What is ‘Corporate Social Responsibility’
Corporate social responsibility, often abbreviated “CSR,” is a corporation’s initiatives to assess and take responsibility for the company’s effects on environmental and social wellbeing. The term generally applies to efforts that go beyond what may be required by regulators or environmental protection groups.
CSR may also be referred to as “corporate citizenship” and can involve incurring short-term costs that do not provide an immediate financial benefit to the company, but instead promote positive social and environmental change.
Different types of CSR
· Environmental CSR: focuses on eco-issues such as climate change.
· Community based CSR: businesses work with other organizations to improve the quality of life of the people in the local community.
· HR based CSR: projects that improve the wellbeing of the staff.
· Philanthropy: businesses donate money to a good cause, usually through a charity partner.
Advantages of Corporate Social Responsibility
In today’s digital, fast speed world, each business, small or big, needs to have a CSR program in place. If CSR is not yet part of the daily business practice the business loses the trust of the people who are important to the business.
So why CSR?
1. Satisfied employees.
Employees want to feel proud of the organization they work for. An employee with a positive attitude towards the company, is less likely to look for a job elsewhere. It is also likely that the company will receive more job applications because people want to work in a company with good CSR.
More choice means a better workforce. Because of the high positive impact of CSR on employee wellbeing and motivation, the role of HR in managing CSR projects is significant.
2. Satisfied customers
Research shows that a strong record of CSR improves customers’ attitude towards the company. If a customer likes the company, he or she will buy more products or services and will be less willing to change to another brand.
Relevant research:
· IBM study ‘Attaining Sustainable Growth through Corporate Social Responsibility’: The majority of business executives believes that CSR activities are giving their firms competitive advantage, primarily due to favorable responses from consumers.
· Better Business Journey, UK Small Business Consortium: “88% of consumers said they were more likely to buy from a company that supports and engages in activities to improve society.”
3. Positive PR
CSR provides the opportunity to share positive stories online and through traditional media. Companies no longer have to waste money on expensive advertising campaigns. Instead they generate free publicity and benefit from worth of mouth marketing.
4. Costs reductions
A CSR program doesn’t have to cost money. On the contrary, if conducted properly a company can reduce costs through CSR.
Companies reduce costs by:
· More efficient staff hire and retention
· Implementing energy savings programs
· Managing potential risks and liabilities more effectively
· Less investment in traditional advertising
5. More business opportunities
A CSR program requires an open, outside oriented approach. The business must be in a constant dialogue with customers, suppliers and other parties that affect the organization. Because of continuous interaction with other parties, the business will be the first to know about new business opportunities.
6. Long term future for business
CSR is not something for the short term. It’s all about achieving long term results and business continuity. Large businesses refer to: “shaping a more sustainable society” (Vodafone 2010 report):
“ Deliver a sustainable society in which business and its stakeholders can prosper in the long term”
A social responsibility policy that a new company may want to implement:
Voluntary Hazard Elimination:
Companies involved with social responsibility often take action to voluntarily eliminate production practices that could cause harm for the public, regardless of whether they are required by law. For example, a business could institute a hazard control program that includes steps to protect the public from exposure to hazardous substances through education and awareness. A plant that uses chemicals could implement a safety inspection checklist to guide staff in best practices when handling potentially dangerous substances and materials. A business that makes excessive noise and vibration could analyze the effects its work has on the environment by surveying local residents. The information received could be used to adjust activities and develop soundproofing to lessen public exposure to noise pollution.
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