Corporate Social Responsibility
Table of Contents
Watch the world’s largest HR encyclopedia be built in real-time
Subscribe to get a weekly roundup email of all our new entries
What Is Corporate Social Responsibility?
Corporate Social Responsibility (CSR) refers to the obligations an organization has to the communities it touches. These obligations may be managing the perceptions of those communities or they may be the obligations the organization takes upon themselves to better the community. Ideally those are the same. In some organizations, these obligations may not be as robust as others, perhaps focusing on environmental impact but not philanthropic activities for example.
Types of Corporate Social Responsibility
CSR comes in many flavors depending on what is important to your company and aligns with its values and products/services, what is important to your employees and what is important to the communities in which your company operates and your employees live. Note that these categories for social responsibility — environmental, social and economic — are fluid. CSR activities often will encompass more than one category.
Being a good (or at least better) steward of the earth for generations to come is important to many organizations. Better stewarding could entail recycling or carbon footprint reduction. If your company isn’t deeply involved in this yet, start simple with a basic recycling program for copy paper, plastic bottles and aluminum cans. Celebrating Earth Day with your co-workers is another great way to get started. Start ordering primarily recycled office products and try to buy local to decrease carbon footprint. Once your company has a baseline of environmental consciousness established, there are limitless ways to go deep, from taking steps to encourage public transportation and biking to work to getting a LEED certification for your building. Supporting a community garden or installing solar panels on the roof might be options as well.
Some organizations will shy away from this category while others lean in. Social responsibility can be as simple as a technical organization having their employees serve as science fair judges. Other organizations are actively promoting movements like Black Lives Matter, which could be a divisive topic among your employees, customers, investors or community. Many companies are promoting businesses or products available through them that are minority-owned, women-owned, veteran-owned, etc. to help drive more business to those entities.
Whatever you choose, make sure it is relevant to your products or services. Consider Dove’s self esteem campaign as an example of relevance. They make beauty products and they have recognized that media images impact the way people feel about themselves so they address this.
Helping to make sure your local communities have what they need can benefit your company in the long run too. Imagine your company is based out of an area where children often go hungry. Those children are shown to underperform at school. That means when they graduate high school (assuming they don’t drop out), you potentially have fewer excellent workers in the talent pool.
Likewise, digging wells for clean water and roads can help the business by having workers with fewer health issues and a better way to transport materials and people, but it also helps everyone in the community, not just employees or the company. Consider how much more a productive and loyal employee you could be if suddenly the basic needs for your family were met. Don’t make the mistake of thinking social actions like this only apply to companies with an international footprint. Flint, Michigan is an example of how basic needs can easily occur within the U.S. too. Also, companies like HEB (a grocery store in Texas) and Tide have premade emergency response plans and teams that go into effect when natural disasters like major hurricanes come along.
Organizations have an influence on their local economy, and this element of CSR respects that potential and makes the best use of it. In the Natural Resources industries, there is a term used to refer to all the benefits that a natural resource extraction project would bring to the economy: Local Content. An example of this is a company that wants to open a business branch in an underdeveloped country. There is more to consider than employee wages. If the company hires local workers who are not necessarily skilled or educated for the roles and trains them to do the work, then there is that additional benefit to the economy because those skilled workers take those skills with them as they promote in the company, go to work for other companies and teach others during or after an extraction project is completed.
One area that larger companies may address both socially and economically is child labor. In some countries, child labor is not only acceptable to society and corporations, but it may be a necessary addition to household income to meet basic needs. One action step for companies is to simply refuse to employ children in hazardous work even if it is legal in that country. But the next step would be to take action that ensures children have access to education and their families have access to basic needs. This can be done by partnering with charitable organizations, offering scholarships and more.
The most basic element of corporate social responsibility is to simply not take advantage of people when your organization has the ability to wield power and influence. Companies exemplify this approach when they declare their own minimum wage that is much higher than the federal minimum wage for no reason except that paying a living wage is the right thing to do. That, and the positive press and employee retention, of course.
Why Your Company Should Consider Starting a CSR Program
There are so many good reasons to invest in CSR. Here are a few to help you write your business case.
- Ethical. Doing the right thing is a simplification of course, but many decisions to invest in CSR are considered an ethical decision by some organizations. CSR might be better described to some organizations as public actions that closely align with the organization’s values. 2017 research from Cone Communications states that 63% of Americans are hopeful businesses will drive social and environmental change moving forward with the expectation that the government will not provide regulation.
- Employee Engagement. These CSR activities make employees proud to work at your company. They are more engaged and productive, more likely to stay and more likely to recommend your company as a great place to work.
- The Social Contract. The social contract is the idea that the government, employers and employees all play a part in a system of mutual benefit and mutual responsibilities. No one party can just take, each party has to give and take. Employers give wages and benefits to employees who give their labor to the company. Both give taxes to the government who then gives services back to both. People have been talking for some time about a new social contract that would change things like the increasing financial inequity in the U.S. Your CSR activities have the power to drive real change in and benefits for the communities that you affect.
- Operational Efficiencies. It is possible that as your organization works on CSR initiatives, they may find synergies with other business processes, best practices to import or other ways that reduce operational costs. Volunteering is one way employees can develop new skills too.
- Brand Recognition and Loyalty. Brand strength is a big consideration for implementing a CSR program. When you do this good work, you get to brag about it, and the benefits come back as people recognizing your brand more easily, improved customer loyalty and getting closer to being an employer of choice. According to a 2017 Cone Communications research study, 87% of Americans opt for products from companies that support causes they feel are important. Alternatively, 76% will boycott companies or products for supporting causes they do not agree with.
The Importance of Authenticity
Your employees and their communities will judge your actions. If you actively pursue a CSR agenda, will your employees and communities see that your company wants to give and share in the wealth and power the organization can offer, or will it be seen as self-serving? Exaggerating environmental claims or marketing an activity as “sustainable” or otherwise good for the environment when it is primarily just good for the bottom line is known as “greenwashing.” A classic example of greenwashing is changing a product to have a green label and indicating it is “natural” because some ingredients are natural when, in reality, nothing substantial changed about the product formulation. Typically in these cases the price goes up as well, further compounding the accusation of greenwashing.
Whether it is greenwashing or just tonedeaf marketing, and whether it is environmental, social or otherwise, make sure your CSR activities are transparent and truly in the spirit of giving. Failure to be authentic can result in viral tweets and lawsuits just to name a few undesirable reactions from industry watchdogs, customers, partners, communities and employees. 2017 research from Cone Communications indicates that 65% of Americans will research to understand if a company’s CSR is authentic or not. Millennials come in at 76%. A lack of transparency and/or being perceived as a “taker” boils down to the idea that the company has misled, manipulated and lied to everyone about their involvement in causes for the sake of greater profits. This kind of accusation is difficult to overcome as consumers are increasingly interested in the CSR of companies, particularly Millennials.
How To Make CSR a Part of Your Organization
The exact nature of your CSR plan may be dependent on how your company choses to get involved. Making cash donations to charities or running a food drive are easy ways to get started, but more ambitious programs will require involvement from employees and leadership.
Step 1: Get Buy-In
Get leadership buy-in. There will be expenses, so start with a business case that justifies the expected expenditures complete with estimated timelines of expenditures. If possible, identify what return on investment (ROI) might look like, remembering of course that direct profit is not the goal. This could take some persuasion.
Step 2: Solicit Ideas
Ask the employees for ideas. Grassroots is a great way to start this kind of activity. You may have employees that are already taking things on themselves (like taking home used copy paper for recycling) or that already volunteer with worthy causes that may align with your company’s values and goals.
Step 3: Partner
Find worthy nonprofit partners, either through the United Way, the MS150 race or a local organization that cleans up the beaches in your town or protects a local species that doesn’t exist in other places. Local options can be powerful. Again, it is critical that the partnering nonprofit has shared values and vision with your organization.
Step 4: Communicate
Start documenting. Be able to tell candidates what you are accomplishing. Post it on your website or social media. Begin preparing CSR reports for your company (not everyone does this annually).
Examples of Companies With Great CSR Programs
These are just a few examples of companies with great CSR programs to inspire you:
Target’s CSR website is easy to find and demonstrates the areas they are most invested in: Social equity and environmental causes.
Radiohead is a band, but they are also a brand. They joined up with an organization called Best Foot Forward to measure the carbon footprint of their 2003 and 2006 tour. The study included ways to mitigate the impact in future performances as well.
Adobe hits all the elements of social, environment and economic impact in their program. They have a resource guide for nonprofits that wish to partner with them too.
Ben & Jerry’s
Table of Contents
Questions You’ve Asked Us About Corporate Social Responsibility
Angela Livingston, SHRM-CP, MBA has nearly a decade of HR experience in high regulated, high tech companies that are Federal Contractors and supported people in other states. She’s worked for an international company with ~20K US employees that did a lot of immigration work, and she’s worked for a company with ~3500 US employees that doesn’t support work visas. One constant is that she’s always working with people empathetically with an eye on integrity.
Want to contribute to our HR Encyclopedia?
Other Related Terms
Posts You Might Like
People management software sounds important, but what exactly does that mean? Does your business need it? What businesses benefit most? All these questions and more are answered as we dive into the fascinating world of people management software and determine what’s best for your company.
It’s no secret that people are complicated. No two people are alike and everyone has their own unique preferences. These differences can make people management challenging. However, when you learn to R.E.A.D. people, you’ll immediately become a better manager and you’ll earn the trust of your team.
When it comes to running a small business, we know that managing employees is often one of the most difficult tasks. People are complicated, and finding a way to keep your employees happy and productive can be challenging. This article shares specific advice for what you can do in the three phases of the employee lifecycle to get the most out of each employee.