What is corporate social responsibility?

Corporate social responsibility (CSR) is a self-regulated business practice that organisations adopt to demonstrate their commitment to social ethics and sustainability, in addition to profits.

Corporations and businesses that practice CSR take what’s called the triple bottom line approach to their activities, prioritising profits, people, and the planet, rather than relying on business practices that focus on short-term gains. This is also sometimes referred to as ESG, meaning environmental, social, and governance decision-making standards.

There are a number of different names for corporate social responsibility, including:

corporate responsibility.
corporate sustainability.
corporate citizenship.
conscious capitalism.
responsible business.
business sustainability.

Corporate social responsibility can take a number of forms. For example, it might be embedded into an organisation’s overarching business strategy to ensure that all corporate activity and operations have a positive impact on both society and the business itself. It might take the form of initiatives and campaigns that promote environmentally sustainable practices, or tackle social issues or climate change. Some businesses commit to ISO 26000 social responsibility guidelines, and others participate in the United Nations Global Compact.

At their core, CSR activities are focused on creating a symbiotic relationship between businesses and the world in which they operate – businesses grow and prosper thanks to people and the planet, so they aim to give back in turn. According to the Chartered Institute of Personnel and Development (CIPD) – the professional body for human resources and people development – a CSR strategy ensures that an organisation’s operations are viable in the long term, and states that these “two factors are intrinsically linked because a business that damages the systems on which it depends will ultimately be unsustainable.”

Benefits of corporate social responsibility

Corporate social responsibility can achieve a number of positive outcomes for businesses, including:

Higher employee engagement. Staff members’ morale and motivation is increased when their values are reflected by their employer, they can engage in making a difference, and they can feel proud of their organisation and business leaders. This kind of empowerment can in turn assist with staff recruitment and employee retention.
Stronger brand image and reputation. The positive public relations (PR) and publicity generated by corporate social responsibility initiatives is virtually incalculable – it can build customer loyalty and strengthen competitive advantages, which in turn can increase sales and profit margins. CSR strategies have also been shown to improve business relationships with investors and regulators.
Bigger cost savings. Through CSR initiatives and ideas, businesses can save on energy costs and fees associated with carbon emissions. They may even be able to access specialist markets and capital funding sources.
Better innovation and new ways of working. By adopting a CSR business model, organisations and their staff are empowered to find creative new solutions that can help to revolutionise everything from procurement processes to marketing campaigns.

Areas of corporate social responsibility

Economic responsibility

Economic CSR is the practice of maximising profits without detrimental consequences for people and communities, or negative environmental impact.

Ethical responsibility

Ethical CSR covers a number of areas around business ethics, but generally demonstrates a strong commitment to ethical behaviour and activity across the organisation, whether sourcing fair trade materials or paying fair wages to all staff.

Philanthropic responsibility

Philanthropic CSR effectively means that a business puts its money where its mouth is – the organisation dedicates a portion of its earnings towards charitable donations and funding for trusts and nonprofits. It may also include employee volunteering schemes.

Environmental responsibility

Environmental CSR is focused on sustainable business practices, sound environmental management, and safeguarding natural resources. Initiatives might include:

reducing – or eliminating – the organisation’s carbon or greenhouse gas emissions.
avoiding the use of plastics.
using renewable energy sources.
increasing recycling and reducing waste within the business.
regularly compiling and sharing sustainability reports.
committing to sustainable products, manufacturing processes and packaging, and so on.

Social and human rights responsibility

Social and human rights CSR initiatives work to ensure that an organisation’s activities do not – at any stage – rely on forced labour, modern slavery, or child labour. It also means paying livable wages to all workers, and ensuring staff have safe and appropriate working conditions, hours, and facilities.

Supply chain and sourcing responsibility

Sourcing CSR initiatives are committed to transparent and traceable supply chairs. Businesses know – and can share – detailed information about their suppliers and their materials, and are committed to an ethical value chain.

Marketplace responsibility

Marketplace CSR considers the wider impact of an organisation’s products or services. For example, is pricing fair and ethical? Does the business comply with fair trading principles? Does the organisation pay its taxes and adhere to anti-bribery legislation and processes?

Community responsibility

Community CSR focuses on how a business impacts the community in which it operates. Does it positively contribute to the local community’s social fabric, social programmes, and well-being? Does it pay its staff adequate wages that allow them to live and work comfortably in the area? Does it promote sustainable development within its building projects, and ensure that any resources it consumes within the region are renewable and replenished?

Examples of corporate social responsibility in practice

Ben and Jerry’s

Ben and Jerry’s is one of the most commonly cited examples of corporate social responsibility. Over several decades, the ice cream manufacturer has built a solid brand reputation through its use of fair trade ingredients, social activism, and grassroots political campaigning.

Levi Strauss & Co.

For decades, denim entrepreneurs Levi’s has championed equality and worker protections through a number of different CSR programmes that prioritise a positive social impact.

Starbucks

Coffee chain Starbucks is another brand commonly associated with CSR. That’s because it’s focused on ethical sourcing within its supply chain, greener packaging and other forms of environmental sustainability, and empowering employees through free education programmes.

Help embed corporate social responsibility within organisations

Explore corporate social responsibility in greater depth with the University of Lincoln’s flexible LLM courses. These postgraduate degrees are studied 100% online, and one of their key modules is in corporate governance, so you will have the opportunity to gain insight into the theoretical, legal, practical, and ethical issues surrounding corporate governance and their influence on the management structure of modern companies.

You will be encouraged to develop a firm understanding of the concept of corporate governance, and the basic principles underlying the implementation of UK and international corporate governance codes. In particular, the course examines key issues such as in whose interest companies are run, the conflict between shareholders, other stakeholders and the board of directors, the mechanisms in place to ensure that shareholders’ interests are protected, the role of the board of directors, the proper functioning of the board, and issues surrounding remuneration.

Our LLM programmes include: