
There are many ways to embrace environmental stewardship, including but not limited to the following:
- Reduce pollution, greenhouse gas emissions, single-use plastics, water consumption, and general waste
- Identify wasteful products and activities and eliminate same from your workflow to improve your bottom line
- Replace toxic cleaning products and other industrial chemicals with greener alternatives
- Increase reliance on renewable energy, sustainable resources, and partially- or fully-recycled materials
- Offset negative environmental impact: plant trees, fund research, and donate to related causes
- Let vendors know that their environmental policies factor into your purchasing decisions; multiply your influence
Philanthropic Corporate Social Responsibility
Philanthropic responsibility refers to a business’ active efforts to improve society and the world. A company dedicates a portion of corporate earnings and its employees’ time to charities and nonprofits that align with its values. Some companies choose to create a branded charitable trust or nonprofit.
Philanthropic programs don’t have to be on a grand scale. Even small companies can make an impact with philanthropic work:
- A local car wash might offer their facilities to host fundraisers for bands and sports teams
- Any business can sponsor a scouting troop or youth activity hall
- Restaurants and bars may host fundraising nights with proceeds benefiting a local school or charity
Supporting or sponsoring such causes keeps your business name top of mind and shows that your business is actively engaged in your community.
Human Rights Corporate Social Responsibility
Also referred to as ethical responsibility, organizations that embrace human rights social responsibility want to achieve fair treatment of all stakeholders, including investors, employees, suppliers, and customers. American labor laws offer workers broad protection from unfair business practices by unions and employers. To augment these protections, an ethically responsible company seeks to address and solve problems such as salary gaps and systemic discrimination.
Your firm can implement ethical responsibility in different ways. Adopting these approaches is beneficial for your corporate image and helps build a positive company culture with positive morale and higher productivity.
- Set your own, higher, “minimum” wage if the wage mandated by the state or federal government doesn’t provide a livable wage in your area
- Review your diversity policies and processes. Address complaints and violations promptly, fairly, and completely
- Vet your suppliers to ensure that you are not buying conflict goods or products manufactured, mined, or harvested using labor sourced from children or enslaved persons
- Require that your suppliers source products, ingredients, materials, or components according to free trade standard
Economic Corporate Social Responsibility
Economic responsibility combines and balances philanthropic, environmental, and ethical business practices with the company’s cash flow and profits. It ensures that a business’ financial decisions are based not only on maximizing profit but also on its other CSR policies. It means putting “your money where your mouth is.”
- Establish processes to review financial decisions against the company’s CSR policies
- Look for ways to channel your philanthropic donations to help your employees and your community (for example, volunteer time off)
- Establish preferred vendor lists to promote use of vendors whose values align with yours. Similarly, work to establish close relationships with aligned customers
- Ensure that purchases and investments advance all your social and economic goals