Corporate Social Responsibility — Everything You Should Know

Corporate social responsibility (CSR) is getting attention from a lot of businesses nowadays. But why? 

This article will discuss to you what corporate social responsibility is. We will tell you the importance and types of corporate social responsibility. Additionally, we will show you some benefits and examples of corporate social responsibility. 

Once you are done reading this article, you will have in-depth knowledge about corporate social responsibility. Thus, it will allow you to adopt it within your business to improve your impact on society. 

DefiningCorporate Social Responsibility

You may hear a lot of people in the business industry talking about corporate social responsibility. But what is it? 

Corporate social responsibility (CSR) is the continuing commitment by businesses to behave ethically and contribute to the development of the economy all while enhancing the quality of life of its workforce and their families as well as the surrounding community. 

It is a type of business self-regulation aiming for social responsibility and making a difference in the world. There are many ways a company can embrace CSR. It includes being eco-friendly and eco-conscious, promoting diversity and equality, giving back to the community, and ensuring that all business decisions are ethical. Thus, why sustainable procurement is brought up whenever businesses talk about corporate social responsibility.  

Proper execution of the CSR concept may bring a lot of competitive advantages such as improved access to capital and markets, increased profits, improved brand reputation, gaining more loyal customers, better decision-making, and risk management processes. 

In ensuring the authenticity of the CSR, the company should first look at its values, mission, and core issues to determine what initiatives align with the goals and culture of the company. The Company may do this internally on its own or hire a third party to conduct an assessment. 

The Significanceof CSR

The importance of CSR is increasing through the years as the brand’s image can affect its profitability. Consumers, employees, and stakeholders prioritize CSR when choosing a brand or company. Additionally, they hold corporations to be responsible for affecting social change with their practices and beliefs. 

Employees who share the same value with the company and can relate to its CSR initiatives are more likely to say. According to a study made by Deloitte, purpose-driven companies retain their talents up to 40% more than their competitors. 

Furthermore, demonstrating developed CSR initiatives and programs can make your company appealing to current and future investors. A report by CECP has found that investors play a huge role as key stakeholders in corporate social responsibility. 

The Three Pillars of CSR

1. Profit Pillar

Profit is what makes a business continue its operation. Thus, its importance cannot be understated. The profit may be financial or some other form of value which depends upon the nature and goal of the organization. 

The profit pillar can be divided into three areas: Sales, Service, and Strategy. 

The first area of the profit pillar is Sales which needs a steady flow of demand to ensure the future of the business. Thus, a sustainable business needs to have a stable client base to effectively generate money.

The Service, which is the second area of the profit pillar, allows it to generate genuine value for which its customers are willing to pay. You may ask yourself, what does a good service look like? 

Good service is not just about buying the lowest price possible, it is fulfilling the integral parts of purchasing which are the right product, exact quantity, good quality, and the delivery of the product at the right place, at the right time. 

Additionally, the essence of good service is customer satisfaction. If you cannot fulfill their demands, then the business may be beaten by its competitors. 

Lastly, the third area of the profit pillar is Strategy. In this area, there needs to be a strategic perspective within the organization in linking both sales and service to streamline the process of the organization. 

2. People Pillar

The personnel management function within the organization is within the scope of the people pillar. The people pillar also has three core areas which are the Company, Character, and Community. 

The need to create a strong and effective team for the organization to run smoothly is within the Company area. The human resource function is crucial in meeting the goal for this area. 

On the other hand, the Character area is focused on maximizing the contributions of the individual employee to the organization. A strong HR policy will help fulfill the objectives of this area. 

Lastly, an effective people pillar needs to positively affect the third area, the Community, it surrounds. Thus, the organization must embrace this area as it is critical to its sustainable vision. 

3. Planet Pillar

The planet pillar is focused on preserving and maintaining the planet. This is important because how we use resources and how we dispose of our waste can affect the future of all people. 

Just like the first two pillars, the planet pillars can be broken down into three areas which are Reduce, Reuse, and Recycle. 

The concept of these three is to use less, reuse resources if possible, and recycle when a product is not effective anymore. 

The idea of Reuse follows closely on from Reduce. Instead of buying new things, we must encourage the use of the existing item, especially if they can still be used. 

Recycling, on the other hand, recognizes that the products which we deemed unusable have a residual value either at their product level or in recovered raw materials.