What is CSR?

Corporate social responsibility, or CSR, is a business concept that states companies should balance the triple bottom line that determines their contribution to sustainability — people, planet, and profit. Organisations have the responsibility to work for the greater good of these three areas, by positively practicing and investing in environmentally and socially conscious initiatives to the community they belong to. 

What are the types of CSR?

• Environmental: The most recognised of the CSR types, this applies to the company’s responsibility to positively impact the environment and its natural resources. This is also represented in the three pillars of ESG (environmental, social, and governance) that call for companies to perform sustainably and ethically. This can be done through the 6 Rs of sustainability which includes transitioning to renewable sources and practices and reducing water and energy consumption.
• Economic: This is the positive effects on the economic growth of the company, its community, and other businesses. This can be through locally sourcing its materials and services and prioritising initiatives that favour community development. Companies can allocate resources and invest in sustainable developments within and outside the company, such as renewable energy and more efficient and low-energy technology and solutions.
• Ethical: Companies are responsible for stakeholders, products and services, and operations, and are to make sure of overall welfare and accountability. This can be seen in how a company takes care of its employees and its ethical labour practices. Companies can also exercise ethical responsibility in their material sources, production process, and overall operations.
• Philanthropic: The goal is to impact positive growth to society through charitable activities and meaningful contributions. Companies can organise or encourage volunteering programs with their stakeholders. They can also donate or establish their own foundation to advocate for something that falls in line with their company principles or mission.

What are the  benefits of CSR?

A company focusing on corporate social responsibility entirely shifts how it operates and this can lead to a substantial improvement in a company’s credibility, engagement, and finances. Rethinking current processes and shifting to sustainable practices and technology can save on cost and time as it pushes for the responsible use and consumption of resources throughout the production cycle and operations. Here are key factors that benefit the company:

• Cost savings and operational efficiency: Adopting CSR practices, such as reducing waste and energy consumption, leads to significant cost savings. Sustainable initiatives not only reduce environmental footprint but also lower operational expenses, benefiting a company’s bottom line while improving its public image.
• Increased brand recognition and loyalty: CSR can significantly boost brand visibility and reputation. When aligning with social causes, companies attract positive media attention and connect with possible customers or stakeholders who value ethical practices that also benefit them. This leads to stronger brand recognition and customer trust, which sets companies apart from their competitors. Moving a step further, consumers are more loyal to brands that they recognise share their values. CSR initiatives create a deeper connection with customers and encourage repeat or continued business.
• Increased investment and access to capital: Investors are increasingly prioritising companies with strong CSR initiatives. Businesses committed to sustainability and ethical practices often see greater access to capital, as investors favor companies with responsible policies. This can lead to improved financial performance and long-term growth.
• Improved Employee Engagement and Retention: CSR programs foster a sense of purpose and fulfilment among employees, leading to higher engagement. Engaged employees are more loyal and productive when it comes to innovating and contributing to solutions and overall performance. Additionally, a focus on CSR helps attract and retain top talents, as workers, especially younger generations, look for employers with strong social responsibility values.