Corporate social responsibility (CSR) is a broad term for a business model that promotes accountability for the overall social, economic, and environmental wellness of a corporation or organization. The idea of corporate responsibility is such that there are standards of operations that a company holds itself, their shareholders and their employees to.
Types of Corporate Responsibility
Although innately positive, CSR is a broad term and takes on a different meaning for different organizations, but for the most part, CSR is organized into the following list of categories (Khron):
1. Environmental Sustainability: What responsibilities is the company taking to ensure their operations support environmental sustainability?
Initiatives that an organization may have in this area include taking operational steps to reduce greenhouse gas emissions. For example, a beverage company may decide to use aluminum cans versus plastic because aluminum is more easily recycled and less likely to end up in a landfill. That’s an example of company’s standards specific to the creation of their product. An example of a company who implements Environmental standards to their operations may have solar panels installed and require that a certain amount of their power be run of solar energy.
2. Business Ethics: What responsibilities is the company taking to ensure their operations, products, and partners are all practicing business ethics?
No matter the size of a business or organization, ethical decisions have to be made. Most ethics decisions in business have to do with fair labor and hiring practices, but extends all the way to the ethics of the products they are sourcing for their business. For example, a T-shirt company purchasing fair trade certified materials clearly has made a statement that sourcing ethical ingredients is high on their values list.
3. Economic Responsibility: What responsibilities is the company taking to ensure they are making healthy, long-term economic decisions?
Every company must focus on their bottom line to stay ahead in business. Economic longevity while maintaining all other corporate social responsibilities will likely have its challenges, but companies with a well-rounded CSR initiative will ensure that they can achieve economic growth without sacrificing any of the other types of CSRs.
4. Philanthropic Efforts. What is the company doing to promote philanthropic efforts in their communities or in causes they believe in?
The action of spending money, time, or resources towards a local, national, or international cause shows an organization has positive philanthropic initiatives. Whether or not the cause is directly related to the company in some way or not, this is a great way for organizations to boost morale, while promoting service-minded employees and partners.
Why is Corporate Social Responsibility Important?
Companies with positive social responsibility initiatives not only attract positive publicity, but are also more likely to attract top talent, achieve higher customer satisfaction, and have an impact on the communities they are based in (Murphy).
This supports the idea that there is actual financial and economical benefit to a company that implements these practices, as it shows benefits ranging from employee retention to improved sales.
Examples of Corporate Responsibility:
Starbucks has been known for having a great sense of corporate social responsibility, and commitment to giving back to the communities that source their coffee from.
- 99% of their coffee is ethically sourced
- Starbucks offers college tuition programs for its employees
- Starbucks has initiated a program to higher more refugees
2. Tesla, Inc.
Elon Musk at Telsa has integrated corporate social responsibility into the nature of his product and idea through innovation in electric cars, and other forms of technology that promote sustainability.
3. Coca-Cola Company
Coca-Cola started a 5by20 initiative, a program that aims to empower women globally. CSR initiatives at larger companies like this can be a good model for newer or younger companies.