What is Corporate Social Responsibility (CSR) and how to implement it?
Corporate social responsibility, also known as CSR, is an economic and corporate paradigm that seeks to benefit the broader communities along which companies operate. Overall, it improves a company’s brand image, drives positive revenue growth, and brings actionable benefits to the larger society. In many countries, CSR is mandated by governmental entities and corporate rules and regulations.
This article looks at what is CSR and why companies need to engage in it.
What is CSR, and why is it important?
Corporate social responsibility as a concept is not new. Multiple studies show that companies that actively make the world a better place to live in have a competitive edge. From donations made to charitable institutions to actively taking part in improving people’s lives, companies have long engaged in CSR. However, as we know it today, CSR is driven not only by altruism but also by sales figures and other key performance indicators (KPIs).
A recent survey showed that 73% of investors chose to invest in companies that took a proactive approach toward alleviating environmental issues.
55% of American consumers think companies must take a stand regarding critical political, social, and environmental issues.
A staggering 93% of employees prefer companies with a certain purpose. In other words, a good CSR strategy will help boost employee morale and productivity.
There are a number of ways to implement CSR
There exist several methods through which a company can engage in CSR activities. They include awareness campaigns, donations, proactive and hands-on work in the field, etc.
Some of these activities may be recommended or mandated by authorities in certain jurisdictions:
Improving social conditions of different communities, including those of marginalized individuals
Taking a proactive approach towards the environment.
Please note that this may or may not include mandatory steps to reduce energy consumption and minimize carbon footprint.
Participate in steps taken to reduce corruption and enhance digital transparency.
Making contributions towards improving human rights situations and helping towards reducing socio-economic inequalities.
Assuming a leadership role in championing the rights of animals, eliminating animal testing, and improving the lives of stray dogs and cats (trap-neuter-release program, also known as TNR)
The list above is not comprehensive, and as a fact, CSR is context-dependent. Hence, as a company, it is essential to observe and learn from the communities that you operate in and take active steps to ideally improve the lives of people in those communities.
What type of companies should implement CSR?
Both listed and unlisted companies are required to adhere to CSR mandates. Often, companies with large turnovers are needed by governments to contribute a certain percentage of their profits towards CSR activities. However, smaller companies can choose to implement CSR for multiple other reasons ranging from altruism to enhanced brand image.
Managing and reporting CSR activities
As all CSR activities carry risks, third-party organizations must audit them. Auditing CSR activities and their risks help companies to make tax claims and ensure that their financial considerations are verifiable. In addition, it allows companies to generate valuable reports that link their CSR activities with bottoming figures.
Some of the benefits of an external CSR audit include:
- Better management extra-financial performance
- Managing carbon footprint and environmental impact of various business activities
- Ensuring workplace safety and corporate responsibility for communities
- Retaining transparency and verifiability of CSR data
- Ensuring the integrity of your CSR reporting
In short, external assistance for CSR management and reporting helps companies to simplify their complex and diverse socially responsible activities.
To find out how kShuttle can help you manage your CSR activities and keep them sustainable and profitable simultaneously, check out our website