benefits of csr essay

How is CSR Defined?

Exactly what “socially responsible” means varies from company to company. However, CSR is typically broken down into four categories : environmental, philanthropic, ethical, and economic responsibility. This model is also referred to as Carroll's Pyramid .

• Environmental: reducing pollution, increasing use of renewable energy, and offsetting negative impacts.
• Ethical: ensuring fair treatment of all stakeholders from employees to customers—for example, through initiatives such as responsible sourcing of materials and creating an equitable work environment.
• Philanthropic: dedicating a portion of earnings to charitable giving that doesn't directly relate to a business.
• Economic: linking financial decisions to a company's commitment to do good in the above areas.

Researching Real Corporate Social Responsibility

How can you tell if a company is actively engaged in CSR? First, look at its website to learn about how it sets sustainability goals and how it measures progress. Determine if the content provides a thorough review of how sustainability is incorporated throughout the supply chain, including how a consumer's purchasing decisions make an impact.

Another solution is to identify if the organization supports the UN's Sustainable Development Goals (SDGs) and outlines a plan for incorporating the Ten Principles of the UN Global Compact in their operations.

Who Cares About CSR?

Consumers around the world want to live more sustainably and companies are responding, something that the World Economic Forum has referred to as an “eco-wakening. ”

Being an environmentally-conscious consumer starts with learning more about how companies are working toward their CSR goals.

More than half of the American population is part of the Millennial generation or younger. Today's young people are growing up with firsthand experiences of the impacts of climate change and represent the socially-conscious consumer of the future .

Benefits of Corporate Social Responsibility

An effective CSR program can have a positive impact on companies, employees, and consumers. For example, gaining efficiencies by reducing packaging or using less energy can help companies cut costs while also benefiting the environment.

CSR can also create a competitive advantage in the marketplace. Many consumers want to support companies that have a reputation for being good corporate citizens. In 2019, a national survey found that 70% of consumers wanted to know what the brands they support are doing to address social and environmental issues, and 46% paid close attention to a brand's social responsibility efforts when they buy a product.

On the flip side, another 2019 survey found that 25% of consumers had a “zero tolerance” policy toward companies that embrace questionable practices on the ethical front. A business that engages in socially or environmentally harmful behavior risks losing a significant number of potential customers.

Engage Your Workplace in Corporate Social Responsibility

CSR can help companies attract and retain talent in their workforce. Research by NEEF found that nearly 90% of employees engaged in their company's sustainability work say it enhances their job satisfaction and overall feelings about their workplace.

"When a company engages their employees with sustainability actions that align with their CSR goals, it leads to better business outcomes and empowers team members to live more sustainably at work, as well as at home and in their communities," said Nick Bradford, Program Director for Research & Innovation at NEEF.

Interested in integrating environmental and sustainability programs at your own workplace? NEEF's employee engagement resources are designed to help you establish or enhance corporate sustainability goals. There are many examples where companies saved money, improved efficiency, built stronger customer relations— or succeeded in doing all three — through these programs.

You can also contact our team to discuss implementing an employee engagement campaign at your organization.

Katrina Ávila Munichiello is an experienced editor, writer, fact-checker, and proofreader with more than fourteen years of experience working with print and online publications.

Corporate social responsibility (CSR) is a self-regulating business model that helps a company be socially accountable to itself, its stakeholders, and the public. 

By practicing corporate social responsibility, also called corporate citizenship , companies are aware of how they impact aspects of society, including economic, social, and environmental. Engaging in CSR means a company operates in ways that enhance society and the environment instead of contributing negatively to them.

Key Takeaways

• Corporate social responsibility is a business model by which companies make a concerted effort to operate in ways that enhance rather than degrade society and the environment.
• CSR can help improve society and promote a positive brand image for companies.
• CSR includes four categories: environmental impacts, ethical responsibility, philanthropic endeavors, and financial responsibilities.

Understanding Corporate Social Responsibility (CSR)

Through CSR programs, philanthropy, and volunteer efforts, businesses can benefit society while boosting their brands. A socially responsible company is accountable to itself and its shareholders. CSR is commonly a strategy employed by large corporations. The more visible and successful a corporation is, the more responsibility it has to set standards of ethical behavior for its peers, competition, and industry .

Small and midsize businesses also create social responsibility programs, although their initiatives are rarely as well-publicized as those of larger corporations.

• Environmental responsibility: Corporate social responsibility is rooted in preserving the environment. A company can pursue environmental stewardship by reducing pollution and emissions in manufacturing, recycling materials, replenishing natural resources like trees, or creating product lines consistent with CSR.
• Ethical responsibility: Corporate social responsibility includes acting fairly and ethically. Instances of ethical responsibility include fair treatment of all customers regardless of age, race, culture, or sexual orientation, favorable pay and benefits for employees, vendor use across demographics, full disclosures, and transparency for investors.
• Philanthropic responsibility: CSR requires a company to contribute to society, whether a company donates profit to charities, enters into transactions only with suppliers or vendors that align with the company philanthropically, supports employee philanthropic endeavors, or sponsors fundraising events.
• Financial responsibility: A company might make plans to be more environmentally, ethically, and philanthropically focused, however, it must back these plans through financial investments in programs, donations, or product research including research and development for products that encourage sustainability, creating a diverse workforce, or implementing DEI, social awareness, or environmental initiatives.

Volunteering

Some corporate social responsibility models replace financial responsibility with a sense of volunteerism. Otherwise, most models still include environmental, ethical, and philanthropic as types of CSR.

Benefits of CSR

According to a study published in the Journal of Consumer Psychology, consumers are more likely to act favorably toward a company that has acted to benefit its customers. As a company engages in CSR, it is more likely to receive favorable brand recognition . Additionally, workers are more likely to stay with a company they believe in. This reduces employee turnover, disgruntled workers, and the total cost of a new employee .

For companies looking to outperform the market, enacting CSR strategies may improve how investors view the company's value. The Boston Consulting Group found that companies considered leaders in environmental, social, or governance matters had an 11% valuation premium over their competitors.

CSR practices help companies mitigate risk by avoiding troubling situations. This includes preventing adverse activities such as discrimination against employee groups, disregard for natural resources, unethical use of company funds, and activity that leads to lawsuits, and litigation .

CSR programs can raise morale in the workplace.  

In its 2022 Environmental and Social Impact Report, Starbucks ( SBUX ) highlights taking care of its workforce and the planet among its CSR priorities through stock grants and additional medical, family, and educational benefits. The company's goals include achieving 50% reductions in greenhouse gas emissions, water consumption, and waste by 2030.

Home Depot ( HD ) has invested more than 1 million hours per year in training to help front-line employees advance in their careers, aims to produce or procure 100% renewable energy to operate its facilities by 2030, and has plans to spend $5 billion per year with diverse suppliers by 2025.

General Motors won the Sustainability Leadership Award from the Business Intelligence Group in 2022. The automaker provided $60 million in grants to more than 400 U.S. nonprofits focusing on social issues, and it has agreements in place to use 100% renewable electricity at its U.S. sites by 2025.

Why Should a Company Implement CSR Strategies?

Many companies view CSR as an integral part of their brand image, believing customers will be more likely to do business with brands they perceive to be more ethical. In this sense, CSR activities can be an important component of corporate public relations. At the same time, some company founders are also motivated to engage in CSR due to their convictions.

What Is ISO 26000?

In 2010, the International Organization for Standardization (ISO) released ISO 26000, a set of voluntary standards to help companies implement corporate social responsibility. Unlike other ISO standards, ISO 26000 provides guidance rather than requirements because the nature of CSR is more qualitative than quantitative, and its standards cannot be certified. ISO 26000 clarifies social responsibility and helps organizations translate CSR principles into practical actions.

What Are the Benefits of CSR?

CRS initiatives strive to have a positive impact on the world through direct benefits to society, nature and the community in which a business operations. In addition, a company may experience internal benefits through the initiatives. Knowing their company is promoting good causes, employee satisfaction may increase and retention of staff may be strengthened. In addition, members of society may be more likely to choose to transact with companies that are attempting to make a more conscious positive impact beyond the scope of its business.

What Companies Have the Best CSR?

Since 1999, Corporate Responsibility Magazine has ranked the top 100 Best Corporate Citizens each year among the 1,000 largest U.S. public companies. Rankings are based on employee relations, environmental impact, human rights, governance, and financial decisions. In 2023, the top-ranked companies include Hewlett-Packard Enterprise Company, Accenture, and Hasbro.

Companies striving to measure success beyond bottom-line financial results may adopt CSR strategies that target environmental, ethical, philanthropic, and fiscal responsibility that extend beyond the products they sell.

Society for Consumer Psychology. " Good Guys Can Finish First: How Brand Reputation Affects Extension Evaluations ."

Boston Consulting Group. " Your Supply Chain Needs a Sustainability Strategy ."

Frontiers in Psychology. " Corporate Social Responsibility and Employee Engagement: Enabling Employees to Employ More of Their Whole Selves at Work ."

Starbucks. " 2022 Starbucks Global Environmental and Social Impact Report ," Pages 6 and 32.

Home Depot. " ESG Report (2022) ," Pages 9-10.

General Motors. " 2022 Sustainability Report ," Pages 6-7.

International Organization for Standardization. " ISO 26000, Social Responsibility ."

3BL Media. " 100 Best Corporate Citizens of 2023 ."

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Making an Impact: The Benefits of Corporate Social Responsibility (CSR)

Corporate social responsibility (CSR) practices are an excellent way to demonstrate your organization’s stance on the economy, environment, and society at large. This self-regulating business model helps companies be socially accountable to themselves, their stakeholders, and the public. By practicing corporate social responsibility, companies can be conscious of the kind of impact they have on all aspects of society.

• Types of CSR
• The benefits of CSR
• What is a CSR report?

Businesses that practice corporate social responsibility aim to improve their communities, the economy, or the environment.

The definition of business success goes beyond profitability, growth rate, and brand recognition. In today’s world, customers, employees, and other stakeholders judge a company by how its activity impacts the community, economy, environment, and society at large. In other words, by whether it cares about the greater good and not only greater profit. Corporate social responsibility (CSR) practices are an excellent way to demonstrate your organization’s stance on the matter.

What is corporate social responsibility?

Corporate social responsibility is a self-regulating business model that helps a company be socially accountable to itself, its stakeholders, and the public. By practicing corporate social responsibility, also called corporate citizenship, companies can be conscious of the kind of impact they have on all aspects of society, including economic, social, and environmental.

Engaging in CSR means that, in the ordinary course of business, a company is operating in ways that enhance society and the environment instead of contributing negatively to them and focusing only on the bottom line.

Understanding corporate social responsibility

Corporate social responsibility is a broad concept that can take many forms depending on the company and industry. Through CSR programs, philanthropy, and volunteer efforts, businesses can have a positive social impact while boosting their brands.

Businesses that are socially responsible are essentially self-regulating , building issues such as climate change, poverty, equality, diversity, and inclusion into their business mission. They ensure that everything they do is ethical, fair, and beneficial to the communities they work in and interact with.

In essence, these businesses are thinking about and trying to work toward the greater good, rather than just making more money or pleasing their shareholders.

Types of corporate social responsibility

In general, there are four main types of corporate social responsibility . A company may choose to engage in any of these separately, and a lack of involvement in one area does not necessarily exclude a company from being socially responsible.

Environmental responsibility

Environmental responsibility is the pillar of corporate social responsibility rooted in preserving mother nature and addressing the environmental impact in the local community. Through optimal operations and support of related causes, a company can ensure it leaves natural resources better than before its operations. Companies often pursue environmental stewardship through:

• Reducing pollution, waste, natural resource consumption, and carbon emissions through its manufacturing process.
• Recycling goods and materials throughout its processes including promoting re-use practices with its customers.
• Offsetting negative impacts by replenishing natural resources or supporting causes that can help neutralize the company's impact.
• Distributing goods consciously by choosing methods that have the least impact on emissions and pollution.
• Creating product lines that enhance these values.

Ethical responsibility

Ethical responsibility is the pillar of corporate social responsibility rooted in a company’s values and acting in a fair, ethical manner. Companies often set their own standards, though external forces or demands by clients and company culture may shape ethical goals. Instances of ethical responsibility include:

• Fair treatment across all types of customers regardless of age, race, culture, or sexual orientation.
• Positive treatment of all employees including favorable pay and benefits in excess of mandated minimums. This includes fair employment consideration for all individuals regardless of personal differences.
• Expansion of vendor use to utilize different suppliers of different races, genders, Veteran statuses, or economic statuses.
• Honest disclosure of operating concerns to investors in a timely and respectful manner. Though not always mandated, a company may choose to manage its relationship with external stakeholders beyond what is legally required.

Philanthropic responsibility

Philanthropic responsibility is the pillar of corporate social responsibility that challenges how a company acts and how it contributes to society. In its simplest form, philanthropic responsibility refers to how a company spends its resources to make the world a better place. This includes:

• Whether a company donates profits to charities or causes it believes in.
• Whether a company only enters into transactions with suppliers or vendors that align with the company philanthropically.
• Whether a company supports employee philanthropic endeavors through time off or matching contributions.
• Whether a company sponsors fundraising events or has a presence in the community for related events.

Financial responsibility

Financial responsibility is the pillar of corporate social responsibility that ties together the three areas above. A company may make plans to be more environmentally, ethically, and philanthropically focused; however, the company must back these plans through financial investments in programs, donations, or product research. This includes spending on:

• Research and development for new products that encourage sustainability.
• Recruiting different types of talent to ensure a diverse workforce.
• Initiatives that train employees on DEI, social awareness, or environmental concerns.
• Processes that might be more expensive but yield greater CSR results.
• Ensuring transparent and timely financial reporting including external audits.

Benefits of corporate social responsibility

Increased employee satisfaction.

How a company chooses to treat its employees plays a significant role in its overall success. If employees feel unappreciated and believe they are simply a means to an end for their employers to make money, it will greatly affect the standard of their work.

On the other hand, employees who feel that the work they do matters and that they are a valuable asset to their employers will naturally feel more motivated to do their best to help the brand succeed. Offering employees opportunities to volunteer in the community during regular office hours is a great opportunity for personal growth and development.

Always remember that when employees are active in the community, they are acting as brand ambassadors for the business. How employees feel about their company will be evident in their interactions with the general community. This is why brands that hope to have a positive reputation must strive to have enthusiastic and satisfied employees.

Increased customer loyalty

Any business seeking to obtain loyal customers must understand that customers are loyal to brands that share a set of corporate beliefs and values that align with their own. Research shows that 87% of Americans are more likely to buy a product from a company when they can align their values; over half of all consumers are willing to pay extra for a product if they’re buying from a company with a sturdy CSR strategy. By embracing corporate social responsibility, you can add increase your competitive advantage and enhance brand awareness exponentially. Further, a separate study shows that millennials, who have been the largest generation group alive in the U.S. since 2019, prefer brands that center on authenticity, local sourcing, ethical production, a great shopping experience, and giving back to society. CSR programs are an opportunity for organizations to display their corporate values and reach those customers who share a similar set of ideals.

Increased employee engagement

Extensive research proves that CSR and a strong sense of employee purpose actively contribute to increased employee engagement .

That’s important because when a company has engaged employees , they see a 17% increase in productivity, are 21% more profitable and can have 41% lower absenteeism. Innovation also increases in an engaged workplace.

Translating this into financials, disengaged employees with a lack of job satisfaction cost businesses between $450 and $550 billion annually.

Giving back to the community is a virtuous circle in which engaged employees are enriched by volunteering opportunities that further engage and encourage them.

Attract and retain top talent

There’s a lot of competition to acquire top talent in the marketplace and increase retention. Do you wonder how you can tilt the odds in your favor? Here’s a tip: a company with a robust CSR program will appeal more to socially conscious job candidates than one that chooses not to support their communities or declines to take a stand on important cultural issues.

As Forbes states, younger adults in particular are interested in working for companies with good reputations that are active in their communities. Working for a socially responsible company has become one of the top factors for millennials when choosing where to work. As 76 percent of millennials look for employers based on their corporate social responsibility before signing an offer, giving back to the economy and employees has never been more important.

These workers are keen to align their personal beliefs with their professional goals. In fact, over 60% of Gen Y and Millennial adults donate to charities, while over 40% are active volunteers or members of some type of community organization.

Enhanced brand position

What makes a consumer choose the product sold by Company A rather than Company B?

One deciding factor could be a CSR program. By supporting causes and initiatives relevant to the business, Company A, which does participate in corporate social responsibility, will differentiate itself from Company B, which does not. Company A’s brand – what they do and why – is further elevated by its actions and involvement.

In fact, a strategically developed and properly implemented CSR program can enhance a brand’s ability to create and sustain a positive image in the marketplace,

Increased revenue

When you’re trying to win buy-in from leadership for your CSR program, it often falls to financials. Stakeholders want to know if this project will see a positive ROI - and research shows it will.   CSR and sustainable initiatives positively affect businesses’ bottom-lines .

Companies investing in social purpose have a 6% higher market value and generate 20% more revenue than companies that don’t invest in social purpose, according to Project ROI . And cost savings are often recognized in the process as well.

Press opportunities

Impactful CSR can get excellent press. If your organization is ever struggling to gain online popularity and press interest, your CSR initiative could be your route to market. Creating a CSR program that gets you noticed will see a fantastic boost in your brand awareness and overall online brand affinity.

However, be cautious about the why behind your CSR efforts. CSR that’s not authentic has been called greenwashing; if your CSR initiative seems too out of line with your mission and values, people can question its purpose, even though it comes with good intent. Improved investor relations

In a study by Boston Consulting Group , companies that are considered leaders in environmental, social, or governance matters had an 11% valuation premium over their competitors. For companies looking to get an edge and outperform the market, enacting CSR strategies tends to positively impact how investors feel about an organization and how they view the worth of the company.

Supports local and global communities

For all of the fantastic benefits your business gets from showcasing your CSR initiatives, it can be easy to overlook its reason for being in the first place. CSR gives people the leverage and the platform they need to make a difference in local and global communities.

Companies are often collections of like-minded, talented people working towards a broader vision. If you can find a CSR program that’s in line with the company’s values, then your business truly has the opportunity to create a substantial positive impact.

Risk mitigation

Consider adverse activities such as discrimination against employee groups, disregard for natural resources, or unethical use of company funds. This type of activity is more likely to lead to lawsuits, litigation , or legal proceedings where the company may be negatively impacted financially and socially. By adhering to CSR practices, companies can mitigate risk by avoiding these situations and creating an environment where they are least likely to happen.

What is a Corporate Social Responsibility report?

Corporate social responsibility reports are attempting to show one essential purpose: they portray the relationship between a corporation and society. They seek to improve communications between the corporate world and the broader society within which companies report.

As recently as 1990, only a few dozen companies made the effort to report on their relationship with stakeholders and society. Since the time, 90 percent of companies on the S&P 500 index published CSR reports in 2019—up from 86 percent in 2018, 75 percent in 2014, and only 20 percent in 2011.

A number of trends in first two decades of the 21st century have contributed to the growing emphasis on CSR reporting. These trends reflect the increasing size, scope, and influence of corporations in our globalized economic system, and the realization thatches powerful organizations can, if poorly managed, cause great social or environmental harm - or conversely, if well managed, help address many of the major challenges societies face around the globe.

What to avoid

Becoming a socially responsible business can be simple, but there are a few caveats.

Don’t choose unrelated initiatives

Avoid participating in charitable efforts that are not related to your core business focus or that violate your company’s ethical standards in any way. Instead of blindly sending money to a completely unrelated organization, find a nonprofit that your company believes in or invest in a project in your community .

Don’t use CSR as a marketing scheme

Don’t use CSR opportunities solely for marketing purposes. Running a corporate responsibility campaign as a quick marketing scheme can backfire if your business doesn’t follow through. Instead of trying a one-time stunt, adopt socially responsible business practices over time. Employees and consumers react positively to companies that embrace long-term social responsibility.

Don’t wait for the industry to catch up

If you are considering sustainable activities that aren’t legally required yet, don’t wait. By adopting socially responsible norms early on, you set the bar for your industry and refine your process.

Let’s do this!

By taking part in corporate social responsibility efforts and being conscious of the social, cultural, and environmental consequences of their business practices, organizations will reap benefits for both themselves and the wider community.

The importance of CSR is especially apparent in today’s world where consumers want to spend their money on products and brands that follow ethical practices, or whose values and actions align with their own personal beliefs.

Due to this, corporate social responsibility is not merely a business trend, but rather something that is going to be important for a long time to come. By making CSR a priority, brands will not only be working towards building loyal customers and a successful business, but they will also be contributing towards something that will help others and have a positive impact on the world in general.

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Published: 22 December 2023 Contributors: Amanda McGrath, Alexandra Jonker

Corporate social responsibility (CSR) is the idea that businesses should operate according to principles and policies that make a positive impact on society and the environment.

Through CSR, companies make decisions driven by financial gain and profitability, and the impact of their actions on their communities and the world at large. CSR goes beyond legal obligations: by voluntarily adopting ethical, sustainable and responsible business practices, companies seek to deliver benefits to consumers, shareholders, employees and society.

Learn about the processes used to manage environmental performance data and the steps required to account for greenhouse gas (GHG) emissions.

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Often, a company’s business model and practices are built around financial goals. However, CSR programs encourage business leaders to consider corporate citizenship or the larger impact of the business on society when making decisions. Corporate social responsibility helps companies ensure that their operations are ethical, safe and delivering positive impact wherever possible. Through CSR initiatives, companies work to limit environmental impact, contribute to solving societal problems (such as poverty and inequality) and ensure their brand identity reflects their values.

The theory of the “ triple bottom line ” can help organizations as they pursue corporate social responsibility. As a financial framework, the triple bottom line refers to the idea that a company’s business model should revolve around the three P’s: people, planet and profit. By maximizing all three, a company aims to make a positive impact on the world and remove barriers to growth.

Corporate social responsibility initiatives generally fall into four categories: environmental, ethical, philanthropic and economic. Each type of CSR contributes to a company’s overall CSR strategy.

More companies are assessing their overall environmental impact and engaging in CSR efforts that aim to protect natural resources and minimize any contribution to climate change. CSR encourages sustainability in business through eco-friendly practices, such as by reducing energy consumption, using renewable resources and minimizing waste.

Environmental responsibility hinges on eliminating negative impacts of business operations (primarily through limiting pollution-causing activities) as well as offsetting them through actions such as planting trees and engaging in programs that support biodiversity.

CSR initiatives often focus on social impact and human rights concerns, such as ensuring fair wages, safe working conditions and proper treatment of employees and suppliers. They also encourage accountability both internally and externally. Ethical CSR may include abiding by fair labor practices, ending workplace discrimination and ensuring supply chain transparency.

CSR practices include donating money, resources or time to positive causes and organizations, such as local and national charities, educational programs, disaster relief and more. Businesses who adopt philanthropic CSR engage with the communities where they operate, offering support through volunteer work, sponsoring local events, making contributions to local nonprofits or supporting skills training programs.

Corporate social responsibility involves ensuring that money is not a company’s sole motivator. To demonstrate this, companies enact policies and procedures to make sure their choices align with values, even if the alternatives may save money or boost profitability. Economic CSR also includes efforts to support the economic development and growth of the communities in which a business operates—for example, supporting job training and job creation efforts and forging local partnerships.

The benefits of CSR include:

CSR can have a positive impact on an organization’s brand identity as well as its bottom line. Some CSR efforts, such as improving energy efficiency, can reduce operating costs and might lead to savings in the end. Consumers increasingly prefer brands that share their values, and CSR policies offer ways for organizations to demonstrate those values, building trust and loyalty to fuel a competitive advantage.

CSR can also help attract top talent and drive employee engagement and retention, as more workers seek employers whose values align with their own. Additionally, a proactive approach to ethical and social issues has the potential to prevent legal problems, fines and reputational damage.

CSR initiatives can help people become more responsible consumers, making it easier for them to access products and services that align with their values and educating them on issues of sustainability and ethical consumption. It can encourage companies to prioritize and invest in testing, quality control and safety measures. CSR can also minimize the likelihood of defective or harmful products reaching consumers.

CSR can have a positive impact on the overall health of the planet, as it encourages environmental responsibility and sustainable practices. CSR initiatives can help companies reduce their greenhouse gas emissions or pursue net-zero emissions goals that are key to slowing climate change. They might also help conserve natural resources, reduce pollution and limit disruption of ecosystems. Additionally, a focus on CSR can support investment in research and development of eco-friendly products and practices.

Corporate social responsibility can help support local communities and address societal issues, such as poverty, inequality and environmental concerns. CSR initiatives can fuel economic growth by creating jobs. They can also shape public opinion as companies leading the way inspire others to follow suit, creating a positive ripple effect. A focus on ethical behavior at the corporate level reinforces a broader norm of ethical behavior across other parts of society.

Consumers are increasingly seeking products and services from socially responsible companies. Meanwhile, many investors are prioritizing companies whose values are clear and aligned with their own. To meet these demands, businesses are integrating CSR into their operations. In addition, global expansion and the increasingly interconnected nature of supply chains pushes companies to comply with a growing web of regulatory environments and to better confront the impact of their business on communities around the world.

With increased awareness of environmental issues, labor practices and ethical concerns, combined with better research and communication, CSR is now more central to business strategies. Some companies even have dedicated CSR departments.

Examples of CSR include:

• Donating a percentage of profits to environmental or social causes
• Committing to using recycled and eco-friendly materials
• Sourcing fair-trade materials and ingredients
• Engaging in social activism or fundraising on behalf of social causes
• Using technology such as artificial intelligence (AI) to drive energy efficiency and reduce carbon footprints
• Creating programs for the ethical use and disposal of products, such as electronics recycling programs
• Instituting diversity, equity and inclusion (DEI) programs that support efforts to diversify and grow the workforce in new ways
• Supporting programs that replenish the natural resources, such as water or timber, used for production
• Turning to renewable energy sources and other strategies that help in the pursuit of net-zero or carbon-neutral goals
• Establishing employee well-being programs that support their physical and mental health

Corporate social responsibility is the overall ethos that drives a company to adopt policies and practices that support sustainability, societal and other ethical ends. Environmental, social and governance (ESG) is about the ways in which their impact is measured or quantified. While both CSR and ESG are about reflecting the company’s values, CSR is typically seen as more of an internal framework, while ESG frameworks are often used externally as a way of demonstrating real-world impact.

Because the parameters of corporate social responsibility are continually evolving, there is no single standard by which CSR initiatives are measured or governed. Companies that embrace CSR are guided by local and international laws, including environmental regulations, labor rules and consumer protection standards.

Some efforts are also held to industry-specific standards; for example, the Global Reporting Initiative (GRI) provides reporting standards for sustainability. Organizations like the United Nations have introduced global guidance, such as the Sustainable Development Goals (SDGs), which encourage businesses to adopt sustainable practices.

Many companies that embrace CSR will also engage in CSR reporting , through which they document performance of non-financial metrics and provide transparency on social and environmental impact. CSR reporting is typically voluntary; however, some jurisdictions mandate that large organizations disclose social and environmental performance, so that investors and consumers can assess CSR efforts.

Some organizations have designated corporate social responsibility teams that oversee a company's CSR activities. People on these teams plan and run the social and environmental programs that align with the company's values and goals. They work with company leadership to devise the overall CSR strategy and engage stakeholders, including employees, customers, investors and community partners, to help them succeed. They also typically track and report on their progress by using metrics and other methods of assessment, deal with compliance and regulatory issues and manage communication about the company’s CSR efforts both internally and externally.

Simplify the capture, consolidation, management, analysis and reporting of your environmental, social and governance (ESG) data.

CSR reporting is the practice of reporting an organization’s performance of non-financial metrics, providing transparency on the organization’s impact on society and the environment.

Net zero is the point at which greenhouse gases emitted into the atmosphere are balanced by an equivalent amount removed from the atmosphere.

The goal of the CRSD is to provide transparency that will help stakeholders better evaluate EU companies’ sustainability performance as well as the related business impacts and risks.

The triple bottom line (TBL) is a sustainability framework that revolves around the three P’s: people, planet and profit.

Sustainability in business refers to a company's strategy and actions to eliminate the adverse environmental and social impacts caused by business operations.

Decarbonization is a method of climate change mitigation that reduces greenhouse gas (GHG) emissions, as well as removes them from the atmosphere.

Simplify the capture, consolidation, management, analysis and reporting of your environmental, social and governance (ESG) data with IBM Envizi ESG Suite.

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Article contents

Corporate social responsibility.

• Abagail McWilliams Abagail McWilliams College of Business Administration, University of Illinois at Chicago
• https://doi.org/10.1093/acrefore/9780190224851.013.12
• Published online: 28 February 2020

Corporate social responsibility (CSR) is a legitimate responsibility to society, based on the principle that corporations should share some of the benefit that accrues from the control of vast resources. CSR goes beyond the legal, ethical, and financial obligations that create profits.

In the research literature, corporate social responsibility is defined in a variety of ways, depending on the aspect of CSR being examined. An inclusive definition is that social responsibility requires the firm to take into account the interests of all stakeholders, where stakeholders are defined as everyone who affects or is affected by the firm’s decisions and actions. A firm-focused definition holds that social responsibility includes actions that further a social goal, beyond what is required by ethics, law, and profitability. A political economy–oriented definition posits that firms have a responsibility to correct market failures such as negative externalities and government failures such as limits to jurisdiction that result in worker rights violations.

When implemented, altruistic CSR implies that firms provide a social good unrelated to the firms’ business that does not benefit the bottom line. Strategic CSR implies that firms are simultaneously profitable and socially responsible. To achieve this, CSR must be a core value of the firm and must be integrated into processes and products. When employed strategically, CSR can be an element of a differentiation strategy, leading to premium prices, enhanced brand and firm reputation, and supportive community relations. Corporate environmental responsibility often takes the form of overcompliance with regulation, improving the environment more than is required. A primary benefit of this is to stave off further regulation.

To capture the benefits of being socially responsible, the firm must make stakeholders aware of its record. This has led to triple bottom line reporting—that is, reporting about firm performance in terms of profits, people, and the planet. Social enterprises go a step further and make social responsibility the primary goal of the organization.

• corporate environmental responsibility (CER)
• corporate social performance (CSP)
• greenwashing
• overcompliance
• political corporate social responsibility
• psychological benefits
• stakeholders
• strategic CSR
• sustainability
• triple bottom line

Historical Perspective

Corporate social responsibility (CSR) can be thought of as legitimate responsibility to society that goes beyond the legal, ethical, and financial obligations that create profits, based on the principle that corporations should share some of the benefit that accrues from the control of vast resources. Or, more plainly, in market economies corporations can amass great wealth because society protects their right to do so, therefore the corporations owe something back to all of society, not just those engaged in market exchange with the corporations. The world’s resources should benefit the poorest in addition to the wealthiest, and corporations can be the conduit through which resources are befittingly distributed.

When resources are not equitably distributed, the disadvantaged look first to the government for help and support. But when the government hasn’t the resources, the will, or either, it cannot provide adequately for those in need and may engineer public policy to require businesses to be responsible.

The idea that corporations should act responsibly dates back to the inception of industrialization. With industrialization, the poor were often driven off the land and into cities to look for employment. The available employment, however, did not pay a living wage for an individual, let alone a family. This led to crushing poverty, ill health, and short lives for the working poor. Some industries employed young children, and low pay and inhumane working conditions were common (Marx & Engels, 1967 ). In general, governments didn’t have the will to require firms to act responsibly toward exploited groups. However, in 1833 , the English Parliament passed Lord Althorp’s Factory Act, which effectively regulated child labor in the textile industry in England. Responsible behavior was forced upon rich industrialists, but more importantly the act established the right of government to regulate industry for a clear social purpose (Marvel, 1977 ).

A hundred years after the passage of the first effective industrial regulation, the plight of the disadvantaged was not much improved. The Great Depression highlighted the resource disparities inherent in industrialized economies and triggered attention to the lack of social responsibility displayed by wealthy corporations. But World War II intervened, and the focus turned away from social needs and toward supplying the military. After the war ended and throughout the 1950s, economies turned to modernization and, in much of the world, replacement of lost industrial capacity. It was a time of great prosperity in industrial nations, but, as before, the benefits of prosperity were not equally distributed. The politically weak, including women and minorities, didn’t garner much of the benefits.

In the 1960s there was intense focus on social problems, including disparity of opportunity as well as disparity of resources. It was clear that disadvantaged groups did not have equal access to resources, many of which were controlled by corporations for the benefit of their shareholders. As women and minorities gained political power, calls for corporations to be socially responsible became more direct and visible.

Definitions

There are myriad definitions of corporate social responsibility, a few of which follow. In a managerial context, McWilliams and Siegel ( 2001 , p. 117) define corporate social responsibility as “actions that appear to further some social good, beyond the interests of the firm and that which is required by law.” From an economic perspective, Lundgren ( 2011 , p. 70) defines corporate social responsibility as “actions that, to some degree, imply corporate beyond-compliance behavior in the social and/or the environmental arena,” and Bénabou and Tirole ( 2010 , p. 2) define corporate social responsibility as “sacrificing profits in the social interest.” From a political economy viewpoint, Heal ( 2005 , p. 387) defines corporate social responsibility as “a programme of actions to reduce externalized costs or to avoid distributional conflicts.” The examples go on, with Dahlsrud examining 37 of them and concluding that “Although they apply different phrases, the definitions are predominantly congruent, making the lack of one universally accepted definition less problematic than it might seem at first glance ( 2008 , p. 6).” In a discussion of why there is no definitive definition of corporate social responsibility, McWilliams, Rupp, Siegel, Stahl, and Waldman ( 2019 , p. 3) speculate that “Targeted definitions allow researchers to focus on an area of study such as the environment or stakeholders, or on processes such as operations or strategy, while broad definitions allow interdisciplinary discourse on the motivations and ramifications of CSR.”

Beyond defining what corporate social responsibility is, it is helpful to clarify related terms that are sometimes confused with corporate social responsibility.

Compliance, Ethics, and the Triple Bottom Line

The terms compliance, ethics, and corporate social responsibility are often used interchangeably, but mistakenly so. Carroll’s pyramid of responsibilities is a good guide for separating the concepts. According to Carroll, compliance is a legal requirement, while ethics is the requirement to do no harm, and corporate social responsibility is the expectation for corporations to go beyond compliance and ethics and do good for society, creating social value (Carroll, 1991 ).

But being socially responsible and being irresponsible are not mirror images of each other. That is, being socially responsible is not just the absence of irresponsibility, and neither is social irresponsibility simply the absence of being responsible. Failing to meet any of the three explicit requirements of fiscal responsibility, laws, and ethics is irresponsible management. But meeting all three of these responsibilities does not rise to being socially responsible. Between irresponsible and socially responsible is the state of meeting fiscal, legal, and ethical responsibilities while not going the extra mile to create social good. This can be called socially neutral.

Corporate social responsibility is sometimes referred to as balancing the triple bottom line: profits, people, and the planet. The triple bottom line incorporates the idea of economic, social, and environmental concerns for which a corporation may have responsibility. A corporation that measures its performance against a triple bottom line explicitly promotes a broader responsibility than that of profit maximization and uses triple bottom line performance to convey to internal and external stakeholders that the corporation is being socially responsible in its decisions and operations.

Theoretical Perspectives

Conventional exclusionary view.

Nobel Prize–winning economist Milton Friedman argued that the responsibility of business is to maximize profits for the benefit of the owners (shareholders), within ethical and legal boundaries. Responsibility for social programs, he argued, rightfully adheres to elected officials (Friedman, 1970 ).

Arrow ( 1973 ) challenged Friedman’s broad conclusion that corporations have no responsibilities beyond profit maximization on two counts. Count one is that production often generates negative externalities (such as air and water pollution) that are not appropriately priced in the market. Count two is that there is asymmetric information between producers and consumers. Producers have more knowledge about the true quality (and therefore true value) of products than do the consumers who purchase them. Arrow concludes these two market imperfections create a social responsibility for corporations because, while externalities are sometimes regulated by government, asymmetric information is not, and both can be addressed more efficiently by corporations than by governments.

Heal ( 2005 ) offers an updated perspective of corporate social responsibility that builds on Arrow, adding the risk of protests, such as Occupy Wall Street, to Arrow’s challenge of Friedman. Heal proposes that corporate social responsibility programs (such as corporate environmentalism) can reduce externalities and also ward off conflicts and demands for distributive justice, such as Black Lives Matter (Schulz, 2017 ). Arrow and Heal’s arguments also provide a basis for stakeholder theory.

Inclusive View

Stakeholder theory challenges the assumption that shareholders have the only valid claim on the resources controlled by corporations. Freeman and Reed ( 1983 ) argue that any group that affects or is affected by the behavior of the corporation is a stakeholder whose interests should be considered in corporate decision-making. As corporations increasingly acknowledged responsibilities beyond profit maximization, stakeholder management became a means of enhancing firms’ reputations and improving community relations, and stakeholder theory became a dominant logic in corporate social responsibility. Incorporating stakeholder theory into strategic management has resulted in stakeholder analysis being directed at helping managers identify stakeholders and prioritize claims on corporate resources (Chandler, 2017 ).

Carroll ( 1991 ) repudiates Friedman’s conclusion that corporations have no social responsibility. He proposes a normative model of corporations as organizations with multiple responsibilities: economic/fiscal, legal, ethical, and philanthropic. The economic responsibility is necessary for survival, legal responsibility is required for legitimacy, ethical responsibility is required to do no harm, and philanthropic responsibilities are expected of a good corporate citizen. Carroll depicts the responsibilities as a pyramid, with profitability as the base, followed by legal, then ethical and finally philanthropic as the pinnacle. Carroll’s characterization of corporate responsibility is that it includes all four categories, including the philanthropic contributions to the community to promote social good. However, philanthropy differs in being expected, but not required.

Economic View

To explain the link between corporate social responsibility and profitability, McWilliams and Siegel ( 2001 ) take a micro-economic–based theory of the firm perspective. From this perspective, they assume that corporate managers seek to maximize profits and ask the question: How can managers determine the optimal amount of investment to make in corporate social responsibility, that is, how can they determine the amount of investment in corporate social responsibility that is consistent with profit maximization? They propose that corporate social responsibility can be a component of a differentiation strategy. Consumers demonstrate a demand for socially responsible products (e.g., LED lights, free trade coffee, hybrid vehicles) and production processes (e.g., animal-free testing, green production, organic farming), and firms respond by adding the demanded socially responsible characteristics, thereby creating a differentiated product. The added costs of differentiating the product lead to premium prices. McWilliams and Siegel ( 2001 ) therefore conclude that, because the investment in corporate social responsibility supports the firm’s differentiation strategy, it should be treated the same as any strategic investment. To maximize profits, the corporation should invest up to the point where the additional cost of corporate social responsibility is equal to the additional revenue generated by corporate social responsibility.

Lundgren ( 2011 ) provides a formal, mathematical model of corporate social responsibility at the firm level based on micro-economic theory. He proposes that the costs of socially responsible programs can be offset by the increased revenues from consumers who value corporate social responsibility and the increased market value generated by investors who value corporate social responsibility. He explicitly models goodwill capital, an intangible asset, as a primary benefit of corporate social responsibility, tying corporate social responsibility explicitly to firm value and potential profitability.

Corporate social responsibility can also be conceptualized as a form of reputation insurance that protects the firm’s reputation when adverse events occur (Minor & Morgan, 2011 ). Adverse events, such as the 2010 Deepwater Horizon oil spill, are especially costly because they include both direct cost—such as fines, legal costs, and compensation to injured parties—and the indirect costs associated with loss of corporate reputation (Mejri & DeWolf, 2013 ). Loss of reputation can affect stock price, financing terms, and future revenue far into the future. When an adverse event occurs, external stakeholders will make judgments about what went wrong. They may decide that the adverse event was the result of poor management and downgrade the reputation of the firm or they may decide that the event was just bad luck and not recalibrate the reputation of the firm. Being known for corporate social responsibility can sway external judgments in favor of management and the firm, protecting the firm’s reputation and significantly lowering the indirect costs of such an event.

Political View

Bagnoli and Watts ( 2003 ) characterize corporate social responsibility as the private provision (by the corporation) of a public good (such as pollution abatement). Building on this, Scherer and Palazzo ( 2011 ) propose that globalization of business has resulted in political, rather than normative or economic, corporate social responsibility. They point out that laws and regulations are enforced within national boundaries, while social problems know no boundaries and negative externalities (such as air pollution) cross boundaries. The void in global governance may be (perhaps by necessity) addressed by businesses, especially multinational corporations. According to Scherer and Palazzo ( 2011 ), political corporate social responsibility suggests that corporations will contribute to global regulation (such as sustainability or workplace safety) and provide public goods (such as human rights protections and community wellness programs).

Bénabou and Tirole ( 2010 ) characterize corporate social responsibility as a response to government failure. They discuss three ways in which governments fail: capture by special interest groups, limits to jurisdiction, and poor information and inefficiency.

In addressing the problem of limited jurisdiction, Christmann ( 2004 ) suggested that multinationals will embrace a global strategy so that they can transfer best practices of social responsibility across boundaries, effectively creating global standards. Multinational corporations that enforce the same standards everywhere they operate may be merely complying with regulation in their home country but being socially responsible in countries with lower standards. Implementing the same standards globally allows multinational corporations to be more efficient by taking advantage of scale economies and also benefiting from reputation insurance.

McWilliams and Siegel ( 2011 ) reject Baron’s view that motivation determines what is socially responsible behavior and, in contrast, argue that social responsibility that is motivated by profitability can reconcile Friedman’s view of the profit maximization responsibility of the firm with that of social responsibility. That is, by being socially responsible, firms can attend to the bottom line (profits) while also creating social good. This is known as strategic corporate social responsibility, a term introduced by Burke and Logsdon ( 1996 ). To the extent that corporations are meeting expectations of stakeholders, strategic corporate social responsibility disputes Friedman’s view that social responsibility adheres to public officials. According to the Organisation for Economic Co-operation and Development, “Strategic behaviour is the general term for actions taken by firms which are intended to influence the market in which they compete. Strategic behavior includes actions to influence rivals to act cooperatively so as to raise joint profits, as well as non-cooperative actions to raise the firm’s profits at the expense of rivals” (OECD, 2007 , p. 751).

McWilliams and Siegel ( 2001 ) concluded that firms can respond to demands for corporate social responsibility by incorporating social responsibility into a differentiation strategy. The firm differentiates its products/services to include CSR attributes, as well as incorporating CSR into firm processes. Differentiation should allow the firm to charge premium prices to cover additional costs of providing the socially responsible attributes.

However, when asymmetric information allows firms that do not engage in corporate social responsibility to position their products as similar to those that do embody corporate social responsibility, the socially responsible firm may face a competitive disadvantage. The socially responsible firm invests in corporate social responsibility but cannot charge more than the firms that do not. In this situation, the socially responsible firms may be forced to lobby their government for legally enforceable standards that apply to all firms in the industry (Heslin & Ochoa, 2008 ). Conversely, some firms will lobby for standards that cost their competitors more to meet than they cost the lobbying firm. The lobbying firm can create a competitive advantage by masking competitive behavior as social responsibility (McWilliams, Van Fleet, & Cory, 2002 ).

An important distinction of strategic corporate social responsibility is that it is embedded in the corporation’s operations, processes, and core competencies (Aguinis & Glavas, 2013 ), regardless of whether it is implicit as was more conventional in European companies or explicit as in U.S. companies (Matten & Moon, 2008 ). Embedding corporate social responsibility allows for synergistic effects, such as when a steel company uses its core competency in plant design and construction to build plants that are more efficient and use less energy (i.e., are environmentally responsible). Linking the corporation’s social responsibility to its core competencies can produce maximum social benefit. Being explicit and transparent about its corporate social responsibility also enables and enhances positive effects on firm reputation (Servaes & Tamayo, 2013 ).

Corporate social responsibility can be a long-term strategic asset that enhances reputation and brand image. As such, it can lead to customer loyalty and repeat sales and, in some industries, premium prices. Originally thought to only support a differentiation strategy, we now see corporate social responsibility prominently reported by low-cost-leader companies in business-to-business and commodity industries (Nucor, 2018 ). This indicates that while corporate social responsibility can support premium pricing, it also can result in lower costs, such as lower financing costs, lower legal costs, or lower turnover costs, as well as a higher-quality, better-motivated workforce (Sprinkle & Maines, 2010 ). Therefore, strategic corporate social responsibility can support a low-cost-leader strategy when embedded in the core competencies that create low-cost advantage.

However, corporate social responsibility activities will create benefits for the corporation only if they are effectively and honestly communicated to internal and external stakeholders (Lee, Oh, & Kim, 2013 ). When the corporation appears to be claiming to do more than it actually does, employees and consumers quickly become jaded and remain skeptical of future corporate social responsibility claims. Therefore, corporations must be forthright about their social responsibility so as to not generate or escalate skepticism.

Environmental

Environmental responsibility is one of the fastest growing areas of corporate social responsibility worldwide. Because compliance with environmental standards is a legal responsibility, being socially responsible means overcompliance. Corporate environmentalism is sometimes referred to as corporate environmental responsibility.

In the United States, the Environmental Protection Agency (EPA) was created by executive order in 1970 and made responsible for enforcing environmental laws. Early regulation was command and control: the EPA set standards and mandated how corporations complied. Over time, more attention was paid to gathering and disseminating information, and corporations moved to design solutions that met standards in more efficient/cost-effective ways, providing a springboard for corporate environmentalism.

Maxwell, Lyon, and Hackett ( 2000 ) couched corporate environmentalism as strategic self-regulation to preempt political action. They find that the threat of increased regulation is sufficient to prompt corporations to overcomply with existing environmental regulation. Because political action is costly for the firm and for the activists, it makes sense for firms to overcomply to fend off political action, benefiting both the corporation and the environment.

Voluntary environmental reporting such as the Global Reporting Initiative of 1997 encourages corporations to overcomply with environmental regulations and to actively engage in corporate environmentalism (Sheehy, 2019 ) to enhance firm reputation and brand. A reputation for environmentalism can result in many benefits, including attracting environmentally conscious consumers and investors (Lyon & Maxwell, 2008 ), the aforementioned preemption of regulation, and lower legal and financing costs. This last is a result of the lower probability that the firm will incur legal costs as a result of violating environmental standards, such as those tied to oil spills and poisonous gas leaks, since the internal target exceeds the legal regulation (Sheehy, 2019 ).

Environmental laws and regulations differ around the globe, requiring firms to be aware of local regulations but also providing them with opportunities to search for favorable (presumably less stringent) standards. However, Dowell, Hart, and Yeung ( 2000 ) found that firms that enforce the most stringent regulations worldwide are most successful. Additionally, Nidumolu, Prahalad, and Rangaswami ( 2009 ) found that corporations that innovate ahead of increasing standards have time to experiment and test new solutions and that corporations that enforce a single standard worldwide can take advantage of scale economies.

Conversely, corporate environmentalism branding can have serious negative consequences if not designed and implemented properly. Firms that fail to deliver on their environmental claims can be charged with “greenwashing,” that is, overstating their environmentalism. A particularly insidious form of “greenwashing” takes place when a corporation masks its true environmental performance by engaging in selective disclosure of benign impacts rather than full disclosure (Marquis, Toffel, & Zhou, 2016 ). In an empirical study of “greenwashing,” Walker and Wan ( 2012 ) demonstrated that claiming to be green (i.e., environmentally responsible) without actual green behavior negatively affects a corporation’s financial performance.

Sustainability

Corporate environmentalism increasingly embraces sustainability, which is a more comprehensive program of environmental stewardship. Sustainability requires attention to global and intergenerational effects of corporate operations.

According to the 1987 UN Brundtland report (World Commission on Environment and Development, 1987 ), “development that meets the needs of the present without compromising the ability of future generations to meet their own needs” is sustainable. From this, one can extrapolate a definition of corporate environmental sustainability that incorporates a universal dimension—not just a clean environment where the corporation operates now, but a global and intergenerational one. That is, socially responsible corporations must consider the effects of current operations on the environment both now and in the future. They must also balance current and future economic and equity responsibilities.

Sustainability implies more than environmental impact management: all resources must be managed to ensure sustainability. Corporations must be mindful of how they manage farm land, forests, ocean fish stocks, animal and plant breeding, and valuable minerals, as well as how they can support sustainable development in developing economies. Hart ( 2010 ) coined the phrase “sustainable global enterprise” to label multinational enterprises that deliver economic, social, and environmental benefits across all their global operations. An example of a sustainable global enterprise is a multinational food company that “has implemented living wage standards for all of its farm workers in every country in which it harvests fruit, and which has introduced state-of-the-art environmental practices throughout its supply chain” (Aguilera, Rupp, Williams, & Ganapathi, 2007 , p. 838).

Nidumolu et al. ( 2009 ) studied sustainability initiatives of multinational corporations and found that embracing sustainability led to innovation that creates better products and new businesses, increases brand loyalty, and reduces costs—contributing to both the top line (revenue) and bottom line (profitability) of the corporation. Consumers perceive that products that are produced sustainably or have sustainable characteristics are better products and, therefore, worth more. New revenue streams can come from businesses created by recycling and reusing products that have exhausted their original purpose. Additional revenue is generated when consumers develop brand loyalty through their experience with sustainable products. Cost reductions come from using fewer inputs in all parts of the value chain (from raw materials, through production and distribution to final sales). Additionally, firms that anticipate increasing environmental regulation can innovate ahead of their competitors and reap first-mover advantages. All of these increase the bottom line as well as being socially responsible.

Social Enterprise

The simplest type of corporate social responsibility is philanthropy, where a corporation donates part of its profits to programs that address social problems. The inner workings of the firm, its organization, its mission, its strategy, etc., are unaffected by the goals of the programs that receive financial support.

The social goods produced by the financially supported programs can be peripheral to the corporation. Some corporations that engage in strategic corporate social responsibility explicitly align social goods produced with other strategic components of the firm. For example, firms may have “buy one–give one” program where customers buy a branded product (e.g., a pair of shoes) and the firm gives one (pair of shoes) to a child in need. The social mission is less peripheral to profit-making.

Social enterprises go one step further than that and make their social mission part of the firm’s core. Defourny and Nyssens ( 2008 , p. 202) define social enterprises as “not-for-profit private organizations providing goods or services directly related to their explicit aim to benefit the community.”

One type of social enterprise is a benefit corporation, which is a legal business entity that is required to have a social mission at its core (Hiller, 2013 ). In the United States, the need for a new legal form of for-profit that explicitly recognizes a social mission led to laws in some states that allow for benefit corporations. These corporations must declare themselves as such in their articles of incorporation and are required to submit to review by an independent third party to confirm that they are fulfilling their social mission. It should be noted that the independent review of the impact of benefit corporations is holistic—that is, it comprises all of the effects of the corporation on society, not merely its effect on selected areas such as profitability and environmentalism (B Lab Company, 2017 ). This is in contrast to standard corporations, which can legally engage in “greenwashing,” promoting corporate social responsibility activities while simultaneously obfuscating socially irresponsible actions (Marquis et al., 2016 ; Walker & Wan, 2012 ).

Another type of social enterprise is social entrepreneurship, which is an “innovative, social value creating activity that can occur within or across the nonprofit, business, or government sectors” (Austin, Stevenson, & Wei-Skillern, 2012 , p. 371). While the social mission is always core to social entrepreneurship, it is not always obviously so, because it may be either explicit or implicit. In social entrepreneurship for the disadvantaged the social mission is explicit, that is, benefits (such as jobs) are provided to the disadvantaged. In social entrepreneurship by the disadvantaged, there is an implicit social mission of improving the (disadvantaged) entrepreneur’s circumstances, irrespective of whether there is an explicit social mission, such as providing jobs for others who are disadvantaged (Renko & Freeman, 2019 ).

The implicit social mission of entrepreneurship by the disadvantaged provides a conduit for social good created by corporate social responsibility programs, making support of entrepreneurship an attractive option for firms that engage with disadvantaged populations. For example, multinational corporations in Africa are adding to their corporate social responsibility portfolios the support of entrepreneurship in disadvantaged economies through education, training, and skills development initiatives (DeBerry-Spence, Torres, & Hinson, 2019 ).

The Business Case

The business case for corporate social responsibility refers to the belief that there is a causal link between being socially responsible and achieving profitability. It is argued that firms that do good (for society) will do well (be more profitable and have higher market value). In the context of corporate social responsibility, “doing well” can be the result of many advantages, such as premium pricing, repeat sales, higher employee productivity, lower cost of capital, or lower legal costs, all of which may translate into higher profitability and firm value in either the short run or the long run. Determining if firms “do good” is more problematic but is generally referred to as corporate social performance, which Wood defines as “a business organization’s configuration of principles of social responsibility, processes of social responsiveness, and policies, programs, and observable outcomes as they relate to the firm’s societal relationships” ( 1991 , p. 693). Two widely used measures of corporate social performance are the Fortune Corporate Reputation Index and the Kinder, Lydenberg and Domini (KLD) index of reputation (Fombrun, Gardberg, & Sever, 2000 ).

In the 1990s the business case for corporate social responsibility (doing well by doing good) became a dominant theme in academic research. Countless empirical studies attempted to show a causal link between corporate social responsibility and corporate financial performance. These studies were hampered by difficulties in defining and measuring corporate social performance, often leading to inconsistent results (Margolis & Walsh, 2003 ) and sometimes suffering from lack of methodological rigor (McWilliams & Siegel, 2000 ). Barnett ( 2007 ) concludes that there is no universal evidence of doing well by doing good, because doing well is contingent upon the corporation, the timing, and the particular socially responsible investment. He suggests that academic research should focus on figuring out when, where, and what type of social responsibility will allow corporations to do well by doing good. Carroll and Shabana ( 2010 , p. 101) support Barnett’s findings and conclude that “the benefits of CSR are not homogeneous, and effective CSR initiatives are not generic.”

Although meta-analyses have been conducted (e.g., Friede, Busch, & Bassen, 2015 ) in an attempt to make sense of the inconsistent results of earlier studies, the inclusion of criticized empirical studies and the bias toward publishing only studies that have statistically significant results makes the results of meta-analyses problematic. Given the inherent difficulties of testing the business case for corporate social responsibility, including, “the inaccessibility, both apparent and actual, of good data” (Wood, 2010 , p. 75) and the lack of consensus on appropriate methodology, academic research has subsequently moved beyond trying to empirically verify a causal link between corporate social responsibility and profitability to accepting that corporations have social responsibilities and examining how such responsibilities can be met to the advantage of the corporation and society, ultimately arriving at the concept of strategic corporate social responsibility.

Non-Pecuniary Benefits

Although it’s difficult to separate out and quantify the effects of corporate social responsibility on firm performance, the effects on individuals can be measured directly by survey methodology. Therefore, we have better evidence of the non-pecuniary effects of corporate social responsibility than we have of corporate social performance. Corporate social responsibility is by definition about the corporation, but it is individuals who make decisions, carry out corporate social responsibility programs, and are affected by corporate actions. Stakeholders such as managers, employees, consumers, investors, and community members can shape and be shaped by corporate social responsibility activity and consequently often receive psychological benefits from their association with socially responsible corporations. The psychological benefits generated by these associations with the corporation are a component of the social value created by corporations that engage in corporate social responsibility.

Internal Stakeholders

Internal stakeholders include managers, employees, and board members, all of whom may affect or be affected by the firm’s social responsibility programs, processes, and reputation. Corporate social responsibility can be initiated by managers for personal reasons, including personal values, religious beliefs, commitment to social causes, professional image building, or a need to feel good about themselves (Hemingway & Maclagan, 2004 ). Manager-initiated corporate social responsibility can be either strategic or philanthropic, depending on the constraints of corporate governance, firm strategic orientation, and the availability of discretionary funds. Managers receive a psychological benefit when they can support their personal values, religious beliefs, or identity. It is common for large corporations to have social responsibility officers who shape the culture and reputation of the firm, maintain corporate social responsibility programs, and communicate to internal and external stakeholders. These executives have more opportunity to reap social and psychological benefits from corporate social responsibility.

In general, people desire to have meaning in their lives and often look for meaning in their work. Aguinis and Glavas ( 2019 ) explored how corporate social responsibility can help employees find meaning in their work. The closer the fit between the corporation’s identity and the employee’s identity, the more meaningful the work will seem. For example, a person who identifies as a caregiver will find meaningfulness in their work in a hospital. Corporate social responsibility programs provide additional information and experience that can help workers find more meaning in their work, that is, they may perceive that their work can serve a greater purpose.

Corporate social responsibility can affect employees’ perceptions and attitudes about their work and workplace. Gavin and Maynard ( 1975 ) tested the relationship between the employee’s perception of the corporation’s concern for the environment and the employee’s general satisfaction with their employment. They found that employees tended to report more satisfaction the greater the perceived corporate concern for the environment. Perhaps more telling, they found that the younger workers in the 1970s were most concerned about corporate environmentalism, which perhaps foretold increasing environmental awareness and activism.

Chong ( 2009 ) examined how participation in corporate social responsibility programs affect employee’s understanding and commitment to the corporation’s identity, where organization identity can be defined as “the set of meanings by which a company allows itself to be known and through which it allows people to describe, remember and relate to it” (Wheeler, Richey, Tokkman, & Sablynski, 2006 , p. 98). Chong found that participation in corporate social responsibility programs feeds off of and reinforces corporate identity, resulting in the employee experiencing higher motivation, satisfaction, and commitment to the corporation.

Mozes, Josman, and Yaniv ( 2011 ) studied the relationship between corporate social responsibility activity and both organizational identification (a driver of loyalty) and motivation to work. Workers in their study were classified as either active participants or non-active participants in volunteerism programs. Active participants demonstrated higher levels of organizational identification and motivation to work. To be most effective for external beneficiaries and most meaningful for the employees, corporate social responsibility must be embedded in the routines and processes of the organization (Aguinis & Glavas, 2013 ).

Meister ( 2012 ) found that 53% of workers surveyed by the nonprofit Net Impact reported that having a job where they can make a difference to society is important to their happiness. Further, 72% of students getting ready to enter the workforce also felt this way. According to Meister, to recruit and retain young top talent, corporations not only have to engage in corporate social responsibility, they must communicate their engagement through social media.

External Stakeholders

External stakeholders may be affected by the firm’s social responsibility programs, processes, or products, but as outsiders they do not affect these. External stakeholders include consumers, suppliers, investors, and community.

Consumers derive psychological value from purchasing socially responsible products. According to Green and Peloza ( 2011 ) there are three categories of benefit: emotional, social, and functional. Buying products from socially responsible companies allows consumers to feel good about themselves. This emotional response can be associated with companies that make charitable contributions to social causes. Consumers feels good about themselves (emotional benefit) for buying from a company that is altruistic. Alternatively, buying products from a socially responsible company can define the consumer as a good person to others and elevate their position in the community (social benefit). This social response can be associated with companies that champion a social cause such as environmental sustainability. Functional benefit comes from purchasing products that function better because of CSR attributes, such as fuel-efficient cars. The three types of benefit can work together and amplify each other. “For example, a hybrid vehicle can provide functional value (lower operating costs), emotional value (joy in saving or environmental stewardship), and social value (meeting relevant norms)” (Green & Peloza, 2011 , p. 52). For consumers to derive value from corporate social responsibility, they must be aware of it. Corporations traditionally used company reports, web pages, and advertising to make consumers aware of their corporate social responsibility but are now feeling pressure to communicate more broadly and often over social media.

Socially responsible investing provides psychological value to investors. According to Beal, Goyen, and Philips ( 2005 ), this value can take the form of “fun of participation” similar to what gamblers experience, or it can take the form of happiness similar to that generated by pleasurable activities. Psychological value augments the financial returns to socially responsible investments and helps explain the decision to invest in screened funds. According to Dam and Scholtens ( 2015 , p. 104), “consumers receive a warm-glow” when they invest responsibly.

Benefits to Investors

Investing in socially responsible firms, commonly referred to as socially responsible investing (SRI), is a way for investors to join their values and their desire for monetary gain. This has become easier for individual and institutional investors with the growth of mutual funds focused on socially responsible investing. At the start of 2018 there was over $30 trillion invested in socially responsible stock, with nearly half this amount held in Europe (Global Sustainable Investment Alliance, 2019 ). In the United States there are mutual funds that filter for social responsibility, allowing individual and institutional investors to encourage socially responsible corporations while withholding support from firms that engage in industries (such as gambling) or activities (such as genetic modification) that are not viewed as socially responsible. Because perceptions of what is socially responsible and what is not can vary, mutual fund managers develop screens to appeal to different viewpoints and choose stock of firms that meet the criteria of the screen but also meet the criteria for firm/stock performance. Several empirical studies comparing the returns to socially responsible funds and unrestricted funds have found that there is no systematic difference (e.g., Bauer, Koedijk, & Otten, 2005 ; Hamilton, Jo, & Statman, 1993 ; Sauer, 1997 ). In a meta-analysis of earlier studies, Revelli and Viviani ( 2015 , p. 158) found that “the consideration of corporate social responsibility in stock market portfolios is neither a weakness nor a strength compared with conventional investments.” On average the returns to SRI funds are the same as the returns to unrestricted funds, making SRI funds attractive to both individual and institutional investors because they combine competitive financial returns with psychological benefits (feeling good about oneself for being socially responsible).

Other avenues for socially responsible investing include individual stocks (with the opportunity to engage directly with the corporation) and community development financial institutions which engage in socially responsible investing by providing loans to small businesses in low-income, at-risk communities who otherwise would not have access to financing (Schueth, 2003 ).

Corporate social responsibility is a well-researched and thoroughly discussed topic. While there is general consensus among researchers and commentators that corporations have responsibilities to society that go beyond profit maximization, what those responsibilities are and how they should be met are still open questions. Stakeholder theory, Carroll’s pyramid of corporate responsibilities, micro-economic theory of the firm, altruistic and strategic corporate social responsibility, corporate self-regulation, political corporate social responsibility, corporate environmentalism, and sustainability all offer insights into the responsibilities of corporations and how those responsibilities may be met.

When viewed from the perspective of the firm, the evidence of corporate social responsibility has generally been about the link between corporate social performance and financial performance or firm value, with mixed results. But financial effects are not the only effects of corporate social responsibility. Individuals experience psychological effects that are also a part of the social good created by socially responsible corporations. Researchers have reported significant effects, including:

Workers find meaning in their work and experience higher motivation, satisfactionm and commitment to the firm.

Consumers feel good about themselves.

Investors get a warm glow from supporting socially responsible firms.

We have abundant information about what is and isn’t corporate social responsibility, how corporate social responsibility benefits corporations and individuals, and how investors can encourage socially responsible corporations and discourage irresponsible corporations. However, we know less about how corporations can address social problems such as human rights, justice, poverty, and environmental sustainability and next to nothing about the record of corporate social responsibility in addressing such social problems.

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Home — Essay Samples — Sociology — Social Responsibility — Corporate Social Responsibility in Business

Corporate Social Responsibility in Business

• Categories: Social Responsibility

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Published: Jan 31, 2024

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Table of contents

1. the concept of csr, 2. benefits of csr in business, 3. implementing csr initiatives, 4. examples of successful csr practices in business, 5. challenges and criticisms of csr in business, 6. future trends and the role of csr in business sustainability, 7. conclusion, references:.

• Cone Communications and Ebiquity survey - "2015 Cone Communications/Ebiquity Global CSR Study"
• Nielsen survey - "The sustainability imperative: New insights on consumer expectations"
• PwC study - "The purpose effect: Building business by inspiring employees"
• Deloitte survey - "The Deloitte Millennial Survey 2017"

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5 Examples of Corporate Social Responsibility That Were Successful

• 06 Jun 2019

Business is about more than just making a profit. Climate change, economic inequality, and other global challenges that impact communities worldwide have compelled companies to be purpose-driven and contribute to the greater good .

In a recent study by Deloitte , 93 percent of business leaders said they believe companies aren't just employers, but stewards of society. In addition, 95 percent reported they’re planning to take a stronger stance on large-scale issues in the coming years and devote significant resources to socially responsible initiatives. With more CEOs turning their focus to the long term, it’s important to consider what you can do in your career to make an impact .

Access your free e-book today.

What Is Corporate Social Responsibility?

Corporate social responsibility (CSR) is a business model in which for-profit companies seek ways to create social and environmental benefits while pursuing organizational goals, like revenue growth and maximizing shareholder value .

Today’s organizations are implementing extensive corporate social responsibility programs, with many companies dedicating C-level executive roles and entire departments to social and environmental initiatives. These executives are commonly referred to as a chief officer of corporate social responsibility or chief sustainability officer (CSO).

There are many types of corporate social responsibility and CSR might look different for each organization, but the end goal is always the same: Do well by doing good . Companies that embrace corporate social responsibility aim to maintain profitability while supporting a larger purpose.

Rather than simply focusing on generating profit, or the bottom line, socially responsible companies are concerned with the triple bottom line , which considers the impact that business decisions have on profit, people, and the planet.

It’s no coincidence that some of today’s most profitable organizations are also socially responsible. Here are five examples of successful corporate social responsibility you can use to drive social change at your organization.

5 Corporate Social Responsibility Examples

1. lego’s commitment to sustainability.

As one of the most reputable companies in the world, Lego aims to not only help children develop through creative play, but foster a healthy planet.

Lego is the first, and only, toy company to be named a World Wildlife Fund Climate Savers Partner , marking its pledge to reduce its carbon impact. And its commitment to sustainability extends beyond its partnerships.

By 2030, the toymaker plans to use environmentally friendly materials to produce all of its core products and packaging—and it’s already taken key steps to achieve that goal.

Over the course of 2013 and 2014, Lego shrunk its box sizes by 14 percent , saving approximately 7,000 tons of cardboard. Then, in 2018, the company introduced 150 botanical pieces made from sustainably sourced sugarcane —a break from the petroleum-based plastic typically used to produce the company’s signature building blocks. The company has also recently committed to removing all single-use plastic packaging from its materials by 2025, among other initiatives .

Along with these changes, the toymaker has committed to investing $164 million into its Sustainable Materials Center , where researchers are experimenting with bio-based materials that can be implemented into the production process.

Through all of these initiatives, Lego is well on its way to tackling pressing environmental challenges and furthering its mission to help build a more sustainable future.

Related : What Does "Sustainability" Mean in Business?

2. Salesforce’s 1-1-1 Philanthropic Model

Beyond being a leader in the technology space, cloud-based software giant Salesforce is a trailblazer in the realm of corporate philanthropy.

Since its outset, the company has championed its 1-1-1 philanthropic model , which involves giving one percent of product, one percent of equity, and one percent of employees’ time to communities and the nonprofit sector.

To date, Salesforce employees have logged more than 5 million volunteer hours . Not only that, but the company has awarded upwards of $406 million in grants and donated to more than 40,000 nonprofit organizations and educational institutions.

In addition, through its work with San Francisco Unified and Oakland Unified School Districts, Salesforce has helped reduce algebra repeat rates and contributed to a high percentage of students receiving A’s or B’s in computer science classes.

As the company’s revenue continues to grow, Salesforce stands as a prime example of the idea that profit-making and social impact initiatives don’t have to be at odds with one another.

3. Ben & Jerry’s Social Mission

At Ben & Jerry’s, positively impacting society is just as important as producing premium ice cream.

In 2012, the company became a certified B Corporation , a business that balances purpose and profit by meeting the highest standards of social and environmental performance, public transparency, and legal accountability.

As part of its overarching commitment to leading with progressive values, the ice cream maker established the Ben & Jerry’s Foundation in 1985, an organization dedicated to supporting grassroots movements that drive social change.

Each year, the foundation awards approximately $2.5 million in grants to organizations in Vermont and across the United States. Grant recipients have included the United Workers Association, a human rights group striving to end poverty, and the Clean Air Coalition, an environmental health and justice organization based in New York.

The foundation’s work earned it a National Committee for Responsive Philanthropy Award in 2014, and it continues to sponsor efforts to find solutions to systemic problems at both local and national levels.

Related : How to Create Social Change: 4 Business Strategies

4. Levi Strauss’s Social Impact

In addition to being one of the most successful fashion brands in history, Levi’s is also one of the first to push for a more ethical and sustainable supply chain.

In 1991, the brand created its Terms of Engagement , which established its global code of conduct regarding its supply chain and set standards for workers’ rights, a safe work environment, and an environmentally-friendly production process.

To maintain its commitment in a changing world, Levi’s regularly updates its Terms of Engagement. In 2011, on the 20th anniversary of its code of conduct, Levi’s announced its Worker Well-being initiative to implement further programs focused on the health and well-being of supply chain workers.

Since 2011, the Worker Well-being initiative has been expanded to 12 countries and more than 100,000 workers have benefited from it. In 2016, the brand scaled up the initiative, vowing to expand the program to more than 300,000 workers and produce more than 80 percent of its product in Worker Well-being factories by 2025.

For its continued efforts to maintain the well-being of its people and the environment, Levi’s was named one of Engage for Good’s 2020 Golden Halo Award winners, which is the highest honor reserved for socially responsible companies.

5. Starbucks’s Commitment to Ethical Sourcing

Starbucks launched its first corporate social responsibility report in 2002 with the goal of becoming as well-known for its CSR initiatives as for its products. One of the ways the brand has fulfilled this goal is through ethical sourcing.

In 2015, Starbucks verified that 99 percent of its coffee supply chain is ethically sourced , and it seeks to boost that figure to 100 percent through continued efforts and partnerships with local coffee farmers and organizations.

The brand bases its approach on Coffee and Farmer Equity (CAFE) Practices , one of the coffee industry’s first set of ethical sourcing standards created in collaboration with Conservation International . CAFE assesses coffee farms against specific economic, social, and environmental standards, ensuring Starbucks can source its product while maintaining a positive social impact.

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

The Value of Being Socially Responsible

As these firms demonstrate , a deep and abiding commitment to corporate social responsibility can pay dividends. By learning from these initiatives and taking a values-driven approach to business, you can help your organization thrive and grow, even as it confronts global challenges.

Do you want to gain a deeper understanding of the broader social and political landscape in which your organization operates? Explore our three-week Sustainable Business Strategy course and other online courses regarding business in society to learn more about how business can be a catalyst for system-level change.

This post was updated on April 15, 2022. It was originally published on June 6, 2019.

About the Author

Corporate Social Responsibility Strategies Essay

Introduction, list of references.

Globalized and local entities have held the concepts of Corporate Social Responsibility (CSR) in order to achieve varied business objectives that match the current dynamic markets. This paper focuses on the different strategies used by organizations that chose to work with local communities, and their effectiveness in conducting themselves as corporate and global entities.

According to IISD (2011), CSR is the internal enactment of regulating policies, which ensures that the involved organization conforms to the legal, social, environmental, and ethical concerns of the society. Numerous organizations have realized the importance of practicing CSR in enhancing their market share and the overall public perception.

CSR involves the utilization of set standards within the company to ensure that the company acts responsibly and meets the aforementioned requirements.

Quality is one of the ways through which an organization can express its commitments to CSR (Calabrese 2004). It means that the involved organization care for its clients hence endeavours to serve them with the best. CSR is an in-built drive governed and steered with appropriate policies through viable business models.

Focusing on the different strategies used by organizations working with local communities, and their effectiveness to conduct themselves as corporate and global citizens

Viable CSR starts with mutual cooperation with communities to enhance equality, impartiality, and nurturing of the unique potentials presented by different individuals. Creating regulations that enhance adherence to ethical and human rights concerns is critical within organizations. CSR endures to achieve both internal and external compliances to the moral demands of the society.

This is achievable through stringent observation of the self-regulative policies and ratification of competitive business models within the organization. CSR strives to capture the community with ethical products and by-products that do not disfavour the community (Bidgoli 2006). It relates to the aspects of sustainable development where the industrial activities of today do not compromise the survival of tomorrow’s generation. Most organizations have formulated a unique approach to CSR as indicated in a while.

Such companies have long-term strategies to ensure their compliance with the legal, ethical, social, and environmental demands of the concerned societies. For example, GM Motors strives to provide the society with due comfort as one drives with a guaranteed safety on the roads (Schwartz 2011).

As a strategy, policies and business models that ensure the achievement of these provisions constitute the ethical and legal aspects of CSR. In this context, the organizations have developed safety mechanisms to guarantee this provision.

To improve the safety skills of a community, most organizations have organized education on issues affecting proper living. This aspect indicates the significance of CSR and its contribution to the corporate schemes (ETATS-UNIS 2007).

Providing the society with quality products is one of the ethical concerns of CSR. It is the mandate of the concerned organization to achieve value for money. Additionally, it is ethical to produce quality products that will eventually impress clients. Most organizations are in the forefront in quality provision.

Additionally, most organizations understand the benefits of quality products not only to the clients but also to the company’s growth (Stoian & Zaharia 2012). The strategies used by organizations working with local communities to embrace quality have been lucrative to the concerned entities.

The aspects of quality contribute vividly in the attainment of CSR objectives as mentioned earlier. Organizations focus on the product quality, excellence, and management quality (IISD 2011). These efforts eventually influence the company’s growth with successful results.

As another strategy, most organizations enhance the success of the society through ample impacts of CSR. The sustainable and profitable expansion of the company indicates economic sensitivity to the society. Nissan’s conformity to the international legal requirements, ethical issues within the industry, and environmental concerns form the substantial aspects in the realms of embracing CSR.

This provision contributes to the company’s CSR achievement. Most organizations trust the concerns of the public and endeavor in their capacity to ensure that the public attains their ethical rights for a sustainable development (Hunter & Piltzecker 2003). Recognizing the significance of every stakeholder in the operational context is a crucial phenomenon in most companies.

Thus, the company strives to attain beneficial management practices as it endures to conform to the demands of the CSR and dynamic world markets. It is evident that the integration of the CSR principles into the company operation enhances the aspects of compliance demanded.

Precisely, CSR endures to manage the viable business processes in order to inflict a remarkable impact on society. Another example is that Coca Cola Company has strived to achieve its objective through integration of CSR within their systems as a major regulatory factor.

The concepts of CSR demand socially sensitive regulations that hardly hinder projects meant to favor the well-being of the society. The efforts to provide striking products to customers with elegant services are major objectives of most organizations.

Nissan Motors; nonetheless, this does not compromise its goodwill for the society. Instead, the aspect has increased the humanitarian support to ensure that the company grows together with the society (Dahlsrud 2008). As a strategy, most organizations have focused on the humanitarian aids, educational support, and the environmental fortification.

For instance, as a policy of the company, Starbucks Company liaises with humanitarian organizations in order to reach varied masses globally. Its contributions to the society on charitable grounds are remarkable.

Additionally, the company emphasizes on the education of the current children for a sustainable future development (PROBST 2010). It is a business law to integrate such CSR principals within the business models in order to achieve full impact (Banerjee 2007).

CSR fronts numerous benefits to an organization that have established and ratified its principles. This is crucial in earning the public trust on operational and business grounds. One advantage of CSR in governance is the ability to develop competitive advantages over other contenders following its impacts on the society (IISD 2011).

CSR manages to enact social, ethical, economic, and environmental values in the organization. It is crucial to agree that CSR is no longer a mere provision in most organization but rather a necessity for sustainable development within the organization (Mullerat & Brennan 2010, P. 317).

Evidently, organizations have set their core CSR areas to help them realize its mandates to the public. It is crucial to agree that CSR contributes immensely to the corporate strategies and governance since it reshapes concerned organizations in the realms of their operations and service to the people.

Most organizations have incorporated the CSR principles as any other policies within their business models. This effort benefits the company in achieving its corporate objectives with limited hindrances. Organizations have varied economic, societal, and environmental strategies depending on their mission and passion for the society.

It is crucial to recognize individual/corporate strategies in order to design appropriate CSR objectives. Nonetheless, CSR has numerous benefits to both the concerned organization and society, which it serves. While considering the social objectives of CSR, the involved corporate will observe the issues relating to education, public services, rejuvenation, and workers volunteering.

Precisely, the concerned organization will observe the social aspects of the public upon ratifying the CSR principles. This provision is evident in Pepsi company following its passion to give back to the public (Egan & Mather 2005). The significance of CSR in this context is its ability to mould the company’s operations to observe the ethical and social aspects in its service delivery.

Eventually, most organizations incorporate CSR principles in their endeavors as mentioned earlier. The economic contributions of CSR relates to the issues of jobs, business principles, and product value (IISD 2011). Organization that observes CSR in this aspect will ensure that their products have the recommended value commensurate to their prices.

Contextually, General Electric Company (based in the U.S.) has observed the issues of the product value earning it a massive competitive advantage. Thus, CSR will force the concerned organization to enact business processes with positive influence on the society as indicated before (Beurden & Go¨ssling, 2008).

CSR is a self-regulating phenomenon whose benefits forces any given company to consider the concerns of its surrounding. Any responsible organization will embrace the aspects of CSR voluntarily since its benefits are bountiful. Attaining a positive public perception is a remarkable achievement for any organization aiming to expand its market territories.

As a strategy, most organizations have put varied strategies to ensure that they enact viable CSR in their daily operation (Hillenbrand, Money & Ghobadian 2013). The company has a globalized fame emerging from its competitive automobiles and participation in numerous global social events and policymaking. It is crucial to consider and understand the concepts of CSR in the Nissan’s context.

This is achievable by dividing its participation into several units that have added to the achievement of its CSR goals independently (Egan & Mather 2005). Numerous corporations have realized substantial profits in their business upon the ratification of viable CSR policies within their business models.

This incorporated the enactment of policies that considered the public interest and the current global demands in the realms of environment protection and economic intensification for poverty suppression (Borchgrave 2001).

As a strategy, most organizations have developed numerous key CSR areas to help them achieve their strategic goals in the realms of business and service provision to the society. To conform to the demands of CSR, companies have developed a philosophy that establishes a safe coexistence amid the society and nature.

In their endeavours, they strive to attain a sustainable and mobile society with limited adverse effects to the environment. Evidently, CSR endures to protect the interest of the society.

Most organizations have observed this demands hence established self-regulating policies that ensure a viable and sustainable environment (Nissan 2011). Despite the companies’ desire to attain huge returns, they prioritize the issues relating to the environment. Companies have identified three principal areas to achieve this mandate (Jakobsson & Ramzan 2008).

Firstly, most institutions endure to reduce the emission of CO2 and CO gases through the production of environmental friendly commodities. The emergence of new technologies forces organizations to reinvent vehicles that hardly utilize fossil fuels known to pollute the environment upon combustion.

This occurs besides the efforts to produce motors that hardly emit the known dangerous gases to the environment (Nissan 2011). Additionally, the company mandates to provide automobiles that would help in protecting the air, soil, and water among other lucrative resources. This will help the current and future generation in attaining a sustainably environment for other coming generations.

Establishing, developing, and championing these environmentally responsive technologies are core in this context. It is through technologies that the organization realizes its CSR through appropriate business models (Fischer 2009). Lastly, Nissan recycles numerous resources to ensure an efficient but sparing use of the available resources. This ensures little or no wastage of resources.

Most organizations have achieved their global might and business prevalence by fostering the individuality that exists amid employees and the society at large. Realizing the benefits of workforce diversity, and its impacts to the society are critical. Besides harnessing individual potentials, employees feel ethically valued hence ready to work and propel the company further (EC-COUNCIL PRESS 2011).

The diversity within the Nissan’s workforce fraternity is its driving force meant to achieve its client’s demands and attain a sustainable growth. As demanded by its CSR policies, the company has respect for diversity, creates a learning culture, embraces internal communication, and builds ambient workplaces (GEVA 2008).

These achievements have met the international standardization requirements regarding the establishment and ratification of CSR (Grünewälder, 2008).

As another strategy, numerous organizations dedicate their economic achievements to the society through ample impacts of CSR. The sustainable and profitable expansion of the company indicates economic sensitivity to the society. Nissan’s conformity to the international legal requirements, ethical issues within the industry, and environmental concerns form the substantial aspects in the realms of embracing CSR.

This provision contributes to the company’s CSR achievement. Nissan trusts the concerns of the public and endeavors in its capacity to ensure that the public attains their ethical rights for a sustainable development (Hunter & Piltzecker 2003). Recognizing the significance of every stakeholder in the operational context is a crucial phenomenon in most companies.

Thus, the company strives to attain beneficial management practices as it endures to conform to the demands of the CSR and dynamic world markets. It is evident that the integration of the CSR principles into the company operation enhances the aspects of compliance demanded. Precisely, CSR endures to manage the viable business processes in order to inflict a remarkable impact on society (Fifka 2013).

CSR is a critical provision in most organization meant to enact self-regulating policies. Most organizations strive to comply with the lawful, societal, ethical, fiscal, and environmental concerns in order to achieve their business objectives. CSR is voluntary requirement with its principles helping in conforming to the mentioned provisions with limited hindrance.

Contextually, most organizations have enacted CSR in numerous aspects ranging from their environmental concerns to the philanthropic passions. Organizations that chose to work with local communities employ different strategies.

The aspects of the society, environmental safety, quality, goodwill, internal governance, and promoting CSR through the value chain similarly demonstrate the concepts of CSR at the organizational level. CSR has numerous benefits, and it contributes immensely to the corporate success.

Banerjee, S2007, Corporate social responsibility: The good, the bad and the ugly, Edward Elgar, Cheltenham, UK.

Beurden, P. & Go¨ssling, T 2008, ‘The Worth of Values – A Literature Review on the Relation between Corporate Social and Financial Performance’, Journal of Business Ethics, vol. 82, is. 1, pp. 407–424.

Bidgoli, H 2006, Handbook of Information Security Volume 3 , John Wiley & Sons, Hoboken.

Borchgrave, A 2001, Cyber threats and information security: meeting the 21st century challenge , CSIS Press, Washington, D.C.

Calabrese, T 2004, Information security intelligence: cryptographic principles and applications , Delmar Learning, Clifton Park, NY.

Dahlsrud, A 2008, ‘How corporate social responsibility is defined: an analysis of 37 definitions. Corp. Soc. Responsib. Environ. Mgmt, vol. 15, no. 1, pp. 1–13.

Egan, M & Mather, T 2005, The executive guide to information security: threats, challenges and solutions , Addison-Wesley, Indianapolis.

ETATS-UNIS 2007, Department of defense sponsored information security research: new methods for protecting against cyber threats , Wiley publishing, Indianapolis (Ind.).

Fifka, M 2013, ‘Corporate Responsibility Reporting and its Determinants in Comparative Perspective’, Review of the Empirical Literature and a Meta-analysis Journal, vol. 22, no. 1, pp. 1–35.

Fischer, A 2009, Creating a national framework for cybersecurity: an analysis of issues and options , Nova Science Publishers, New York.

GEVA, A 2008, ‘Three Models of Corporate Social Responsibility: Interrelationships between Theory, Research, and Practice’, Business and Society Review , vo. 113, no. 1, pp. 1–41.

Grünewälder, A 2008, Corporate social responsibility: Implementation in German companies, GRIN Verlag GmbHm, München.

Hillenbrand, C., Money, K & Ghobadian, A 2013, ‘Unpacking the Mechanism by which Corporate Responsibility Impacts Stakeholder Relationships’, British Journal of Management , vol. 24, no. 1, pp. 127–146.

Hunter, E & Piltzecker, T 2003, MCSE exam 70-296 planning, implementing and maintaining a Windows Server 2003 environment for an MCSE certified on Windows 2000: study guide & DVD training system , Syngress Pub, Rockland, MA.

IISD (International Institute for Sustainable Development) 2011, Corporate social responsibility (CSR). Web.

Jakobsson, M & Ramzan, Z 2008, Crimeware: understanding new attacks and defenses , Addison-Wesley, Upper Saddle River, NJ.

Mullerat, R & Brennan, D 2010, Corporate social responsibility: the corporate governance of The 21st century , Kluwer Law International, Alphen.

Nissan 2011, Nissan’s Approach to CSR . Web.

Schwartz, M 2011, Corporate social responsibility: An ethical approach, Broadview Press, Peterborough.

Stoian, C & Zaharia, R 2012, ‘CSR development in post-communist economies: employees’ expectations regarding corporate socially responsible behaviour – the case of Romania’, Business Ethics: A European Review, vol. 21, no. 1, pp. 380–401.

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• 10 Business Benefits of Corporate Social Responsibility (CSR)

In today’s business climate, it’s not enough for companies to produce great products at reasonable prices. Customers and employees alike expect the companies they do business with to use their resources and influence to bring positive change to the world. In this article, we will highlight the benefits of CSR (corporate social responsibility) and why companies should make this strategy a focus. 

Many employees believe that it’s no longer acceptable for a company to solely focus on making profits; it must also positively impact society. This approach is known as corporate social responsibility (CSR) . 

Guest of the Team Building Saves the World podcast, Stewart Downey, explains CSR like this:

“The idea is that a company that wants to give back to the community, nonprofits, or charities across the local, national, or global level can do so by adding a CSR effort for their team. It also means that it gives their employees a chance to volunteer and give back too.”

What Is CSR, and Why Is It Important?

Corporate social responsibility is the concept of incorporating philanthropy, ethics, and activism into business practices to benefit both society and the company itself. Adopting a CSR strategy also helps corporations build closer relationships with their employees and customers. 

There are four major types of CSR:

Environmental CSR: This facet encompasses a company’s efforts to reduce its impact on the environment such as ending investment in fossil fuels. Other examples of the environmental benefits of CSR include:

• Clean water initiatives
• Pollution cleanup
• Reducing waste

Ethical CSR: Ethical considerations involve measures a company takes to ensure that its business practices are fair. Refusing to purchase materials produced by child labor is an example of an ethical CSR response.

Philanthropic CSR: Philanthropy represents a company’s efforts to give back through charitable donations, fundraising events, and more. An example of philanthropic CSR would be organizing a fundraiser for a charity.

Economic CSR: This type of CSR involves financial sacrifices a company makes to ensure things like fair pay and sustainable business practices. Executives who divert a part of their salary into profit-sharing are practicing economic CSR. 

Talking about the importance of CSR, Bailey Goldstein, Creative Director of TeamBondingCSR, says, for brands “your image matters, who you are matters, and what you do matters.” 

In other words, businesses can no longer be just about business. They must also take on a certain level of social responsibility because it matters to their customer base, employees, and the community.

10 Advantages and Benefits of CSR

The full benefits of CSR are innumerable, but let’s look at ten of the most widely recognized advantages of social responsibility: 

1. Increased Brand Recognition

Tapping into the zeitgeist with a socially-conscious CSR effort can bring your brand to the attention of people who may have otherwise never heard of it. 

People are hungry for positive stories. If you associate your brand with positive social and political change, you can earn the type of media coverage you can’t buy from advertisers. 

2. Boosted Company Reputation

Recognition isn’t worth much if your reputation is tarnished. Lending a helping hand, making sacrifices in the name of fairness, and engaging in sustainable business practices paint your organization as worthy of its growing recognition among consumers.

3. Bolstered Public Trust

Once your reputation for CSR work is established, you can’t rest on your laurels. Many consumers intrinsically don’t trust corporations and think they’re “just in it for the money.” 

By supporting community initiatives with ongoing funding and producing public proof of your egalitarian organizational principles, you can keep the trust you earned by building yourself as a socially responsible brand. And that trust goes a long way. In fact, highly trusted companies outperform others by up to 400% in market value according to Harvard Business Review .

4. Improved Customer Loyalty

If you can show that you give back, customers are willing to come back repeatedly. A study by Statista found that 70% of customers are more loyal to companies that showcase CSR efforts.

Something as simple as hosting a fundraising event for a local food bank can reinforce the public perception that you have the community’s back and encourage the community to have yours. 

5. Accelerated Capital Growth

If you’re boosting your brand, enhancing your reputation, gaining public trust, and inspiring customer loyalty, this may positively impact your bottom line. Positioning yourself as “part of the team” gives you a chance to reach a wider customer base and price your products and services with a social consciousness premium. 

Additionally, social responsibility initiatives are a smart move for businesses looking for funding. More than 70% of investors are more likely to invest in a brand dedicated to social and environmental good.

6. Deepened Competitive Advantage

Maintaining a reputation as a giving, grateful, and socially conscious organization is not an approach every business takes. 

When you adopt a CSR strategy, you set your business apart from more seemingly traditional concerns that are “all about the money.” By earning more community trust, you can position yourself as the preferred option in any saturated market.

7. Employee Retention Rates

Today’s employees find fulfillment in working for a socially responsible company, which means your CSR efforts will make them less likely to quit. According to study by Porter Novelli , 95% of employees who work for purpose-driven companies report that they are more loyal to their employer. 

With employee retention being more difficult to achieve than it’s been in a generation, refusing to address CSR concerns can have a caustic effect on your company’s ability to attract and keep top talent . 

8. Invigorated Employee Engagement

Your motivation to make a difference in society motivates your employees to engage more in their work. In a whitepaper published by America’s Charities, CSR practices are directly linked to improved job performance and productivity among employees. Due to this increase in employee retention rates and engagement, companies also stand to benefit from reduced costs.  

9. Revitalized Relationship Building

Whether it’s with your customer base, workforce, business associates, or the world at large, strong CSR efforts will help you forge relationships that can be beneficial to everyone involved.

The benefits of CSR to companies may be larger than you’d expect. 

Stuart Goldstein described this on the same Team Building Saves the World podcast when he pointed out that “it’s actually something that consumers are looking for.” 

“More than 50% of consumers are willing to pay more for a product or service if the business prioritizes sustainability. These are all things that companies need to think about if they want to be successful in the future.”

10. Greater Sustainability

Destroying the environment will ultimately negatively impact your business, so environmental CSR makes sense in a real way. However, it also makes economic sense. 

Transitioning to sustainable options can require some large upfront costs, but sustainable systems tend to be cheaper to operate over the long run. As fuel and other inputs inevitably get more expensive, companies that transition away from costly technologies first will see the greatest financial advantage. 

Hit Your Social Impact Goals with TeamBondingCSR

Now that you know the benefits of CSR for your organization, you’re probably wondering how exactly to incorporate its concepts into your business practices. 

TeamBondingCSR has the expertise and the experience to accrue the benefits of CSR for your company.

CSR Management

Instead of creating your own CSR team and spreading your workforce thin in the process, you can hire our CSR management team to tackle the task for you. 

TeamBondingCSR can assess your company’s values, needs, and goals through a simple four-step process to create the right CSR plan for your organization. We’ll provide you with hard data to prove the effectiveness of your organization’s new CSR strategy. We make it easy for you to get the benefits of corporate social responsibility.

Employee Volunteer Programs

One of the best ways to incorporate CSR into your business practices is volunteering time to nonprofit organizations. However, the logistics behind these efforts can be daunting and too complex to handle in-house.

Between finding the perfect charitable organization, picking the right event, and managing your budget, things can get stressful if you choose to do it all alone. To alleviate the stress, TeamBuildingCSR can provide you with a wide selection of volunteer kits that simplify this process and save you time. 

Build-It-Yourself Volunteer Kits

If you’d like a bit more creative control with your employee volunteer programs, you can try a build-it-yourself volunteer kit . TeamBondingCSR will coordinate with the charity or nonprofit of your choice to make sure you have everything you need to successfully implement a team building volunteer event. This includes shipping all relevant materials and tools to your headquarters or individual team members.

All you do is select an activity and a nonprofit, and we’ll do the rest.

Reap the Benefits of CSR

In conclusion, corporate social responsibility is a crucial aspect of modern business and promotes long-term success. By implementing CSR initiatives, companies not only help build a better future, but enhance their reputation among both their consumers and employees. The benefits of corporate social responsibility are endless.  If you’re interested in learning more about the benefits of CSR, check out our CSR page , or contact us today and we’ll be happy to answer all of your questions. 

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• Original article
• Open access
• Published: 05 July 2016

Corporate social responsibility research: the importance of context

• Carol A. Tilt 1  

International Journal of Corporate Social Responsibility volume  1 , Article number:  2 ( 2016 ) Cite this article

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There has, in recent times, been an increasing interest in understanding corporate social (and environmental) responsibility (CSR) and, in particular, CSR reporting in developing countries. However, many of these studies fail to investigate fully the contextual factors that influence CSR and reporting in those countries, preferring to rely on theories and hypotheses developed from studies undertaken in the West, particularly the US, UK and Australasia.

It may be argued that this is appropriate as many emerging economies are experiencing growth and moving towards having a more market-based orientation. Notwithstanding this, a large number of these countries have an entirely different socio-political environment, with different political regimes, legal systems and cultural influences. These factors have a significant effect on the applicability of theories such as stakeholder theory, legitimacy theory and accountability theory, which are commonly used to explain the phenomenon of reporting.

In State Capitalist countries, such as China, an important influence on companies is the political ideology that underpins the nation’s government. The nature and impact of ideology and hegemony in China has been under-studied and, therefore, investigating how the ideology, and competing forces that may mitigate its influence, manifest themselves in Chinese reporting are essential. In the Middle East, countries such as Saudi Arabia have no free press, are ruled by a royal family, have a market dominated by the oil industry, and potential religious influences. Such socio-cultural differences mean societies develop different understandings of concepts such as sustainability and social responsibility. Finally, countries such as Sri Lanka have some similarities to other developing countries, but their economy is set against a background of a recent civil war – operating in a post-conflict economy is a factor rarely considered in social and environmental disclosure, yet has important influence on policy in these areas.

This paper discusses three contextual issues that warrant more and improved consideration in CSR research, with particular emphasis on CSR reporting research.

More and more corporations worldwide are involved in corporate social responsibility activities, and as a result are providing more social and environmental information to the public. Following from this, CSR disclosure, or reporting, has become one of the major fields of investigation by accounting scholars (Deegan 2009 ; Mathews 1997 ; Tilt 2001 ). Research that considers both CSR activity and CSR reporting has traditionally focused on companies in more developed economies, predominantly the US, UK, Australia and New Zealand (Burritt and Schaltegger 2010 ; Frost et al. 2005 ; Gray 2006 ; Gurvitsh and Sidorova 2012 ; Othman and Ameer 2009 ; Patten 2002 ; Sahay 2004 ), but recently there has been increasing interest in understanding the phenomenon in developing countries particularly as they experience growth and move towards a more capitalist orientation (Sumiani et al. 2007 ). Of the research that does exist, a number of papers suggest that ‘country’ is a determinant for CSR involvement and for the level of disclosure, but do not go much further.

Many of the studies of developing countries however, choose a framework for their investigation based on those shown to be meaningful for explaining disclosure in developed, capitalist economies. That is, they fail to investigate fully the contextual factors that influence firms and their reporting in those countries that have a different social, political, legal and/or cultural context.

It may be argued that this is appropriate as many emerging economies are experiencing growth and moving towards having a more market-based orientation. However, this is rarely acknowledged or questioned in these papers. Yet, it is reasonable to suggest that these factors have a significant effect on the applicability of theories such as stakeholder theory, legitimacy theory and accountability theory, which are commonly used to explain the phenomenon of reporting.

The majority of the world’s population lives in developing countries and each country experiences its own unique social, political and environmental issues (United Nations 2013 ). These countries are in the process of industrialisation and are often characterised by unstable governments, higher levels of unemployment, limited technological capacity, unequal distribution of income, unreliable water supplies and underutilised factors of production. As a result of rapid industrial development, policies are pursued that aim to attract greater foreign investment, and the investors are often keen to start benefitting from fiscal incentives and cheap labour. While these strategies make economic sense, they have adverse social and environmental effects, including the use of child labour, low or unpaid wages, unequal career opportunities, occupational health and safety concerns, and increased pollution.

In a review of the literature on determinants of CSR reporting (Morhardt 2010 ), reports that research on the impact of different variables in different regions is inconclusive due to the lack of enough studies. Factors that may influence CSR disclosure practices fall broadly into internal and external (Fifka 2013 ; Morhardt 2010 ), but are commonly classified further as (Adams 2002 : p224):

Corporate characteristics, such as size, industry group, financial/economic performance and share trading volume, price and risk;

General contextual factors, such as country of origin, time, specific events, media pressure, stakeholders and social, political, cultural and economic context; and

Internal contextual factors, including different aspects of corporate governance.

While CSR reporting has been studied by a large number of scholars, only a few fall into the second of the categories above, and consider context in detail. This is particularly relevant when considering developing countries. A few papers have specifically reviewed studies on developing countries. For example, (Belal and Momin 2009 ) categorise the work on developing countries into three groups: studies of the volume or extent of reporting; studies of the perceptions of CSR reporting by managers; and studies of the perception of CSR reporting by stakeholders. In all the studies reviewed there is little discussion of the context, other than a description of the country, and no real thought about the theoretical assumptions being made.

This paper presents a discussion of the different contextual issues or factors that show some evidence or potential to influence CSR and reporting in developing countries. It focusses on three specific issues and provides a research agenda for future consideration of the influence of context in CSR reporting research. The paper is structured as follows. The next section introduces some broad contextual factors that warrant consideration in the literature on CSR reporting. Next, three specific contextual issues are examined: the role of political ideology and hegemony; the influence of cultural understandings; and the impact of historical economic context. Finally, by way of conclusion, some recommended areas for further research are suggested.

Contextual considerations

Adams ( 2002 ) talks about the social, political, cultural and economic context, so some consideration of what this might mean is needed as each of these concepts themselves cover a variety of aspects, and indeed overlap. While papers may talk about the ‘social context’ in which the companies being examined operate, this is not well defined and little consideration is given to what this means. Some things that could be more explicitly considered include, inter alia : the role of the press; the status of women; the legal/justice system; the level of corruption; the level of government control, cultural understandings; and so on. This paper chooses to highlight three of these areas, and these are discussed briefly below in broad terms, followed by a discussion of some specific aspects of each identified as providing fertile grounds for future research.

Political system

Assumptions are often made about capitalist systems, whether explicit or implicit, as the vast majority of work on CSR reporting has been done in the Western context. However, there is little research looking at CSR reporting in socialist or communist countries. Some work has been undertaken on China (Dong et al. 2014 ; Gao 2011 ; Situ and Tilt 2012 ), but this work often applies the same conceptual frameworks as Western studies. What about the influence of ideology, and hegemony?

Sociocultural environment

Human beings have “distinctive cultural (learned) characteristics, histories and responses to their environment” and the term ‘sociocultural’ is commonly used in anthropological research to describe these and the “interactions and processes” that this involves (Garbarino 1983 : p1). Some general studies of culture and CSR using Hofstede exist (Silvia and Belen 2013 ), but an in-depth analysis of different understandings and conceptions of terms such as CSR as a result of sociocultural influences is lacking. The work that does examine specific factors often suggests that the Western concept of CSR does not fit these contexts (Wang and Juslin 2009 ).

The majority of work that considers sociocultural factors has looked mainly at religious aspects of CSR, most commonly by reviewing reporting by Islamic organisation, such as Islamic banks (Maali et al. 2006 ; Siwar and Hossain 2009 ; Sudarma et al. 2010 ). The teachings of many religions focus on social responsibility, the relationship with the natural environment, treatment of others, fairness, justice, etc., so there is a natural expectation that religion-based organisations may be more likely to engage in CSR and CSR reporting. A more nuanced consideration of how this manifests itself in different societies would improve understanding of the drivers and motivations of these activities. Similarly, other sociocultural factors, such as national identity, values, social organisation and language, could be incorporated.

Stage of development

The emerging literature on CSR reporting outside the Western world examines countries that are ‘developing’ (Belal and Momin 2009 ; Momin and Parker 2013 ), but little depth is included about where they are in their development journey and how the potential conflict between economic and social goals impacts CSR or CSR reporting. Rostow’s ( 1962 ) Stages of Economic Growth model suggests there are five stages (traditional society, preconditions for take-off, take-off, drive to maturity, and age of high or mass consumption), yet most literature on CSR classifies countries only into developed or developing. The ‘developing’ classification potentially includes countries that are in Rostow’s first, second or third stage which may have an impact on their response to CSR issues. In addition to economic variables however, the United Nations also produces a Human Development Index (HDI) which considers life expectancy, education and income to measure how social, as well as economic, development (UNDP 2015 ). Both these concepts are important for consideration of CSR.

Importantly, consideration of just one or two aspects of these three broader contextual issues may result in misinterpretation of the results. Often these things interact, for example, social issues often cross over with cultural and religious impacts, or even with political influence where the regime is more hegemonic. It is thus important to consider, or at least acknowledge, the holistic nature of the context of the phenomenon being examined.

It is beyond the scope of this paper to discuss all of the issues raised here although this would be an important part of a larger research program. Therefore, three particular contextual issues, and three specific contexts, are the focus of this paper: the role of political ideology and hegemony (China); the influence of cultural understandings (Middle East); and the impact of historical economic context (Sri Lanka).

Politics, ideology and state control

Ideology is a set of common beliefs that are shared by a group of people, and is “the fundamental social beliefs that organize and control the social representations of groups and their members” (Van Dijk 2009 : p78). Countries such as China provide a fertile research setting to examine the influence of ideology, and hegemonic approaches of influencing CSR, which have been missing from most CSR research in the region.

The Chinese political model has some unique characteristics. Among these is the dominance of ‘the party state’, which exercises control in different forms over most aspects of the economy that is unmatched when compared to other state capitalist economies. Political leaders use a variety of tools (Bremmer 2010 ) and it is the combination of three particular tools that sets apart the Chinese system: the exercise of control as a dominant shareholder, the ability to appoint key positions in major firms, and the means to influence decision-making via ideology. First, the party exerts shareholder power over state-owned enterprises (SOEs). Chinese SOEs play an instrumental role in society (Du and Wang 2013 ) and make up around 80 % of the stock market (Economist T 2012 ). As protecting the environment is a major part of the guiding ideology and the nation’s policy, SOEs are likely to be keen to provide CER. Second, the party exercises power over the appointment of the senior leadership in SOEs (Landry 2008 ). This has resulted in control as they are “cadres first and company men second. They care more about pleasing their party bosses than about the global market” (Economist T 2012 : p6). Third, party control is exercised through ideology. The party has cells in most larger firms, whether private or state-owned, which influence business decisions made at board meetings. Given that China considers the Marxist-Leninist-Maoist ideology as crucial this distinguishes it most significantly from other varieties of state capitalism that have a more liberal-democratic flavour.

There is some evidence that the first form of party control has been declining in recent times with the number of SOEs under the SASAC’s control halving over the last decade (Mattlin 2009 ). Similarly, since 1999, the share of SOEs in the economy has declined from 37 % to less than 5 %. This results in greater use of regulation and ideological hegemony to achieve its aims, yet most CSR research still uses state-ownership as a proxy for all types of state control.

Even after economic reform, ideology in China was still pervasive (Lieber 2013 ). Lieber ( 2013 ) argues that ideology is widely used to signal loyalty and the government is good at using ideology to “control and direct key vocabularies… (and) vague ideological language can create a climate of uncertainty thus increasing the range of a control regime” (Lieber 2013 : p346). However, the prevailing ideological themes in China are dynamic. In particular, most recently, new ideological themes have developed to respond to the changes in society. When economic reform began, “building up a socialist market economy with specific Chinese characteristics” was the guiding ideology (Zhang 2012 : p25). As such, economic growth was the country’s priority, but in 2005, “building up a harmonious society became the prevailing ideology” (and CSR is a key element of this resolution).

Ideology is used by the Chinese government to exert control over businesses. Traditionally, the government has “been considered a source of moral authority, official legitimacy and political stability…and …political language has been vested with an intrinsic instrumental value: its control represents the most suitable and effective way first to codify, and then widely convey, the orthodox state ideology” (Marinellin 2012 : p26). The language “developed and used by party officials … consists of ‘correct’ formulation, aims to teach the ‘enlarged masses’ how to speak and, how to think” (Marinellin 2012 : p26). The idea of the importance of a ‘Harmonious Society’ is the “re-contextualized discourse in response to the emergent issues in the changing social stratification order” (Zhang 2012 : p33). As a result, Chinese companies have been noticeably adopting the language of social concern and environmental protection.

It may therefore be suggested that CSR reporting in China is directly a response to the government’s ideological hegemony. However, the story is not as straightforward as it may first appear, for two reasons. First, despite a great deal of commitment to social and environmental regulation in China, implementation of these regulations has been limited. Second, as China enters a phase of continued economic development, Western influences may begin to have a moderating effect on the strength of the ideology.

The Chinese economy has grown rapidly in terms of gross domestic product (GDP) (World Bank 2016 ). The economic reforms that took place over the past decades were motivated substantially by the Chinese central government, and recent scholars have noted the positive role that ideology played in driving those reforms, notwithstanding that economists historically view ideology as “distorting… knowledge, judgment and decision making” (Lieber 2013 : p344).

With economic reform however, has come substantial environmental degradation which in turn has led to poor health outcomes for much of society generally. This led to a high level of commitment to environmental regulation in particular from as early as the 1990, followed by the release of even more rigorous regulations on environmental protection in the 2000s. However, despite the high commitment made by the Chinese central government, implementation of these policies is quite poor (Bina 2010 ). In terms of environmental regulation, for example, the implementation problems stem from a number of areas, including: the position of environmental protection agencies in the political framework; conflict between central and local governments; and supervision issues. The system of supervision of local environmental departments is a key problem (Bina 2010 ). When an environmental department is set up in the central government, corresponding environmental departments are set up in local governments. Ideally, these local departments should be agencies of the central department, deliver the central environmental department’s strategies, and supervise local environmental protection implementation. In reality, the local environmental departments are subservient to the local rather than central governments. All their financial support and staff appointments come from local governments. Therefore, rather than supervising local environmental protection implementation, the local environmental departments become “rubber stamps” for local governments (Zheng 2010 ). Therefore, it is unlikely that there will be efficient enforcement of environmental laws, regulations and policies at the local level (Bina 2010 ; Zheng 2010 ).

Finally, as China heads towards a market economy, government intervention becomes a policy choice, and markets function as a tool of national interest (Zhao 2011 ). However, as Chinese firms become more involved with foreign trading partners and markets, their reporting activity is also influenced by foreign and global organisations, leading to potential tension between demonstrating commitment to state ideological goals and meeting the requirements of global stakeholders.

Given the complexity of the context, research into CSR reporting in China needs to take into account the specific aspects of Chinese politics and culture in order to provide a nuanced understanding, and ultimately an improvement, of CSR reporting activities. However, a review done of the literature on CSR in by Chinese showed that it is very descriptive with little depth and much of the CSR literature is conceptual, descriptive, or argumentative in nature (Guan and Noronha 2013 ). The authors noted proper research methodologies are not systematically applied in some studies, and supporting theories are lacking. In the non-Chinese studies on China, there is also a predominance of papers on determinants and volume of reporting (Situ and Tilt 2012 ), with very few considering broader contextual factors, other than a few that look at specific cultural attributes (e.g., Rowe & Guthrie 2009 ).

Sociocultural understandings

Notwithstanding a move towards a market orientation of many developing countries, such as in China as outlined above, conceptions of CSR by management of companies in these countries may be quite different to those in the West (Wang and Juslin 2009 ). These differing conceptions may be a result of differing values and attitudes, language, religion or identity. Even specific elements of CSR are conceived of differently, for example in China, the main understanding of sustainability is in terms of environmental protection (Situ et al. 2013 , 2015 ). These socioculturally derived understandings are inevitably reflected in their reporting.

In another example, in the Middle East, the predominant perception of CSR is that it simply means philanthropic donations. In this region, the issue of social responsibility is relatively new, and as such the number of studies of CSR and CSR reporting in the Gulf region is growing (Al-Khatar and Naser 2003 ; AlNaimi et al. 2012 ; Emtairah et al. 2009 ; Mandurah et al. 2012 ; Marios and Tor 2007 ; Minnee et al. 2013 ; Nalband and Al-Amri 2013 ; Naser et al. 2006 ; Naser and Hassan 2013 ; Qasim et al. 2011 ; Sangeetha and Pria 2012 ). Many of these studies do not consider the cultural context to a very great extent as the research is emerging and focusses on perceptions. For example, Mandurah et al. ( 2012 ) and Emtairah et al. ( 2009 ) explored managerial perceptions of the concept of CSR in Saudi Arabia and found that managers are aware of the concept, but there is little connection between the managerial level perceptions and firms’ workforce. The authors describe CSR as being in its infancy phase, which limits the understanding of the concept to the view that CSR simply means being philanthropic. This indicates a different, and perhaps less developed, understanding of the concept in the region compared with the West, but the reasons for this, and the consequences for CSR reporting, are under-explored. Some authors suggest the narrow use of the term is because of the religious obligations towards society, (Visser 2008 ). There is only minimal evidence of any CSR practices other than philanthropy-based or any strategic approaches to CSR for long-term benefits (Visser 2008 ), but the trend is increasing and the forms that philanthropy takes is expanding.

It has also been argued that politics plays a significant role in increasing the awareness of CSR in the Arab world. Avina ( 2013 ) suggests that the perception of CSR in the Middle East changed after the Arab spring event, for both local and international firms. The term CSR more than a decade ago had little meaning to the public (Visser 2008 ) but since the Arab spring, the sense of social responsibility among civil society and the corporate sector has increased Avina 2013 ). Firms realised that they play a role in social responsibility, not just governments, and recognised that CSR should go beyond just donations to charitable causes (Avina 2013 ). Ronnegard ( 2013 ), however, predicts that CSR in the Middle East will not mimic the Western concept because of the strong influence of culture and religion in the region. Moreover, the influence of stakeholders in the Middle East is considered to be limited due to there being a lack of free press, few lobby groups and the different cultural attributes of employees and consumers. Some studies in Gulf countries have however, suggested that stakeholders, such as government and charitable organisations, may have an impact on firms’ behaviour (Emtairah et al. 2009 ; Naser et al. 2006 ). Others suggest that CSR may have developed as a concept due to the increase of foreign direct investment into Arab countries, the trend of shifting family and government owned firms into the public domain, and the globalisation of the region’s large national firms.

From the limited studies that have been undertaken, there is evidence of CSR reporting by Gulf country companies, with human resources and community involvement being the dominant themes in may reports Abu-Baker and Naser 2000 ). Thus, understanding of motivations for CSR reporting is not yet well developed and few existing studies consider the different level of stakeholder pressure in the region. This suggests that more research is needed on the formation of notions of CSR within specific contexts. This region is of particular interest because, according to the Human Development Report (HDI 2013 ), countries in the region are classified as high, or very high, in human development. That is, they are not only trying to develop and improve their economy, but are also trying to improve the quality of life of their citizens (Ramady 2010 ). The overall outlook of these countries indicates that they are performing well, however, Fadaak ( 2010 ) notes that identifying poverty lines is a challenge because of a lack of a clear definition of poverty in the region. There are no official reports considering poverty or other social problems and no GCC (Gulf Cooperation Council) countries were found in the list of the World Bank Database in relation to the poverty rate.

Similarly, in other developing countries the importance of local economic, cultural, and religious factors that shape the business environment, and understandings of charity and philanthropy, need to be taken into account. Empirical work in this area is lacking (Lund-Thomsen et al. 2016 ). In Sri Lanka, for example, “the most common arguments used to ‘sell’ the business case for CSR and CP [Corporate Philanthropy], for example an improved brand image, increased market or customer share, employee retention, mitigated regulatory risks, and reduced tax burden, are considered mostly irrelevant” (Global Insights 2013 : p1). Business leaders engage in CSR for a range of business, humanitarian, social, religious, and political reasons. Key amongst them is a belief that ‘giving back’ to society discharges religious obligations to the poor, and an awareness that being seen to contribute to national development goals is important (Global Insights 2013 ). Hence, the conception of CSR in this region is culturally determined, but also shaped by the economic environment.

• Economic development

As well as government control, culture and political factors, the stage of economic development a country is in is also an important contextual factor that may impact CSR reporting. In China, as discussed above, the drive for economic reform led directly to environmental impacts which needed to be addressed. A number of other developing countries have been examined for their reporting on CSR issues, particularly from the Asian region (Andrew et al. 1989 ; Elijido-Ten et al. 2010 ), India (Mishra and Suar 2010 ; Raman 2006 ; Sahay 2004 ), and Bangladesh (Belal and Owen 2007 ; Belal and Roberts 2010 ; Khan 2010 ; Muttakin et al. 2015 ).

While these countries are classified as developing (IMF 2015 ), Bangladesh and India score only medium for human development. Another country in the region, Sri Lanka, has a high rating on the HDI, and has been exhibiting extensive growth since the end of a 30-year war (WPR 2015 ). Thus, exhibiting both economic and social growth aspects makes it an interesting case for studying CSR.

Sri Lanka has a population of over 20 million and foreign companies have increased their investments with one billion US dollars in direct foreign investments in 2013 alone ( BOI ). Classified as a middle income developing country, the challenge for Sri Lanka is to achieve high economic growth without causing irreversible damage to the environment and while continuing to eliminating social issues such as poverty, malnutrition and poor workplace ethics (Goger 2013 ). In addition, Sri Lanka also has a long history of corporate philanthropy, largely led by individuals whose values and actions stem from religious and cultural views (Beddewela and Herzig 2013 ) but has recently seen an increase in private firms offering development-related initiatives. Public infrastructure projects have been the main element of post-war economic planning, but there still remains rural poverty in the country. Thus, the primary motivation for CSR and philanthropy in Sri Lanka is poverty reduction, particularly for children and youth, social welfare organisations like orphanages and elderly homes, hospitals and health services, and veterans’ charities (Global Insights 2013 ). Thus, the economic, cultural, and political context means that these poverty rates have fallen (data indicates that the rate went from approximately 20 % in 2000 to under 9 % in 2013) and that inflation has slowed (Wijesinha 2014 ), so opportunities for private businesses to contribute to infrastructure abound. However, these private, development-orientated, CSR initiatives have often failed to deliver their aims and there is considered to be a danger that they may in fact perpetuate the causes of poverty and ethnic and religious conflict given their ties to particular ethnic groups (Global Insights 2013 ).

Notwithstanding this environment, the topic of CSR reporting in Sri Lanka has received relatively little research attention compared to other parts of the world (see Belal and Momin 2009 , for a review). In terms of motivations for CSR, there is some evidence that firms in which senior management have a positive outlook towards social and environmental practices tend to disclose more on these aspects, as compared to other firms (Fernando and Pandey 2012 ). However, reporting on CSR initiatives is not mandatory thus it is likely that any voluntary reporting by Sri Lankan firms will vary significantly. One study of reporting was conducted by Senaratne and Liyanagedara ( 2012 ) who examined the level of compliance with Global Reporting Initiative (GRI) guidelines in the disclosures of publicly listed companies, selected from seven business sectors. The authors conclude that the level of compliance with the GRI is low and that disclosures vary significantly amongst the companies, potentially reflecting varying commitment to CSR. Similarly, a longitudinal study across five years (2005–2010) was carried out by Wijesinghe ( 2012 ) to identify trends in CSR reporting in Sri Lanka and the study identified an increasingly positive trend, predicting similar levels of disclosures provided by companies in developed countries. The few studies that have been conducted examining the predominance of reporting in Sri Lanka, mostly examining multinational companies, conclude that CSR reporting is gaining momentum in Sri Lanka but is still emerging as the concept of CSR itself emerges (Beddewela and Herzig 2012 ; Hunter and Van Wassenhove 2011 ).

Conclusion and a future research agenda

As more and more research on CSR in developing countries emerges in the academic literature, it is important to ensure that appropriate consideration is given to the context in which the research takes place. Examination of CSR and CSR reporting practices without contextualisation could perpetuate flawed understandings that are based on evidence from research in the developed world. Different political, social, cultural and economic environments impact on the both the development of, and reporting of, CSR activities and consequently impact on the value of these activities to benefit society and the natural environment.

A suggested agenda for future research, that considers context in more depth, includes:

Consideration of ideological and hegemonic regimes and their attitude towards CSR. This research would consider potential positive and negative impacts of the political and governance system. In China, for example, the potential for Communist Party ideology to increase environmental protection and improve social conditions is vast, and is starting to be seen to have a strong impact on firm behaviour. Examination of this over time will provide an important contribution to understanding the role of government beyond the more common analysis of environmental protection regulation.

Greater examination of sociocultural variables in different countries, beyond analysis of religious influence, and beyond the use of Hofstede. Understandings of concepts such as CSR in countries in Asia, the Middle East and the Asian sub-continent, are known to differ from those in the West, so understanding their potential to lead to better (worse) CSR outcomes is important. The variety of variables that could be included is vast, but some clearly important issues include: language, secularism, freedom of the press, access to information, homogeneity of values and attitudes, and the existence of a national figurehead or identity.

Longitudinal examination of the process of economic development. Countries where the economy is developing rapidly, such as China and the Middle East; and countries where the historical economic context differs dramatically, such as in Sri Lanka where the need for development is borne out of conflict, provide rich backgrounds to consider how CSR is developing alongside economic developments.

A comprehensive framework for examining these, and other, potential factors that influence CSR and CSR reporting in developing countries does not exist, but Table  1 attempts to provide a preliminary outline of some factors that could comprise such a framework, and be used to guide future research. As mentioned earlier, it is important to note, however, that these variables are not discreet and are likely to interact with each other. This is noted in the table as a reminder that the classifications are somewhat artificial and that acknowledgement of a more holistic consideration is important.

These are clearly only a selection of opportunities for CSR research on developing nations and emerging economies. Calls for more work on these factors have continued since Adams’ ( 2002 ) original call, but there is still vast scope to improve our understanding of CSR practice throughout the world (Fifka 2013 ), where much of the social and environmental damage is taking place.

Importantly, research of this kind must be transdisciplinary as perspectives from areas such as political science, philosophy and economics are essential. Only with in-depth, contextualised understandings can improvements to the nature of CSR activity be implemented.

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Acknowledgements

It is important to acknowledge that this paper provides an overview of a larger research program currently being undertaken by a team of doctoral students at Flinders University and the University of South Australia. Credit must be given to Ms Hui Situ (Flinders University) who is researching environmental reporting in China, Mr Abdullah Silawi (Flinders University) who is researching social responsibility reporting in the Gulf region, and Ms Dinithi Dissanayake (University of SA), who is researching environmental disclosure in Sri Lanka.

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Tilt, C.A. Corporate social responsibility research: the importance of context. Int J Corporate Soc Responsibility 1 , 2 (2016). https://doi.org/10.1186/s40991-016-0003-7

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• Corporate social responsibility
• Corporate environmental reporting
• State capitalism
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• Middle East

Essay on Corporate Social Responsibility

This report provides information on whether the benefits of CSR outweigh the drawbacks. The report shows that the benefits of CSR are more than the drawbacks and managers should consider implementing the strategy. The research utilizes the use of secondary resources to conclude. Most of the authors used in this report show that CSR has more advantages such as consumer satisfaction, financial performance, productivity, and promotes relationships among the companies, the stakeholders, and society. This research informs the managers on the benefits of executing CSR in their companies. More so, it provides information on few drawbacks that the managers should be prepared to experience. The study adds new information concerning the comparison of advantages and disadvantages of CSR which makes it easier to determine if the strategy should be implemented in companies.

Corporate Social Responsibility

Introduction

Corporate social responsibility (CSR) is a self-controlling model of business that helps business organizations to be socially accountable to the public, stakeholders, and self. Through CSR, companies have conscious of how that affects society environmentally, socially, and economically as they do their businesses (Basuony et al., 2014). Engaging in CSR means that companies are operating in ways that improve society and its environment. As much as CSR influences companies to translate the principles into practical activities, some of the researchers show that CSR may harm companies, stakeholders, and consumers.

Research Questions

Do the positive impacts outweigh the negative effects of CSR among the companies?

Despite some of the researchers revealing the negative impacts of CSR, there are many positive influences that companies, stakeholders, and consumers experience. Companies should ensure that they are responsible for themselves, society, stakeholders, and consumers. This promotes the positive impact of business in society without other people suffering the implications of unethical business activities. However, it is linked to few drawbacks such as costs, conflicts in the profit motive, and “green washing” of customers.

Methodology

This report will utilize secondary sources for review to come up with conclusions. Articles that are less than 10 years old will be used to develop conclusions on whether CSR is effective among companies and if the benefits outweigh the drawbacks.

Literature Review

Based on a substantiation from Mena country, Basuony et al. (2014) state that CSR promotes the performance of business organizations. The stakeholder theory suggests that organizations have to manage relationships with other groups and stakeholders which influences the effectiveness of business decisions. Despite making entrepreneurship progress, businesses that pay attention to the needs of society are successful. For example, branding is effective when a business organization protects the environment and takes part in social activities such as the construction of schools. Most of the researches in this article show that CSR influences business performance through market orientation and consumer satisfaction and financial performance. In research done by Newman et al. (2018), shows that CSR has an independent positive influence on the level of firms efficacy- increased productivity influenced by high effective business engagement. Increased company involvement in community initiatives is a great influence for success in business due to customers’ and stakeholders’ trust.

The concept of the future of CSR presented by Archie Caroll shows that as companies continue to apply CSR, benefits such as stakeholders engagement, increased productivity due to employees being the driving force of business and the enhancement of power among ethically sensitive customers and the client will be experienced (Agudelo et al., 2019). The concept influences effective governance criteria, environmental responsibility, corporate citizenship, the establishment of shared business values, and social performance. However, CSR is linked to various negative impacts. Mahmood et al. (2020) suggest that CSR influences negativity through abusive supervision while valuing employees’ conducts. As much as CSR influences minimization of negative employees’ behavior, it also influences negative conduct when there is abusive supervision. More so, the implementation of CSR needs money. Especially for small businesses, CSR is not affordable to be allocated in the budget. The conflict of the profit motive is also established in CSR as the focus on societal benefits may influence losses to companies. Greenwashing of consumers is linked to CSR. For example, labeling products to be organic to attract consumers.

Implications

This exploration has implications for both bodies of knowledge and management. The research used in this report shows that as much as CSR may have various drawbacks, the benefits outweighs the disadvantages. It contributes to the existing body of knowledge by showing that CSR has more benefits and companies should consider its application in business. The limitations of the current study are the use of secondary sources and few articles to provide more evidence. More so, the articles used in this report do not include cultural factors such as religion which are significant in understanding CSR and the involved activities in the society. The discussion concerning the link between CSR and corporate governance is not provided. Therefore, further research should be done to evaluate this link and its impact on the performance of the company and the experiences of the stakeholders and customers. More so, the research provides a key takeaway for managers which is mainly the benefits of executing CSR in companies to influence performance. The managers should know that despite the presence of drawbacks linked to CSR, there are many advantages such as consumer satisfaction, effective branding, establishing trust, and financial performance.

Based on the previous research used in this report, it is evident that CSR has many advantages. These pros include consumer satisfaction, productivity, good relationships with society and stakeholders, financial performance, and effective branding. These advantages overpower the drawbacks which include costs, conflicts in the profit motive, and “green washing” of customers. However, the limitations of the research include the inclusion of fewer articles and a lack of cultural factors in the research. Therefore, this study concludes that the benefits of CSR outweigh the disadvantages. The implication of the literature is informing managers to execute CSR which promotes productivity and financial performance.

Agudelo, M. A. L., Jóhannsdóttir, L., & Davídsdóttir, B. (2019). A literature review of the history and evolution of corporate social responsibility.  International Journal of Corporate Social Responsibility ,  4 (1), 1-23.

Basuony, M. A., Elseidi, R. I., & Mohamed, E. K. (2014). The impact of corporate social responsibility on firm performance: Evidence from a MENA country.  Corporate Ownership & Control ,  12 (1-9), 761-774.

Mahmood, F., Qadeer, F., Abbas, Z., Hussain, I., Saleem, M., Hussain, A., & Aman, J. (2020). Corporate social responsibility and employees’ negative behaviors under abusive supervision: A multilevel insight.  Sustainability ,  12 (7), 2647.

Newman, C., Rand, J., Tarp, F., & Trifkovic, N. (2020). Corporate social responsibility in a competitive business environment.  The Journal of Development Studies ,  56 (8), 1455-1472.

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