Home » All About Corporate Social Responsibility (CSR) | Meaning| Importance | Benefits | Types | Examples

All About Corporate Social Responsibility (CSR) | Meaning| Importance | Benefits | Types | Examples

Definitions of Corporate Social Responsibility

CSR or Corporate Social Responsibility) brings together all the practices put in place by companies in order to respect the principles of sustainable development, that is to say, to be economically viable, to have a Positive impact on society but also better respect the environment.

Official Definitions of CSR by the European Union

The European Union, in order to propose a framework for companies wishing to invest in sustainable development, published in 2001 a Green Paper on Corporate Social Responsibility. It defines CSR as “the voluntary integration of companies’ social and ecological concerns into their business activities and their relationships with their stakeholders. Being socially responsible means not only fully satisfying the applicable legal obligations, but also going beyond and investing “more” in human capital, the environment, and stakeholder relations “.

Definition of CSR according to ISO 26000

For its part, ISO (International Organization for Standardization), an organization responsible for defining international standards governing trade in companies, also addressed the definition of CSR in a document published by the Working Group on ISO 26000 standard on Corporate Social Responsibility. In these guidelines, ISO defines CSR as “the responsibility of an organization for the impacts of its decisions and activities on society and the environment, resulting in ethical behavior And transparency which – contributes to sustainable development, including the health and well-being of society – takes into account the expectations of stakeholders; – complies with applicable laws and is consistent with international standards of behavior; And which is integrated throughout the organization and implemented in its relations “.

The meaning of Corporate Social Responsibility?

Sometimes the term “corporate social responsibility” is used when talking about CSR. Etymologically, it is the word “social” which is correct and which corresponds to the definition of this word. However, more and more experts and institutions are using the term “societal” when talking about CSR, considering that the word “social” does not cover all dimensions of the definition of CSR ( Economic or environmental).

What is CSR: history and origin of corporate social responsibility

The idea that companies must do CSR, must be responsible, has its roots in the work of some American managers in the 1950s. Their idea? If companies no longer focus solely on their profits but also on the impact they have on society, they will benefit. For example, if a company pays its employees better, it helps to give them buying power, with which they may buy the company’s products. If a company better manages its environmental impact, it will save money in the long term by avoiding the need to manage natural disasters.

In 1953, Howard Bowen published a book entitled “The Social Responsibility of the Businessman” in which he explains why companies have an interest in being more accountable and give the first “recognized” definition of CSR.

With the development of environmental, but also social and economic concerns in the second half of the 20th century, corporate responsibility is becoming an increasingly important issue. More and more consumers are becoming critical of companies and want them to be more respectful of the laws, the environment and more generally responsible

Corporate Sustainability Development

Here I want to explain a short and simple definition of sustainable development to clear my reader’s concept:

Sustainable development is the idea that human societies must exist and meet their needs without compromising the ability of future generations to meet their own needs.

In concrete terms, this means that humanity must develop, taking into account economic aspects, but also respecting the environment and creating the conditions for a just and harmonious society. Unlike economic development, sustainable development is a development that takes into account three dimensions: economic, environmental and social.

The “official” definition of sustainable development was developed for the first time in the Bruntland report in 1987. This report was the synthesis of the first world commission on the environment and development of the United Nations.

The Benefits of Corporate Social Responsibility

The implementation of a CSR policy brings many advantages, depending on the size of the company. We have tried to bring the advantages of Corporate Social Responsibility into this article. Studies (American and Canadian) have tried to quantify and qualify these different benefits. Here is a report, as complete as possible.

CSR and its benefits

  • Best reputation of the company, best image,
  • Savings in the management of energy resources,
  • Better mobilization of staff, more invested,
  • Staff Welfare
  • More sources of innovation for the company,
  • Leverage for optimizing the supply chain,
  • Business advantage vis-a-vis competitors

Better management of industrial risks, accidents at work

Prevention is better than cure, right? By improving risk management, whether social, environmental, legal or economic, a company can improve its security and enhance its stability. Planning and managing risks is simpler with an integrated CSR approach. Basically, is not that what you ask a company?

Improved reputation

We are at the turning point of CSR. Not yet integrated into all companies, it enjoys a good image for any company that is interested. As a result, companies that perform well in CSR can build an excellent reputation. Pressure from the media, consumer associations, customers, raises the importance of CSR for companies that offer mass-market products. Even if a company does not do it in the retail market, having a good reputation in CSR will always be distinctive!

Facilitated recruitment with CSR

Do you tend to stay in a business where you feel good no? Similarly, a company that has a good reputation will be attractive. In a nutshell, engaging positively in a CSR policy will enhance the attractiveness of the company, and boost motivation internally. Always good to know that we work in a “desired” company.

Innovation at the heart of the company

There are many aspects of CSR. One of them includes standards and certificates, which it is always good to get. ISO 14001, ISO9001, SA8000 … all these standards become standards, which attest to the seriousness of a company. Better, getting a label or meeting a standard can bring new business. Indeed, some companies do not hesitate, in their tenders, to include in their specifications, criteria of compliance with the standards. CSR thus boosts innovation, the will to improve.

Identify and find new partners

Birds of a feather flock together? By embarking on a CSR approach, and by completing your environmental, economic and social approach, you will meet partners. “Heart” partners, who will share your values. Similar-minded companies can establish long-term business relationships that prove profitable.

Enhanced, useful monitoring

By opening a door to the outside, by informing you about CSR practices, and applying them, you are in a constant state of wakefulness. The company keeps abreast of developments and is in a better position to forecast changes.

– Purchasing: Increased access to resources, strengthening relationships with suppliers, collaboration pride.

– Business activities: Better access to capital, profitability, management control, improvement of customer relations (customer pride).

– Operations: Reduction of the social and environmental impact of activities, improvement of relations with local associations, a better understanding of the activities of your company.

– Marketing: Market developments (existing and new), reinforcement of the brand image, competitive advantage, closer proximity with customers which allows a better understanding of their new expectations.

– Institutions: Influence and recognition, better social investments and citizens, development of new communication networks, reputation.

– Management: better risk management, strategic development, organization, innovation.

– Human resources: Resourcing, health and safety management, human capital development, personnel safety, and pride.

Thus, it is clear that CSR accumulates various advantages which make it highly recommended.

Four Types of Corporate Social Responsibility

Behind corporate social responsibility, idea is that the business or companies have many responsibilities to continue. Business or companies can be organized these responsibilities in Pyramid.  As a business meets lower-level responsibilities that require it to shareholders and the law, it can take off to the upper-level responsibilities that benefit society.

Legal Responsibilities

To follows all laws is the most important responsibility of the Business, Law placed some requirement on business are called legal responsibilities of the Business. According to the model of corporate social responsibility. Legal responsibilities can range from securities regulations to environmental law, the law of labor, and even law of criminal.

Economic Responsibilities

Economic Responsibilities of Company is very important and it’s a main social responsibility of a business. A company needs to be mainly concerned with turnoff a profit. It is very clear fact that if a company or a business doesn’t make cash, it would not last, employees will lose jobs and the company would not even be able to think about taking care of its social responsibilities.

The company first needs to make sure that it can be profitable. Before It thinks about being a good corporate resident.

Ethical Responsibilities

Legal & Economic responsibilities are the two big duties of a business. After a company has chanced these basic requirements then a business can concern itself with ethical responsibilities. Ethical responsibilities are those responsibilities;

  • That a company puts on itself because its owners believe it’s the right thing to do — not because they have an obligation to do so.
  • Ethical responsibilities might contain;
  • being ecologically friendly,
  • Paying reasonable wages
  • refusing to do business with unfair countries,

Benevolent Responsibilities

If a company is fulfilling all of its other responsibilities, it can begin meeting Benevolent or philanthropic responsibilities. Philanthropic duties are those that go above and outside what is simply required or what the business believes is right.

They involve making an effort to benefit society — for example,

  • By donating services to community organizations,
  • work in projects to aid the environment
  • Donating money to charitable causes.

Importance of corporate social responsibility

Corporate social responsibility Examples:

Although many companies now practice some form of social responsibility, some are making it an essential of their operations.

Example: Ben and Jerry’s, uses only fair trade ingredients and had developed a sustainability program for dairy farms in its home state of Vermont.

Starbucks has created its C.A.F.E. Practice guidelines, which are designed to ensure the company sources sustainably developed and process coffee by evaluating the economic, social and environmental aspects of coffee production.

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About the author

Salman Qureshi

Salman Qureshi is an Accountant by profession & he loves to write on Commerce & Management Sciences Subject to assist Students. Hope you guys will like his effort.

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