Written by Marijn Overvest | Reviewed by Sjoerd Goedhart | Fact Checked by Ruud Emonds | Our editorial policy

Corporate Social Responsibility — Everything You Should Know

Key takeaways

  • Corporate Social Responsibility (CSR) involves ethical business practices that benefit society and promote sustainability.
  • The three CSR pillars (Profit, People, and Planet) drive positive change, enhance brand image, and foster employee morale.
  • CSR initiatives and programs can make your company appealing to current and future investors.

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. 

Before you read this article, I have created a free-to-download editable Sustainable Procurement Strategy templateIt’s a PowerPoint file that can help you assess your sustainability initiatives. I even created a video where I’ll explain how you can use this template.

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, this is the reason 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. Hence, 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. 

Furthermore, 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. 

Types of CSRBusinesses Can Practice

1. Philanthropy

Companies can practice CSR by donating money, products, or services to social causes and non-profit organizations. Huge companies have more resources that can benefit local communities and charities. 

Even small businesses can make a difference. If you have a specific charity in mind, you can call it and ask what they need. It does not matter how much and how many you can give. The thought that you want to help them is enough to show that you care for the community. 

2. Environmental Efforts

One of the primary focuses of CSR is the environment. Businesses have large carbon footprints regardless of how big they are. Any initiatives a company will make to reduce its footprint is considered both good for the company and the environment. 

3. Volunteering

Participating in local causes to give back to the community says a lot about your company’s sincerity to help people. When a company does good deeds without expecting to gain anything, it shows concern for social causes to help the lives of people in the community to be better. 

4. Labor Treatment

Companies can show their CSR initiatives by treating their employees with respect and fairness. This is especially true for companies that have operations in other countries with different labor laws. 

Benefitsof CSR

Corporate social responsibility has several ways to be beneficial for companies. One of its benefits is improving the brand image of a company. When customers see evidence that a business is socially accountable, they tend to respond positively by purchasing the products of a company. 

Another benefit of CSR is enhancing the morale of employees. Morale is usually higher at companies that invest a lot of resources and efforts into ethical and socially responsible behavior.

Additionally, some CSR measures can reduce overhead costs. For example, switching to energy-efficient equipment and reducing packaging on consumer packaged goods can help you save money in the long run. 

Examplesof Corporate Social Responsibility

1. Lego’s sustainability initiatives

As one of the most well-known companies in the world, Lego aims to foster a healthy planet. It is the first toy company to be named a World Wildlife Fund Climate Savers Partner, pledging to reduce its carbon impact. Also, its commitment to sustainability extends beyond its partnerships. 

Lego plans to use eco-friendly materials to produce all of its core products and packaging by 2030. Among its other initiatives, the company is committed to removing all single-use plastic packaging from its materials by 2025.

Along with these changes, Lego is committed to investing $164 million into its Sustainable Materials Center. This facility is where its researchers experiment with bio-based materials that can be implemented into the production process. 

2. Starbucks’ commitment to ethical sourcing

Starbucks launched its first report on sustainability in 2002 that aims to become as well-known for its CSR initiatives as much as their products. One of the ways Starbucks is fulfilling its goal is by sourcing ethically. 

It has verified that 99% of its coffee supply chain is ethically sourced and aims to boost that figure by 100% through continued efforts with local coffee farmers and organizations. 

Through its goal, Starbucks was named one of the world’s most ethical companies by Ethisphere in 2021. 

3. Google’s commitment to sustainability

Google is trusted not just for its commitment to sustainability but also due to its outspokenness regarding social issues. Google earned the Reputation Institute’s highest CSR score in 2018 as it uses 50% less energy than other companies in the world. 

Furthermore, it has committed over $1 billion to renewable energy projects and allows other businesses to decrease their environmental impacts through its services.


In conclusion, understanding and adopting corporate social responsibility (CSR) is imperative for businesses seeking sustained success. This article delves into the essence of CSR, covering its definition, importance, and the three pillars—Profit, People, and Planet.

The significance of CSR transcends profits, influencing brand image, employee morale, and even reducing overhead costs. Noteworthy examples, such as Lego’s sustainability initiatives, Starbucks’ commitment to ethical sourcing, and Google’s dedication to sustainability, showcase how leading companies are making impactful strides in CSR. By prioritizing ethical behavior, environmental consciousness, and community engagement, businesses can contribute positively to society while securing long-term success.

Frequentlyasked questions

What is sustainability in business?

Sustainability in businesses is the coordination and management of environmental, social, and economic demands and concerns ensuring ethical, responsible, and ongoing success.

What is the importance of sustainability today?

Sustainability allows companies to take responsibility for how their operation affects the environment and society. Therefore, It is important to protect the environment and the well-being of their workforce and their surrounding community.

Why are many companies switching to sustainability nowadays?

Many companies are switching to sustainability as they are pressured by customers, investors, and the government to be accountable for how they can impact the environment and the people through their operations.

About the author

My name is Marijn Overvest, I’m the founder of Procurement Tactics. I have a deep passion for procurement, and I’ve upskilled over 200 procurement teams from all over the world. When I’m not working, I love running and cycling.

Marijn Overvest Procurement Tactics