Corporate Social Responsibility (CSR) is an organisation’s approach to business sustainability that looks beyond the bottom line and focuses on its economic, social and environmental impact.
Although not a legal requirement, CSR is now considered to be a moral obligation and an integral part of how organisations operate.
Not only will embracing CSR have multiple benefits for the organisation, but it will also provide opportunities for the wider community. It’s not just about ticking boxes and it isn’t only practised by larger corporate firms. Smaller organisations are now also placing more emphasis on CSR to benefit their local communities.
In this article, we look at the 4 different types of CSR and why organisations might adopt them.
Environmental Responsibility
Environmental responsibility focuses on minimising the negative impact on the environment by taking actions to promote sustainability. For example, reducing carbon emissions, recycling, reducing waste, using renewable energy sources, and donating to associated causes. Every individual has a responsibility to minimise their environmental impact and as a result, environmental responsibility is becoming increasingly important for customers who look to work with organisations who promote sustainability in their operations.
Ethical Responsibility
Ethical responsibility means ensuring the organisation operates fairly with integrity and transparency, providing equal opportunities for all. This includes treating employees, suppliers, and third-party contractors fairly, regardless of age, race, culture, or sexual orientation. Other practices include providing a safe, working environment, offering competitive pay and benefits, and ensuring materials and products are ethically sourced. Being accountable for the organisation’s ethical responsibility will help mitigate legal, reputational, and operational risks.
Philanthropic Responsibility
Philanthropic responsibility refers to how an organisation contributes to society to actively make the world a better place. Philanthropy involves ‘giving back’ and supporting the local community through activities such as volunteering and sponsorship. Donations of company profit to environmental, health or social causes is another example of philanthropic behaviour. Organisations involved with charities are more likely to engage employees in their activities, creating further awareness within the local community. Philanthropic behaviour makes a positive impact in the local community – connecting individuals and organisations to help build stronger communities, provide better opportunities, and improve life’s misfortunes.
Economic Responsibility
Economic responsibility encompasses environmental, ethical, and philanthropic responsibilities. It refers to an organisation’s obligation to conduct its business whilst remaining profitable and financially transparent in a way that will positively impact the environment, people, and society. Examples of economic responsibility include maximising income, keeping minimum costs, investment in long term business growth, managing financial risks, creating jobs within the community, sourcing sustainable products and local services.
Benefits of CSR to business
As well as the social benefits to the wider community, there are multiple benefits to organisations who adopt a CSR programme including:
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- Brand awareness and company reputation – Giving back to the community increases brand awareness and builds company reputation. Customers are more likely to buy from organisations known to positively impact their communities.
- Employee engagement – Organisations who encourage volunteering opportunities generate commitment and pride among employees resulting in increased employee engagement and satisfaction, building stronger teams and improving staff morale.
- Customer loyalty – Customers are often willing to pay a premium for a product if they know they are buying from brands focused on ethical practices. Demonstrating your organisation’s commitment to society provides opportunities to reach customers with similar principles.
- Increased revenue – According to research, organisations who invest in CSR and sustainable initiatives generate more revenue than those who don’t. Promoting positive values leads to increased customer traffic and ultimately profit growth.
- Talent acquisition and retention – Younger adults in particular are interested in working for a socially responsible organisation, with prospective candidates researching an organisation’s CSR efforts before deciding whether to apply for a role.
EML strive to make a positive impact in the local community – connecting individuals, companies and organisations to help build stronger communities and improve life’s misfortunes. As part of our Corporate Social Responsibility programme, we endeavour to make a concerted effort to foster community engagement and actively support a number of charities such as Blessing in Disguise and Joseph’s Goal. We are also sponsors of a local youth football team and are proud to support our team in their varied volunteering roles within their own communities.
If you require support with any HR, Employment Law or Health, Safety & Wellbeing issues, please call 01942 727 200 or email enquiries@employeemanagement.co.uk for a no obligation chat with a member of the team.