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7 Best Practices for Creating an Impactful CSR Strategy

Updated: 05/28/2024

Once upon a time, businesses could focus on profitability above all else.

Not any more: modern companies are expected to care about making the world better. They’re expected to serve their communities, listen to their customers, take public stances (and action) on important issues, value and support employees, work for sustainability, and respond to current events.

CSR (corporate social responsibility) programs are one way businesses are meeting this mandate. And standout programs addressing social and environmental issues are most often the result of thoughtful CSR strategies.

Whether you’re new to CSR or looking to refine existing initiatives, understanding the ins and outs of CSR strategy is a prerequisite for creating successful programs with lasting impacts. The new “business as usual” demands smart social responsibility—are you ready to meet the challenge?

What is CSR strategy? Why have a CSR strategy? Best practices for creating a CSR strategy

What is CSR strategy?

CSR strategy is the comprehensive plan companies and funders use to design, execute, and analyze their corporate social responsibility initiatives. It includes specific focus areas, program design, promotion and communication approaches, and evaluation procedures.

Most companies with thriving CSR initiatives use strategy to build and monitor their programs; a few of these companies also share their strategy publicly. Nestle is a great example, offering detailed insight into their brand’s approach (called “Creating Shared Value”) that includes long-term goals for serving individuals, families, communities, and the planet, as well as measurement procedures and transparent performance and reporting .

Some companies also release an annual corporate responsibility report which is another useful way for you to see what a CSR strategy can look like. Google’s 2020 Environment Report includes priorities, company mission, performance targets, and detailed analysis in five key focus areas.

Why have a CSR strategy?

In the world of CSR, it’s especially prudent to look before you leap.

This is because successful CSR initiatives are intricate, complex, and require demonstrable impact. They’re also public-facing (and potentially brand-damaging when done poorly). And they offer a host of business benefits you might miss out on by failing to plan.

A well-crafted CSR strategy can help you:

Keep everything organized

Great CSR initiatives involve lots of people, multiple goals, tons of data, and countless responsibilities. Your CSR strategy is an opportunity to get everything in order and prepare to stay on top of all the details.

Improve impacts

According to Deloitte’s third annual global survey of more than 2,000 C-suite executives at companies with societal impact goals, the presence of comprehensive strategy directly correlated with greater success (measured by innovation, growth, and employee acquisition).

Protect your brand reputation

Launching a corporate responsibility initiative without proper foresight is a big risk—that’s because your CSR program will be a public-facing endeavor with multiple stakeholders and partners who expect follow-through. Strategic planning can reduce the possibility that your company will gain a reputation for big talk and no action, which can ultimately harm your bottom line.

Take full advantage of CSR program benefits

CSR has a host of potential benefits for your company. A successful corporate responsibility initiative will benefit your community and serve your employees. It will also improve your brand image, attracting new talent and increasing customer loyalty. Ultimately, these outcomes can contribute to revenue and drive your company’s growth. In order to reap the full business benefits of CSR, you’ll want a strategy that’s brand-aligned, well-researched, responsive, partnership-driven (at all levels), and constantly evolving in pursuit of positive impacts everyone can feel good about.

Best practices for creating a CSR Strategy

Understanding the role and value of a CSR strategy is an important first step.

Now, how do you create and develop a CSR strategy that gets results? There are seven key tactics for strategic planning that will help improve the outcomes of your business’s CSR activities.

1. Link to company values

Whereas CSR was once seen as a peripheral approach to boosting business performance and legitimacy, today’s best CSR initiatives are squarely brand-aligned and central to operational strategy.

Connecting CSR to business strategy is increasingly a corporate best practice, as evidenced by the 181 CEO’s from brands like Amazon, Citigroup, and Ford who signed Business Roundtable’s latest Statement of Purpose , indicating a commitment to “ to lead their companies for the benefit of all stakeholders—customers, employees, suppliers, communities, and shareholders. ”

What it looks like to align your CSR strategy with your brand, core competencies, and operational strategy, will be different for every company.

WarnerMedia’s Access Writers Program is a great example of a CSR initiative that clearly links back to company values: WarnerMedia is a media corporation focused on diverse entertainment whose latest program seeks to improve the access marginalized community members have to professional opportunities in television.

2. Get insights from your various stakeholders

You’ll want to develop a strategic plan for CSR inspired by what your customers, employees, and community members care about. You might also seek inspiration from what’s worked for other brands already. Here’s how:

Poll your customers

The creation of a CSR strategy is a great excuse to connect with your customer base. Build a short, easy to access poll to collect the following information:

Which environmental and social issues matter most to your customers?

Design your poll in alignment with your brand. For example, if you sell custom T-shirts, are customers most interested in your sustainability, supply chain, dedication to labor and human rights, or donations to kids in need? Focused questions will lead to more actionable results.

What do customers know about your current giving and initiatives?

If you have run programs in the past or currently engage in CSR, how well did you communicate about them? Are your initiatives known for success?

What associations do customers have with your brand?

This is a great opportunity to collect data about your business’s image, which you can try to influence in your new CSR strategy.

To help boost participation, consider offering an incentive to customers who complete your poll, such as a discount or entry into a drawing.

Collect employee feedback

Your CSR strategy doesn’t move without your employees. Start by determining your employees’ preferences and using that information to help build your overall strategy.

A survey is a great tool to collect this important information, combining multiple-choice and open-ended questions.

As an example, for your T-shirt company, you might have employees select between three brand-aligned volunteer opportunities followed by an opportunity for open feedback. This approach will you help you get the targeted data you need and also help employees feel heard and valued.

Assess community needs

What “community” looks like is unique for every business. Taking time to research and consider what your community needs is a great first step towards building the partnerships your CSR program will need to succeed.

Community Tool Box offers great suggestions for understanding community needs and resources, with methods that can be combined, depending on the extent of data you’re looking to connect.

3. Borrow great strategy

Your CSR strategy doesn’t have to reinvent the wheel. Spend time exploring where other businesses have succeeded in their sustainability, charitable giving, and employee engagement, for example. Don’t worry about being derivative: your strategy will necessarily be unique because your brand is unique and so are the people you care about and listen to.

One way to find brands doing the best CSR is via reports like “ America’s Most Responsible Companies ” from Newsweek and Statista—and congratulations to HP , Cisco , and Dell for top success in three focus areas: environment, social, and corporate governance.

Harvard Business School’s Baker Library offers a comprehensive list of social responsibility ratings and reports for companies. Of particular interest is Fortune’s “ Change the World ” list—you’ll find PayPal and Zoom in the top 10 for 2020.

Many companies have aligned their CSR activities in some way with the UN’s 17 Sustainable Development Goals (SDGs) that include issues like poverty, hunger, education, gender equality, and action around climate change. Chevron’s corporate sustainability program , for example, clearly lays out how the company is addressing every SDG, and Target includes an SDG index in their 2020 corporate social responsibility report .

4. Establish internal buy-in

You’ll need your team’s support, enthusiasm, and dedication to make your social responsibility program thrive. Engage employees early in the strategy process by being responsive and inclusive.

Respond to team values

Once you’ve assessed what your employees care about most and where they want the company to focus, put this data to work.

It probably won’t be possible to incorporate everyone’s feedback in your strategy, but at the very least, share your findings with the group. Your team will enjoy learning about what their colleagues value.

Use the information you’ve collected to identify top areas of interest and common suggestions for your CSR strategy. Try to actively pursue at least one employee-sourced initiative every quarter or fiscal year, with formal plans for addressing additional issues in the future.

Involve employees in strategy-building

Research shows that shared leadership and employee-empowerment have a number of benefits , including increased team effectiveness, a stronger sense of community, improved employee perceptions of management, higher levels of employee satisfaction, and less burnout.

That data combined with evidence that corporate social responsibility boosts employee motivation and increases employee engagement makes sharing the planning of your program with staff a natural win-win.

Whether you establish an employee-led committee or include employee representatives in planning sessions, be sure employees are actively engaged and aligned with your CSR visions and values, missions and goals, and on-the-ground initiatives.

5. Build external partnerships

There’s already good work going on in the communities you’re looking to empower. Seek out the organizations and individuals doing this work early in your CSR strategy development process.

Many businesses are already reaping the value of partnership-driven CSR. This list from Donorbox offers examples of 14 major brands, including Adidas, IKEA, Apple, and BMW, that have partnered with community nonprofit organizations to better meet their CSR goals.

Community organizations will have the knowledge and experience to put your brand’s funding, sponsorship, or employee volunteerism, for example, to the best use. As philanthropic leader Edgar Viallanueva recently advised, “ You shouldn’t feel that you need to recreate what’s already in place. Find organizations that have established relationships with grassroots communities and trust them to get the money to the right people. These bridge organizations often have the relationships and trust, but lack sufficient capital.”

Approach community partnerships with humility and take a learning stance—what do partner organizations need most and how can your business help? In addition to deep listening, be sure you’re establishing authentic relationships with partners. Sustainable and equitable partnerships (as opposed to shallow partnerships for the sake of PR) require that community members hold actual decision-making power, especially regarding campaigns that will directly affect them.

6. Be clear and transparent

Once you’ve tackled brand-alignment, stakeholders’ concerns (including customers, employees, and community members), and partner-driven strategy, it’s time to distill this wealth of information into a clear communication plan.

Get specific about goals and outcomes

Your CSR strategy should be as clear and specific as possible for a few reasons:

A clear strategy helps keep everyone on the same page
The more focused your goals are, the easier it will be to assess if you’ve met them
Clarity reflects positively on your brand’s commitment to corporate social responsibility, demonstrating rigor and care

Aim for precise language, numbered goals (each communicated in a single sentence if possible), key strategies and initiatives for meeting each goal, and measurement tactics for assessing progress towards each goal. Be sure to include your mission, vision, and partners.

Campbell’s Soup provides a great example of clarity and synthesis in its corporate responsibility strategy—especially this goals chart which lists target objectives alongside current progress displayed numerically and graphically.

Make a communications plan

Your CSR strategy shouldn’t be a secret. Think through how you’ll share this information internally and externally to foster enthusiasm, boost stakeholder engagement, and enhance accountability.

Your CSR strategy should include your plan for regularly and publicly discussing your CSR initiatives—via your website, social media, newsletters, email updates, reports, and even press releases.

Sharing high-level corporate strategy publicly can help generate interest in your CSR programs. It also indicates transparency and accountability—you’re sharing your plan because you intend to follow through and be accountable.

Use the same principles for sharing your strategy that you will to talk about your active and completed CSR campaigns, including these considerations adapted from the EMG group :

Objectives: What do you want to accomplish with your CSR communication plan?
Audience: Who will you communicate with?
Subjects and key messages: What will you tell your audience about?
Timescales: When will you communicate about CSR?
Channels: Where will you communicate with your audience?
Feedback: How will your audience be able to engage with you?

7. Learn, respond, and improve

In the world of CSR, there is always room for improvement, because CSR is about people and people are dynamic. Our needs change and so does the world we live in.

Accordingly, your CSR strategy won’t be complete without a plan for learning, adjustment, and growth—or as Global Giving puts it, the opportunity to “Listen, Act, Learn. Repeat.”

Plan for reporting and feedback

Data and feedback collection should be an essential part of your CSR strategy. Don’t wait for an initiative to finish to consider how you’ll assess outcomes—planning ahead will help ensure your whole strategy is aligned with what you hope to achieve and how you’ll demonstrate progress.

You also shouldn’t wait until the end of a campaign to begin your learning process. Establish a timeline for collecting information at regular intervals throughout your initiative.

There are plenty of ways to collect data and feedback, including interviews, surveys and questionnaires, observational data, focus groups, public forums, oral histories, or some combination of these. Plan to use the tools that make the most sense for your CSR initiative.

Whichever method you choose, be sure your strategy involves connecting with all relevant groups and stakeholders. What results did you achieve among community members and where could you improve? How did employees feel about your CSR program and what suggestions do they have going forward? Were customers interested in your campaign?

Your plan for measuring CSR performance should include how you’ll collect information and from whom, how you’ll assess the data, how you’ll share your findings, and how you’ll incorporate suggestions for improvement.

Be responsive to learning and to the moment

Your CSR strategy shouldn’t be iron-clad. It should evolve in response to new insight and data. Think of your strategy as a working, living document that can and should continue to improve, even mid-campaign, as necessary.

Ready to meet the moment with smart CSR?

Submittable’s social impact platform can help you manage initiatives and amplify impact, easily.

As an example, the events of 2020 forced businesses to reconsider their existing CSR programs. Many companies chose to pivot in response to COVID-19 and movements for racial justice. The publicity around these shifts, including critiques of hollow brand statements , underscored the importance for socially responsible companies of clearly linking action (via CSR) to rhetoric.

According to Mark Horowitz, CEO of Moving Worlds, global events have resulted in a tipping point for CSR , wherein business leaders are making bigger promises without changing operations to support their proposals. More than ever, he argues, companies must respond to the moment and take real action: “The next 10 months will define the CSR space for the next 10 years … CSR leaders within companies have the opportunity to right the position of corporations in society.”

While it’s vital to stay responsive, be wary of altering key goals and measurement tactics before you’ve had time to accurately assess them. Not only do you open your company up to critique for empty promises, but change doesn’t happen overnight and long-term objectives require longer-term measurement.

As Neil Buddy Shah, Managing Director at GiveWell, shared in a recent panel on impact data , you risk good ideas failing when organizations run an impact evaluation that is too rigorous too early.

Time for action: Bring your CSR strategy to life

A thoughtful CSR strategy requires time, thought, and teamwork to build. Make the best use of your efforts with tools that help transform your vision into action and results, faster.

CSR software can connect your business to important causes while dramatically reducing the time it takes to oversee your corporate giving program. Manage corporate grants and scholarships, coordinate employee volunteers and giving programs, facilitate community sponsorships, and much more. We’d love to walk you through the platform— sign up for a free demo today.

Rachel Mindell is a Special Projects Editor at Submittable. She also writes and teaches poetry. Connect with her on LinkedIn.

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About Submittable

Submittable powers you with tools to launch, manage, measure and grow your social impact programs, locally and globally. From grants and scholarships to awards and CSR programs, we partner with you so you can start making a difference, fast. The start-to-finish platform makes your workflow smarter and more efficient, leading to better decisions and bigger impact. Easily report on success, and learn for the future—Submittable is flexible and powerful enough to grow alongside your programs.

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HOW IT WORKS

8 keys to a transformative CSR strategy

When was the last time you thought about the future of the world outside of your organization’s doors? What if there were a way to contribute to the world around you and give your business a competitive edge at the same time? There’s a business strategy that delivers this win-win situation, and it’s called corporate social responsibility (CSR).

Today, customers gauge an organization’s value beyond the quality of their services and products. Consumers expect companies to use their resources responsibly to make a positive impact – on more than the company’s financial bottom line.

Whether it’s transitioning to a paperless office or committing to diversity, equity, and inclusion (DEI) efforts, there are plenty of ways for your organization to implement CSR initiatives in your daily business operations. We’ll cover CSR from ideation to implementation in your business: the basics and benefits of corporate social responsibility, how to create effective CSR strategies, and the positive impact of this triple-bottom-line strategy.

The modern business landscape views CSR as a critical component, aligning with IMD’s emphasis on visionary leadership. A strategic approach to CSR enhances brand reputation, fosters consumer trust, and provides a competitive edge.

Engaging in responsible practices is imperative to thrive in today’s market. IMD’s tailored programs equip leaders with insights to navigate the intersection of business operations and societal expectations, promoting responsible, forward-thinking leadership.

In a world where business is linked to societal well-being, a robust CSR strategy showcases a company’s commitment to a sustainable, inclusive future. Through IMD’s programs, leaders can transform CSR principles into actionable strategies, positively impacting business growth and societal progress.

What is corporate social responsibility (CSR)?

What are the 4 types of csr, 8 key ingredients for a powerful csr strategy, the future of csr as a force for global change.

Corporate social responsibility encompasses an organization’s sustainability based on social impact, and how it fulfills its ethical, economic, and environmental responsibility. As such, it’s key to establishing a triple bottom line: a business framework that assesses performance based on social, environmental, and financial outcomes.

CSR is also known as corporate citizenship. CSR initiatives show how an organization is being a good global neighbor through fair labor practices, ethical behavior, and championing human rights within the business and in society at large.

The growing significance of CSR is becoming a focal point in executive education and MBA curriculums at top institutions like IMD, transitioning from a peripheral to a central theme.

IMD, among other premier institutions, is integrating CSR deeply into its curriculum, emphasizing the alignment of profit with purpose. This educational shift aims to develop leaders capable of balancing economic goals with societal and environmental responsibilities.

Leaders nurtured in such environments are well-equipped to navigate modern business landscapes, implementing sustainable practices that drive both business growth and societal betterment.

This educational emphasis prepares future leaders to adeptly manage financial, social, and environmental considerations, positioning IMD graduates at the forefront of promoting a culture of corporate responsibility with a holistic approach.

Companies usually have a combination of the following four elements within their business strategy.

1. Environmental responsibility

This includes an organization’s carbon footprint, emissions, and efforts to limit its contributions to climate change. Common ecologically sustainable business practices include going paperless, encouraging remote work to cut office energy consumption, implementing recycling programs, and reducing plastic use.

Becoming a sustainable business doesn’t necessarily have a high price tag. In fact, environmental sustainability can actually save you money when it comes to supply and production expenses, such as sourcing local products and thereby cutting delivery costs and carbon emissions.

2. Philanthropic responsibility

Philanthropic CSR activities include using company resources for the betterment of society. They might take the form of charitable contributions, volunteer projects, and community engagement.

Many organizations match a percentage of employee donations and sponsor local nonprofits. When businesses actively support their communities, they also reap the benefits of creating a positive brand image, which encourages repeat customers and drives profits.

3. Ethical responsibility

A company can express its ethics by promoting an equitable work environment through fair labor practices. Ethical behavior is maintained within all stakeholder relationships, including employees, investors, and customers.

Examples of ethical responsibilities are comprehensive employee benefits, diversity and inclusion initiatives, and manufacturing processes that don’t use child labor or generate harmful waste byproducts.

These CSR activities increase employee and customer retention by improving your brand image. Starbucks is known for its fair trade coffee, which has made it a household consumer name.

4. Economic responsibilit y

This last CSR cornerstone includes the financial aspects of the other three types of CSR. Examples of financial CSR investments could be donations to charities and nonprofits, dedicating budget space toward a specialized DEI board, or developing eco-friendly products.

Now, let’s take a look at the key steps of incorporating all four types of CSR efforts into your organization.

For a CSR strategy that makes a lasting impact, follow these eight steps.

1. Define the purpose driving your organization

A clear purpose behind your CSR efforts drives motivation and keeps you on track to your goals. Create a mission statement that explains your motivations for engaging in corporate social responsibility, and refer to it when developing your business practices.

For example, if your purpose is to create a positive environmental impact, this goal should inform your potential CSR initiatives of reducing your carbon footprint through better waste management and donating to climate change research.

2. Align your CSR strategy with your business goals

Consider your current business strategy and identify opportunities within your existing company goals. If your business already has an environmental, social, and governance (ESG) plan in place, see if there are any overlapping areas of your existing corporate social responsibility initiatives. Donate to nonprofits that connect with your company’s mission.

For example, Ben & Jerry’s is outspoken about social activism, and their business model reflects this. They create special ice cream flavors and donate the proceeds to specific causes, including Colin Kaepernick-inspired flavor, “Change the Whirled,” which supports Know Your Rights Camp .

3. Engage your stakeholders

When developing your CSR strategies, consider feedback from your stakeholders. The best sustainability strategies engage all stakeholders , from your investors to your employees.

Encouraging employee engagement within your CSR strategy ensures they’re motivated to contribute to your efforts and understand the reasoning behind any procedural changes. Further, involving your investors in CSR encourages continued investment.

4. Set measurable goals and track progress

Once you’ve defined your CSR efforts, track your progress through quantifiable goals. This helps you report your efforts and share your results with stakeholders.

For example, if you want to reduce your environmental impact, set a measurable goal of cutting your overall carbon footprint by a specific percentage.

There are many external sustainability classifications, such as B Corp , social purpose corporation (SPC) , and low-profit limited liability company (L3C) designations you can use as a foundation for your metrics. Consider a resource like SASB Standards , which measure the CSR and ESG impact across 77 industries. You could also partner with an organization such as the ISEAL Alliance , which helps members set measurable CSR goals and track progress to enhance the effectiveness, credibility, and impact of their sustainable business models.

5. Be transparent at every step

Honest sustainability reporting keeps your organization accountable toward your CSR commitments. For example, keep documentation of your labor practices, and openly reveal your supply chain practices. Transparency prevents organizations from engaging in greenwashing or over-exaggerating their sustainable practices.

When done right, promoting your CSR efforts increases your brand image and trust with your stakeholders and consumers.

6. Continuously innovate and adapt your strategy

The only certainty in life is change. The top sustainability concerns within our world are constantly evolving, which means your CSR strategies need to adapt, too. Regularly reevaluate your CSR business practices so your organization stays ahead of the curve. As your organization’s reach and resources grow, adjust the scale of your sustainability strategy accordingly.

If you’re short on inspiration, look to some of the top-ranking CSR organizations’ CSR strategies. For instance, 3BL releases a yearly list of the top 100 Best Corporate Citizens ranking the largest public U.S. companies on their ESG transparency and performance.

7. Collaborate for a broader impact

It’s likely that your goals match those of other organizations in your business community. Look for opportunities to collaborate and create partnerships with nonprofit organizations and other businesses to amplify your CSR impact. Not only does collaboration provide networking opportunities, but it also means that you can share the cost of resources in your initiatives.

You could start by identifying companies with similar interests, and join forces with them by offering your employees a paid opportunity to volunteer with them. This not only fosters networking opportunities for your business but also increases employee engagement.

8. Take a community-centric approach

While it’s tempting to think big when it comes to CSR initiatives, don’t forget to look for opportunities in your local community. After all, not only does it improve the community for your employees, but your carbon footprint and sustainable development can directly impact your local environment. For example, to fulfill a commitment to philanthropic responsibility, an art materials manufacturer could donate a portion of its products or proceeds to nearby classrooms and after-school programs.

An effective CSR strategy bridges the gap between individual goals and global impact. But beyond contributing positively to society, it can also give you a competitive edge. By embracing CSR, you position your business as a responsible global citizen, demonstrating fair practices, ethical behavior, and the championing of human rights.

This comprehensive approach not only establishes a positive brand image but also ensures a sustainable future, where businesses play a pivotal role in crafting a world of shared prosperity, environmental harmony, and social progress.

Not sure where to start? IMD’s Leading Sustainable Business Transformation program offers a holistic approach to sustainability, guiding leaders through a transformative journey from knowledge to action. With insights from expert faculty, real-world case studies, and industry leaders, participants witness practical sustainability practices in action, translating into actionable plans for their own organizations.

Work on your unique sustainability challenges and develop personalized roadmaps for change alongside a diverse peer community. Led by experienced faculty, you’ll learn the tools and frameworks you need to embed sustainability into your business strategies and drive a positive impact on your business and local and global communities.

Visionary leaders prioritize CSR for sustainable growth and impact. With IMD’s comprehensive programs, you gain the knowledge and strategies to drive transformative CSR initiatives, ensuring a legacy of positive change.

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8 simple steps to create a CSR strategy

Corporate social responsibility (CSR) is becoming a core business strategy for many companies. It’s proven to increase customer loyalty, retain employees and increase the bottom line — all while doing incredible things for the world.

Nearly half of all consumers are looking toward brands to lead the way in making the world a better place. It’s not only consumers; a Glassdoor survey found that 75% of employees between 18 and 34 expect their employers to take a stand on important issues. The influence businesses have and the responsibilities placed on them today are massive.

Before diving into a corporate social responsibility initiative, it’s important to take a step back and consider developing a complete CSR strategy. This article will help walk you through how you can implement a successful CSR strategy for your company.

What is a CSR strategy?

A corporate social responsibility (CSR) strategy is the total plan a business has to build, execute and optimize its CSR initiatives.

There are four types of CSR, and a CSR strategy will help you define which one is best for your business, determine the ways in which you can implement it and track the results of your efforts.

The four areas of CSR are:

Philanthropic responsibility
Environmental responsibility
Ethical responsibility
Economic responsibility

A good CSR strategy builds a business case around how your chosen areas of CSR can integrate into your company growth plan. It will make sure that your initiative stays on track, hitting every KPI along the way.

Why is a CSR strategy important?

Having a CSR strategy is essential to ensuring your business delivers effective corporate social responsibility initiatives. A CSR strategy will enable your business to remain goal-driven in its CSR initiatives and, ultimately, be successful.

When you create a CSR strategy, you’ll align CSR with other business goals like improving employee engagement, increasing investor appeal and solidifying your brand reputation. CSR done well can indirectly (positively) affect a number of ROI-centered goals.

How does CSR integrate into business strategy?

Linking your CSR strategy to your company’s purpose and values is vital. Once you’ve identified them, you’ll be able to align your CSR strategy to them. You can then show how your CSR program is contributing to your long-term strategy, helping to support continued investment.

There are a few ways CSR can integrate into business strategy. It depends on your company’s needs and goals; for example, whether it’s to have an impact, engage and retain employees or engage consumers.

CSR can help with employee retention and employer branding, so it can be aligned with your human resources strategy.

It’s also shown to increase customer retention and loyalty, so it can integrate into your sales growth strategy or customer success strategy. In fact, 68% of online consumers in the U.S. and U.K. would consider ending a relationship with a brand because of poor or misleading CSR.

Or, if your business is seeking investment, it’s worth highlighting that companies with global sustainable development strategies are more likely to win investment opportunities.

The fact is, CSR can actively help a business work toward a larger profit margin while doing great things; it’s a win-win.

Who decides the CSR strategy?

Developing a CSR strategy should be a collaborative effort. However, the project will need one core manager to lead the way, assign responsibilities and ensure everyone stays on track.

Some companies have a CSR department, while others assign CSR to Human Resources teams or Office Managers. Depending on your CSR goals, it can also be the responsibility of your Marketing or Communications teams.

Deloitte found that CSR is now a “CEO-level business strategy — defining the organization’s very identity,” and 46% of survey respondents said “CEOs and top executives play the most prominent roles in driving societal impact,” or they are the main drivers of CSR strategies.

How to create a successful CSR strategy

Above, we looked at what a corporate social responsibility strategy is. Here are the steps you’ll need to take to ensure your strategy runs smoothly.

1. Define the concept of CSR

Especially today, CSR can mean different things to different people. A person’s culture and past experiences with CSR will help determine their opinion and definition.

At this stage, it will be important to speak to and understand all stakeholders’ concerns; leadership, employees, consumers, professional organizations or unions, local communities and environmental groups. Once you’ve understood their concerns, you can consider where there is a match and how your CSR program can address these.

Once you know everyone understands what CSR is, you can start discussing it without bias or misconceptions. You can define — or redefine — what CSR means to your business and ensure you have everyone’s buy-in.

2. Understand the benefits of CSR

Before you start developing your CSR strategy, you’ll need to get the project approved with buy-in from internal stakeholders.

It’s important to spend time researching the benefits of CSR and finding examples of businesses that have profited from having a successful CSR plan in place.

Once you have an idea of the ways your company can benefit from CSR, you can work on a business case that will be specific for your company.

3. Get project approval

Launching a CSR plan will require a certain amount of time and budget. You can use tools; however, until you get to that point you’re going to need people power.

When putting together your business case for implementing a CSR strategy, ensure you include all of the potential benefits a CSR program can bring to your company.

Your business case doesn’t need to include any initiatives you’ll be launching or even the tools and people required. It can be broader, covering what CSR will do for your business and the initial resources that will be needed.

4. Set project goals

With your CSR business plan in place, you’ll be ready to set goals. Setting goals and KPIs will be important for demonstrating your strategy is positively impacting your business and that your CSR project is on track.

In the early stages, these goals can be anything from winning board members’ buy-in to having 100% of employees understand what CSR is or hosting meetings with potential CSR SaaS providers.

Once your program has been launched, they can be more KPI-oriented like employee engagement rates, online brand sentiment or lower customer churn.

5. Run a current CSR analysis

Conduct a full review of any CSR initiatives you currently have running, be it officially or unofficially, within your company.

Perhaps employees have already set up something that could grow bigger with new support from the company? For example, fundraisers like bake sales, community running groups, volunteering days, in-office recycling, meat-free Fridays or eliminating single-use plastics.

Also, think about existing programs and events you may have, such as an employee of the month award, team brunches or well-being initiatives.

If any past CSR programs didn’t take off, then look at the project tools and communication styles involved and try to identify the problem.

Look at all of your current areas of CSR and note what you currently have. Bring these pieces together to inform your strategy and connect to what your employees are interested in and the broader business strategy, including long-term goals.

6. Research your CSR initiatives

You’ve established the benefits that CSR can bring to your business, you’ve won company buy-in and now it’s time to identify your initiative and digital CSR tools.

This stage includes researching social and environmental initiatives that you think would be a good fit for your company’s mission and vision, as well as those that align with your employees’ values.

Your corporate social responsibility research can also involve examining what other companies in your industry are doing. How are they aligning CSR to their company purpose? This could inspire some great ideas or possible collaborations of your own.

Lastly, think about the tools you may need to support your CSR efforts. Consider technology that empowers your employees to take the initiative and communication tools to help you stay on top of everything.

7. Launch your CSR campaign

Once you’ve done all of the above, you should be in a comfortable position to launch your CSR campaign — this is potentially the most important part of your CSR plan.

You’ll need to clearly communicate your CSR launch to the right stakeholders. These will include:

Shareholders or investors
External stakeholders, partners and local communities
The press
Customers
Fans and followers

Make sure you have a clear communication plan with priorities for this group so your initiative launches with maximum impact. For example, your employees will need to know the ins and outs of your initiative before your fans and followers.

8. Manage your program to success

Next to consider is the maintenance of your CSR program and campaigns. What KPIs or goals have you set?

Consider your larger corporate social responsibility mission, but also consider the smaller KPIs and data points that help you get there. For example, if your initiative was to plant 100 trees — with one planted each time an employee rode a bike to work instead of driving:

How many trees have you planted?
How many individual employees have biked to work?
Has your employee engagement rate and happiness increased?

It’s a good idea to collect qualitative feedback alongside quantitative feedback. Ask employees how they’re feeling about your CSR initiatives. If they’re not engaging, then how can you adapt your activities to make them more relatable, offer them more choice and win employees’ interest?

CSR strategy best practices

When creating your corporate social responsibility strategy, there are a few best practices to help make the process smoother and more efficient.

Define your WHY: Your CSR strategy needs a reason for being. From day 1, align on the purpose and vision for the strategy. It will help define every step you make in its creation.

Assemble a stellar team: Efficient CSR initiatives need top talent to get them up and running. Assemble an internal team from multiple departments to help you build your strategy. Socially responsible companies start with socially responsible employees.

Ask for feedback: For your CSR program to be successful you’ll need feedback. This comes from your employees. Ask them what they would like to see and understand the social or environmental challenges they’re passionate about.

Strategize & benchmark: Look toward socially responsible companies for guidance. All of the best CSR leaders had to start somewhere. See which ethical business practices are working well for similar companies, understand their successful CSR initiatives and benchmark your own strategy against them.

Start with a soft launch: A strategic corporate social responsibility launch is released in phases. Get your internal CSR leaders aligned on the launch calendar and start with a soft launch. With feedback given at each step, this will give your team time to adjust your strategy accordingly.

Launch with a stellar campaign: If you’ve followed our steps and best practices, your CSR strategy will give your business a competitive advantage and you will start seeing social or environmental benefits. Eventually, you’ll see a result in your financial performance.

Wrapping it all up

Implementing a CSR strategy is important for ensuring your corporate social responsibility initiative is effective.

By following the eight steps above, you’ll be giving your CSR program the sturdiest foundations possible — benefiting your business and the causes you’re supporting.

Corporate social responsibility (CSR) FAQs

A CSR strategy covers every aspect of your corporate social responsibility initiatives. The strategy is the key document to tie your CSR program and activities to your company’s larger business strategies and ensure your corporate philanthropy remains on track.

Who creates the CSR strategy?

The CSR strategy is usually created by the CSR department, Human Resources and/or Office Managers. These teams will often work with CSR service providers, like Benevity, to align on strategic planning, CSR activities, sustainability initiatives and key performance indicators.

How to Implement Corporate Social Responsibility (CSR) in Your Businesses – A Step-by-Step Guide

May 10, 2023

Social For Action

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Table of Contents

What Is CSR Strategy?

CSR (Corporate Social Responsibility) strategy refers to a company’s plan and initiatives to operate in an ethical and sustainable manner while fulfilling its responsibilities towards society, the environment, and its stakeholders.

A CSR strategy typically involves identifying the social and environmental impacts of the company’s operations and taking measures to mitigate any negative impacts while maximizing positive impacts. It may include initiatives related to reducing the company’s carbon footprint, improving working conditions for employees, supporting local communities, and promoting diversity and inclusion.

A well-designed CSR strategy can help a company build its brand and reputation, attract and retain employees, increase customer loyalty, and ultimately lead to long-term profitability.

Why Have CSR Strategies?

There are several reasons why companies should have CSR (Corporate Social Responsibility) strategies:

1. Reputation and Brand Building:

A well-executed CSR strategy can enhance a company’s reputation and brand image. Customers and stakeholders are more likely to do business with a company that is perceived as socially responsible and ethical.

2. Increased Employee Engagement:

CSR initiatives can increase employee engagement by creating a sense of purpose and pride in the company’s values and impact. This, in turn, can lead to higher productivity, lower turnover, and a more positive workplace culture.

3. Reduced Risk:

CSR initiatives can help companies mitigate risks related to environmental, social, and governance issues. By proactively addressing these issues, companies can avoid negative impacts on their business and reputation.

4. Cost Savings:

CSR initiatives can also lead to cost savings by reducing waste, improving energy efficiency, and creating more sustainable supply chains.

5. Positive Impact on Society:

Finally, CSR strategies can have a positive impact on society and the environment. By engaging in responsible business practices, companies can help address social and environmental challenges and contribute to the well-being of the communities in which they operate.

CSR And Its Importance For Businesses

CSR (Corporate Social Responsibility) is important for businesses for several reasons:

Reputation and Brand Building: A strong CSR strategy can help businesses build a positive reputation and brand image. Customers and stakeholders are more likely to support companies that are perceived as socially responsible and ethical.
Increased Employee Engagement: CSR initiatives can create a sense of purpose and engagement among employees, leading to higher productivity, lower turnover, and a more positive workplace culture
Mitigating Risks: CSR initiatives can help businesses mitigate risks related to environmental, social, and governance issues. By proactively addressing these issues, companies can avoid negative impacts on their business and reputation.
Cost Savings: CSR initiatives can also lead to cost savings by reducing waste, improving energy efficiency, and creating more sustainable supply chains.
Meeting Stakeholder Expectations: Today, stakeholders including investors, customers, employees, and regulators expect businesses to operate in a responsible and sustainable manner. By having a robust CSR strategy, businesses can meet these expectations and demonstrate their commitment to ethical and sustainable business practices.
Positive Impact on Society: Finally, CSR initiatives can have a positive impact on society and the environment. By engaging in responsible business practices, businesses can help address social and environmental challenges and contribute to the well-being of the communities in which they operate.

Step-By-Step Guide For Businesses To Implement CSR

Corporate Social Responsibility (CSR) is a crucial aspect of any business, as it involves an organization taking responsibility for its impact on the environment and society. By implementing CSR, a business can enhance its reputation, improve employee morale, and contribute to the betterment of the community it operates in.

Here is a guide for businesses to implement CSR effectively:

Step 1. Assessing Your Business and Setting Goals

Begin by assessing your business’s current social and environmental impact. This involves identifying your company’s strengths, weaknesses, opportunities, and threats (SWOT analysis). Then, set clear CSR goals and objectives that align with your company’s values and business strategy.

Step 2. Building a CSR Team and Engaging Stakeholders

Assign a dedicated CSR team that will oversee the implementation of the CSR strategy. It’s important to engage internal and external stakeholders, including employees, customers, suppliers, and community groups, in the process of developing and implementing the CSR strategy.

Step 3: Identifying CSR Opportunities and Initiatives

Conduct research to identify the most relevant CSR issues and initiatives for your business. This can involve analyzing stakeholder expectations, reviewing industry best practices, and conducting a materiality assessment to identify the most important issues for your business and stakeholders.

Step 4: Implementing and Managing CSR Activities

Develop a detailed action plan that outlines the specific initiatives and activities you will undertake to achieve your CSR goals. This plan should include timelines, budgets, and responsibilities. Ensure that your CSR activities are integrated into your business operations and that they are supported by appropriate policies, procedures, and management systems.

Step 5: Measuring and Evaluating CSR Impact

Develop key performance indicators (KPIs) and metrics to measure the impact of your CSR activities. This can include tracking progress against your CSR goals, conducting impact assessments, and gathering feedback from stakeholders. Use this data to identify areas for improvement and refine your CSR strategy.

Step 6: Communicating CSR Activities and Impact

Finally, communicate your CSR activities and impact to internal and external stakeholders. This can include regular reporting, social media updates, and stakeholder engagement events. Be transparent about your CSR activities, successes, and challenges, and use this communication to build trust and enhance your reputation as a socially responsible company.

In conclusion, implementing CSR is essential for any business that wants to take responsibility for its impact on the environment and society. By following the guidelines outlined in this guide, businesses can identify key areas for CSR, set measurable goals, develop a CSR policy, assign responsibility, partner with stakeholders, monitor and report progress, and continuously evaluate and refine their CSR initiatives. By doing so, businesses can enhance their reputation, improve employee morale, and contribute to the betterment of the community they operate in, all while remaining aligned with their business values.

Turn Your CSR Vision Into Reality With Social For Action

Are you looking to turn your corporate social responsibility (CSR) vision into a reality? Look no further than Social For Action, a crowdfunding platform that enables businesses to create impactful social projects and gather support from a community of like-minded individuals.

With Social For Action, you can easily launch a campaign for your CSR project, set a funding goal, and share your vision with potential supporters. Whether you’re looking to address environmental issues, promote social justice, or support local communities, Social For Action provides a powerful platform to help you make a real difference.

By harnessing the power of crowdfunding, you can engage with your stakeholders and build a community around your CSR initiatives. With Social For Action, you can inspire your employees, customers, and partners to join you in making a positive impact on the world.

So what are you waiting for? Visit Social For Action today and start turning your CSR vision into a reality!

About Author

Social impact and social change remains the core of the Sakal's beliefs even today and with this Sakal is introducing its own Crowdfunding platform - Social For Action.

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What Is Corporate Social Responsibility?

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

Corporate social responsibility (CSR) is a management concept that describes how a company contributes to the well-being of communities and society through environmental and social measures. CSR plays a crucial role in how brands are perceived by customers and their target audience. It may also help attract employees and investors who prioritize the CSR goals a company has identified.

Learn about the importance of CSR and how it can impact the success of your business below.

What is corporate social responsibility?

Corporate social responsibility is a type of business self-regulation with the aim of social accountability and making a positive impact on society. Some ways that a company can embrace CSR include being environmentally friendly and eco-conscious; promoting equality, diversity, and inclusion in the workplace; treating employees with respect; giving back to the community; and ensuring business decisions are ethical.

CSR evolved from the voluntary choices of individual companies to mandatory regulations at regional, national and international levels. However, many companies choose to go beyond the legal requirements and embed the idea of “doing good” into their business models.

There is no one way a company can embrace CSR, but one thing is certain – to be perceived as genuine, the company’s practices need to be integrated into its culture and business operations. In today’s socially conscious environment, employees and customers place a premium on working for and spending their money on businesses that prioritize CSR. They can detect corporate hypocrisy.

To ensure CSR authenticity, a company should look at its values, business mission and core issues and determine which initiatives best align with the business’s goals and culture. The business can do this internally or hire a third party to conduct an assessment.

Reviewing the United Nations 17 Sustainable Development Goals is a good place to start. While goals like Good Health and Well-Being or Gender Equality can apply to most businesses, specific goals like Life Below Water or Affordable and Clean Energy may be relevant to select industries like water technology or energy providers.

Why CSR is important

There are many reasons for a company to embrace CSR practices.

1. It improves customers’ perception of your brand.

It’s increasingly important for companies to have a socially conscious image. Consumers, employees, and stakeholders prioritize CSR when choosing a brand or company, and they hold corporations accountable for effecting social change with their beliefs, practices, and profits.

“What the public thinks of your company is critical to its success,” said Katie Schmidt, founder and lead designer of Passion Lilie. “By building a positive image that you believe in, you can make a name for your company as being socially conscious.”

To stand out among the competition, your company needs to prove to the public that it is a force for good. Advocating and raising awareness for socially important causes is an excellent way for your business to stay top-of-mind and increase brand value.

The Kantar Purpose 2020 study demonstrated a direct correlation between perceived positive impact and brand value growth . Companies that the public considers highly impactful demonstrated a brand value growth of 175% over 12 years, while businesses with a low positive impact showed only 70% growth.

Schmidt also said that sustainable development could help a business financially. For example, using less packaging and less energy can reduce production costs.

2. It attracts and retains employees.

Consumers aren’t the only ones drawn to businesses that give back. Susan Cooney, head of global diversity and inclusion at Symantec, said that sustainability strategy is a big factor in where today’s top talent chooses to work.

“The next generation of employees is seeking out employers that are focused on the triple bottom line: people, planet and revenue,” she said. “Coming out of the recession, corporate revenue has been getting stronger. Companies are encouraged to put that increased profit into programs that give back.”

According to Deloitte’s 2021 Millennial and Gen Z Survey , the modern workforce prioritizes culture, diversity, and high impact over financial benefits. An estimated 44% of millennials and 49% of Gen Zers rely on their personal ethics in determining the type of work and companies they’d join. The respondents of the Porter Novelli Purpose Tracker 2021 report go even further, with 70% saying they wouldn’t work for a company without a strong purpose.

What’s more, employees that share the company’s values and can relate to its CSR initiatives are much more likely to stay. Deloitte’s 2020 Global Marketing Trends Report shows that purpose-driven companies retain talent up to 40% more than their competitors. Considering that the estimated cost of losing an employee averages 40% of their annual salary, according to a report by the Washington Center for Equitable Growth, offering your team a sense of purpose and meaning in their work is worth the effort.

3. It increases your appeal to investors.

By demonstrating a developed CSR program and initiatives, your company is bound to become more appealing to both current and future investors. CECP’s influential 2021 Giving in Numbers report shows that investors play a growing role as key stakeholders in corporate social responsibility. Almost 80% of surveyed businesses were open to providing them with data and considering their perspectives on sustainability. Just like customers, investors are holding businesses accountable when it comes to social responsibility.

At the same time, a company that takes CSR seriously signals to both investors and partners that it’s interested in long-term as well as short-term gain. CSR goes hand in hand with environmental, social, and governance (ESG) metrics that help external analysts quantify the company’s social efforts, and becomes a key factor for investors’ consideration and continued interest.

4 types of corporate responsibility your business can practice

In recognition of how important socially responsible efforts are to their customers, employees and stakeholders, many companies focus on four broad CSR categories.

Environmental efforts: One primary focus of CSR is the environment. Businesses have large carbon footprints, regardless of size. Any steps a company can take to reduce its footprint is considered good for both the company and society.
Philanthropy: Businesses can practice social responsibility by donating money, products or services to social causes and nonprofits. Larger companies tend to have plentiful resources that can benefit charities and local community programs; however, even as a small business, your efforts can make a difference. If you have a specific charity or program in mind, reach out to the organization. Ask them about their specific needs and whether a donation of money, time or your company’s products would best help them.
Ethical labor practices: Companies can demonstrate CSR by treating employees fairly and ethically . This is especially true of businesses that operate in international locations with labor laws that differ from those in the U. S.
Volunteering: Participating in local causes or volunteering your time (and your staff’s time) to community events says a lot about your company’s sincerity. When your company does good deeds without expecting anything in return, you express concern (and support) for specific issues and social causes.

Building a socially responsible business

While startups and small companies don’t have the deep financial pockets that enterprises have, their efforts can have a significant impact, especially in their local communities.

“Even 5%, though it might not sound like a lot, can add up to make a difference,” Schmidt said. “When thinking of ways to donate and give back, start local, and then move from there.”

When identifying and launching a CSR initiative, involve your employees in the decision-making process. Create an internal team to spearhead the efforts and identify organizations or causes related to your business or that employees feel strongly about. You’ll increase engagement and success when you contribute to something that matters to your employees. Involving your employees in the decision-making process can also bring clarity and assurance to your team.

“If decisions [about CSR] are made behind closed doors, people will wonder if there are strings attached and if the donations are really going where they say,” Cooney said. “ Engage your employees [and consumers] in giving back. Let them feel like they have a voice.”

Whichever strategies you use for sustainable development, be vocal. Let your consumers know what you are doing to be socially conscious. [Related read: PayPal’s Mission for Corporate Social Responsibility ]

“Consumers deserve to share in the good feelings associated with doing the right thing, and many surveys have found that consumers are inclined to purchase a sustainable product over a conventional alternative,” Cooney said. “Announcing these benefits is a win-win from both a commercial and sustainability perspective.”

What to avoid when creating a socially responsible business model

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

1. 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 .

2. Don’t use CSR as a marketing scheme.

Don’t use CSR opportunities solely for marketing purposes. Schmidt said 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. Schmidt said employees and consumers react positively to companies that embrace long-term social responsibility.

3. 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. [Related read: 14 Examples of Socially Responsible Businesses ]

Undertaking CSR initiatives is a win for everyone involved. The impact of your actions will not only appeal to socially conscious consumers and employees, but can also make a real difference in the world.

CSR certifications

While many companies self-assess their CSR efforts, often the most practical and trusted way to prove your company’s social accountability to the public is to undergo a third-party social impact assessment.

These three corporate social responsibility certifications can help you achieve public recognition for your sustainability and CSR efforts.

B-corp certification

Certified B corporations, or B-corps, are companies verified by B Lab to meet high standards of social and environmental performance, accountability, and transparency. To become a B-corp, a company must undergo a rigorous and holistic verification process every three years, integrate B-corp commitments to all stakeholders (rather than only shareholders) into its governing documents, and pay a sales-based annual fee.

While B-corp status is mainly associated with multinationals like Patagonia or Ben & Jerry’s, small businesses and startups that strive for social and environmental excellence can also receive this CSR certification. The first step is to complete the free and confidential B Impact Assessment on the B Lab website and receive a minimum score of 80. If you meet the baseline, you can submit the impact assessment for review and start the verification process.

ISEAL code compliance

ISEAL Alliance is a global membership organization for credible sustainability standards whose members include Fairtrade International, Gold Standard, Alliance for Water Stewardship and more. An assessment from ISEAL is carried out by an independent third-party verification provider that determines whether a business meets Codes of Good Practice and can be deemed ISEAL Code Compliant. This assessment offers a reputable seal of approval for companies that emphasize sustainability.

In some circumstances, verifications from ISEAL members can directly impact business continuity. For example, the absence of a certification from the Roundtable for Sustainable Palm Oil can effectively close down a supply chain for some consumer brands.

SASB standards

The Sustainability Accounting Standards Board is one of the most established environmental, social, and governance (ESG) guidance frameworks, providing standards for disclosing the financial impact of a company’s sustainability efforts. In other words, it allows businesses to communicate the financial outcomes of their CSR and ESG measures to investors and other stakeholders.

SASB Standards are evidence-based, cost-effective, market-informed, and industry-specific, covering 77 industries. These standards help produce structured, comparable, and standardized data that is perfect for both internal and external communications of CSR and ESG impacts.

Examples of CSR companies

If you’re looking for CSR inspiration for your business, here are six companies practicing corporate social responsibility on a large scale.

LEGO: The toy company has invested millions of dollars into addressing climate change and reducing waste. LEGO’s environmentally conscious efforts include reduced packaging, sustainable materials, and investments in alternative energy .
TOMS: TOMS donates one-third of its net profits to charities that support physical and mental health as well as educational opportunities. During the pandemic, the brand directed all charitable donations to the TOMS COVID-19 Global Giving Fund.
Johnson & Johnson: The brand Johnson & Johnson focuses on reducing its environmental impact by investing in alternative energy sources. Globally, Johnson & Johnson also works to provide clean, safe water to communities.
Starbucks: The global coffee chain has implemented a socially responsible hiring process to diversify its workforce. Its efforts are focused on hiring more veterans, young people looking to start their careers, and refugees.
Google: Google has demonstrated its commitment to the environment by investing in renewable energy sources and sustainable offices. CEO Sundar Pichai is also known to take stands on certain social issues.
Pfizer: The pharmaceutical company’s focus on corporate citizenship is reflected in its healthcare initiatives, which include spreading awareness about non-infectious diseases and providing accessible health services to women and children in need.

Corporate social responsibility FAQs

Corporate social responsibility is a modern approach to running a business. Here are some of the most frequently asked questions about it.

What is corporate social responsibility (CSR)?

Corporate social responsibility is a way of describing how companies measure and control their impact on society. This includes a company’s contributions – both positive and negative – to the economy, environment and greater community.

Who is CSR for?

Businesses of all sizes can choose to introduce a comprehensive CSR program or selected initiatives and reap the associated benefits. No matter the size or maturity of your business, an investment in ethical behavior and sustainable practices can improve your brand value, build customer trust, grow your company, and improve the bottom line.

What are the benefits of CSR for companies?

CSR can be beneficial to a company in several ways. The first is by improving its brand image . When customers or clients see evidence that a business is socially responsible, they tend to respond positively.

The second benefit is improving employee morale . Morale tends to be higher at companies that invest effort and resources into ethical and socially responsible behavior.

The third involves appealing to new talent. Modern employees often choose purpose-driven and environmentally conscious companies over financial benefits.

Lastly, CSR-active companies attract investors and partners. A company that is willing to invest in long-term policies and improvements offers security to potential investors.

What are examples of CSR initiatives?

Some examples of CSR components are reducing carbon footprint and energy consumption, engaging in wildlife conservation initiatives, encouraging charity and volunteer work, supporting local communities, improving labor policies, ensuring diversity and equality in the workplace, investing in nonprofit organizations, and guaranteeing ethically sourced materials.

Whichever practices you employ, make sure they are authentic and match your corporate values. Otherwise, your business might be accused of greenwashing .

How do you monitor CSR?

There are a few key ways to measure CSR. The first is to break CSR goals into categories, such as philanthropy, labor practices, and environmental efforts.

To track the success of these investments, look for measurable key performance indicators. How much has your company’s carbon footprint changed? How many people did you reach with a charitable effort? Monitor new developments and keep a pulse on general public perception of issues associated with your company’s social causes.

Skye Schooley, Nicole Fallon and Sammi Caramela contributed to the writing and reporting in this article. Source interviews were conducted for a previous version of this article.

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Corporate social responsibility (CSR): A one-stop guide

A board member with a specialty in corporate social responsibility.

What is Corporate Social Responsibility?

What is corporate social responsibility (CSR)? As with most business concepts, corporate social responsibility has several definitions, but these broadly coalesce around some core themes. Investopedia ’s definition of corporate social responsibility is “a self-regulating business model that helps a company be socially accountable — to itself, its stakeholders, and the public.” Harvard Business Review sees CSR’s primary goal as “to align a company’s social and environmental activities with its business purpose and values.” At the same time, the European Commission defines CSR as “the responsibility of enterprises for their impact on society.” Diligent's corporate social responsibility definition: CSR is an organization's obligation to act ethically and to the benefit of the community it is a part of and depends on.

Why Have More Companies Become Concerned About Corporate Social Responsibility in Recent Years?

The importance of corporate social responsibility (CSR) has undoubtedly grown over the last decade. When looking at why CSR is increasingly important, one should consider the impact of CSR on all elements of corporate life. Alongside the altruistic drivers — the growing recognition of the importance of corporate social responsibility to society — organizations acknowledge the importance of corporate social responsibility in business. CSR’s impact on a brand’s image has been evident in recent years, with numerous examples of a company’s supply chain, employment practices and environmental performance having the potential to derail its reputation. So, what is driving this increased significance of corporate social responsibility? CSR encompasses many different strands: environmental governance, ethical concerns, community and employee relations – and the drivers can differ for each of these strands. For instance, pressure from the media and investors in recent years has brought environmental sustainability to the top of the board’s agenda . A more proactive approach to corporate social purpose may have been driven by a desire to demonstrate a commitment to social purpose to shareholders and believe that this will impart a competitive edge. This can be cited as a key reason why companies engage in corporate social responsibility.

Importance of Corporate Social Responsibility

The growing public awareness of CSR issues has led to an expectation that the companies we spend money with are “doing the right thing” regarding their social citizenship. The value of corporate social responsibility (CSR) is demonstrated when businesses’ approaches mirror their customers’ priorities. All too often, though, there remains a mismatch between public preferences and corporate performance. The Telegraph reports that in 2019, while 59% of consumers expected companies to take a stand on climate and environmental issues, only 16% of business leaders cited CSR as their top three business concerns. When looking at the importance of corporate social responsibility, the other issue to consider is the breadth of CSR and whether, as a term and a concept, it’s specific enough to hone in on the core issues you should be considering. ESG — environmental, social and governance — is a term that is increasingly being used interchangeably with CSR. But strictly speaking, the two are different. Stakeholder intelligence experts Alva sum this up nicely, noting that: “Without CSR, there would be no ESG, but the two are far from interchangeable. While CSR aims to make a business accountable, ESG criteria make its efforts measurable.” In some cases, the potential breadth of issues covered under CSR and the lack of tangible ways to measure CSR efforts have meant that companies’ corporate social responsibility initiatives have failed to achieve their potential. The number of projects that potentially fall under the CSR banner can make it difficult to manage or quantify value. Enter ESG. While ESG encompasses CSR initiatives, it also provides a clear framework, with a growing number of regulatory imperatives — more of which below — around ESG performance and reporting . Will boards’ efforts in the future move away from CSR and towards ESG? We will have to wait and see.

History of Corporate Social Responsibility

Because it has attracted increasing attention in recent years, it might be assumed that corporate social responsibility is a relatively new concept – but the belief that corporations have a responsibility towards society is not new . In fact, it’s possible to trace the history of corporate social responsibility (CSR) back through several centuries, and corporate social responsibility as a phrase has been in use since the 1950s. It’s generally accepted, though, that the basis of what we understand by corporate social responsibility today was created in 1979 when Archie B. Carroll published his “CSR pyramid,” which breaks CSR down into four areas:

Economic responsibility
Legal responsibility
Ethical responsibility
Philanthropic responsibility

Carroll’s corporate social responsibility theory is that CSR and business are not mutually exclusive but that companies must address their commercial obligations before seeking to meet ethical or philanthropic ones.

CSR Timeline

1953 Howard R Bowen publishes Social Responsibilities of the Businessman, widely viewed as the first book to comprehensively cover business ethics and social responsibility. 1970 American economist Milton Friedman publishes an article titled The Social Responsibility of Business is to Increase its Profits. The first Earth Day takes place. 1976 Founding members of the “Five Percent Club” – including Dayton Corporation (later Target) and General Mills – commit to using a proportion of their profits for philanthropy. 1984 R. Edward Freeman publishes Strategic Management: A Stakeholder Approach¸ often considered the point at which CSR became part of mainstream management theory. 1999 The first mainstream sustainable investment indices, The Dow Jones Sustainability Indices (DJSI), are launched. 2000 The United Nations Global Compact , a voluntary initiative based on CEO commitments to implement universal sustainability principles, is launched in front of 44 business CEOs and 20 heads of civil society organizations. 2000 The first full version of the Global Reporting Initiative’s Sustainability Reporting Guidelines is released. 2002 The Johannesburg Stock Exchange becomes the world’s first exchange for requiring listed companies to report on sustainability. 2011 The United Nations issues its Guiding Principles on Business and Human Rights , a global standard aimed at preventing and addressing human rights abuse risk linked to business activity. 2015 The Task Force on Climate-related Financial Disclosures (TCFD) is established to promote climate-related reporting in UK companies’ financial information. 2015 The UN’s Sustainable Development Goals are launched, emphasizing the role of business in achieving the global development agenda. 2017 Gender pay gap reporting becomes mandatory for all companies with more than 250 employees in the UK.

Role and Purpose of CSR

CSR is increasingly becoming embedded in management thinking and corporate practice. This begs the question: what is the purpose of corporate social responsibility? Is it something that boards should adopt blindly, without questioning the role of corporate social responsibility within their business? In 2015, Harvard Business Review surveyed 142 managers from Harvard Business School’s CSR executive education program. This research found that “most companies practice a multifaceted version of CSR that runs the gamut from pure philanthropy to environmental sustainability to the active pursuit of shared value.” Therefore, the role and purpose of corporate social responsibility can be a broad concept. The scope of corporate social responsibility within your organization will depend somewhat on your business’s sector, objectives, and potential impact on the environment and society. For your business, a CSR priority may be engaging with your local community and providing practical help or financial support to local causes. Or – particularly if your industry is a historic pollutant – you may prioritize environmental performance, reduce your carbon footprint, and minimize your impact. Or you may choose to focus on an issue that’s relevant to your business; diversity, inclusion, ethical supply chains – and channel your efforts into that. The wide range of themes falling under the CSR umbrella means that you have no shortage of areas to focus your CSR activities.

Challenges Facing CSR

As with all business requirements, particularly those newly adopted or growing in complexity or focus, there are challenges inherent in corporate social responsibility (CSR) strategies. While we’re moving indubitably towards a more CSR-focused business landscape, that doesn’t mean that the road towards CSR is without its bumps.

Key Challenges of Corporate Social Responsibility

1) the ability to deliver clear and transparent reporting.

Transparency around CSR-related matters is key – whether that’s your D&I strategy, your environmental approach or your human rights policy. Shareholders and stakeholders expect you to act on CSR issues and evidence your achievements candidly. In some cases, as with The UK FCA’s requirements around TCFD , this is mandated in your formal financial reporting. Increasing numbers of companies will face the challenge of delivering clear, comprehensive reporting on CSR (and wider ESG) objectives as pressure grows to document and communicate their performance.

2) A need To Define Clear Priorities and Goals

This is one of the key challenges facing corporate social responsibility strategies. Long before they can report on their successes, organizations need to identify what CSR means and how they will prioritize key actions. There are so many aspects of corporate social responsibility that this is very much an individual question for each business. There can be dissent over the focus of efforts, even within organizations.

3) Stakeholder Pressure

Sometimes, areas of focus are informed by pressure from investors and other stakeholders. Increasingly, a company’s position on CSR and ESG is a critical factor in investor decisions and customer choices. As reporting grows ever-more comprehensive, mandated and publicized, it will become easier for potential investors and buyers to make decisions based on CSR performance. Companies will face growing pressure to meet and report on their objectives.

4) Measurement of CSR Activity

When CSR began as a “nice to do,” there was less imperative to have clear and comparable measures of performance. Today, boards need not only track their performance against the CSR objectives they have set but to compare themselves to their peers and competitors. But accurate information on your own and others’ performance can be hard to pinpoint, especially in areas like executive pay, where companies can closely guard their data. Accessing centralized, consistent and reliable data can be a crucial challenge for companies wanting to measure and track their CSR efforts.

5) Making the Connection Between CSR, Value and Profitability

Businesses may adopt and expedite CSR strategies due to a genuine desire to improve their social purpose. Still, the ability to achieve “social capital” from their achievements cannot be overlooked. Communicating your ESG strategy to investors and other stakeholders, from the value of current initiatives to the potential of new opportunities, will help to realize the advantages of corporate social responsibility strategies. The effort and cost of monitoring performance across business functions, and the work involved in translating this into business metrics, can be a challenge if you are operating without an integrated approach across all your CSR and ESG programs.

Advantages and Disadvantages of Corporate Social Responsibility

It would be easy to imagine that there are only positives associated with CSR; advocates of corporate social responsibility argue that it only has upsides. But as with any business strategy, there are many aspects of corporate social responsibility. Each brings implications in terms of resource, cost and other considerations that companies should be alive to. There are arguments for and against corporate social responsibility adoption.

3 Benefits of Corporate Social Responsibility Strategies

1) improved profitability and value.

This should be one of the most welcome advantages of corporate social responsibility from the business’s perspective. Reducing waste and increasing energy efficiency doesn’t just improve the environment and your CSR credentials; it should also deliver a reduction in your costs. Therefore, there are direct benefits to CSR adoption in addition to the obvious altruistic and reputational ones. As well as lower costs, there are opportunities for greater profits. Customers proactively support businesses that share positive CSR and ESG approaches — and are prepared to pay a premium for doing so. Research from Tilburg University in the Netherlands found that consumers are ready to pay an additional 10% for products they deem socially responsible; there are clear commercial benefits of a more socially responsible strategy. 2) Improved investor relations As your CSR performance becomes known, you should enjoy improved access to capital, as investors are increasingly confident in your business. Shareholder pressure around companies and corporate social responsibility increase constantly; the expectation that corporates will adopt socially responsible policies is well-documented. It stands to reason that if you’re ahead of the game here, you will have a more harmonious relationship with all your stakeholders.

3) Ease of compliance with CSR-focused regulatory requirements

As we mentioned above, CSR and ESG are increasingly in the spotlight regarding corporate reporting. Compliance with the Task Force on Climate-related Financial Disclosures reporting requirements, for instance, will soon be mandatory in the UK and is encouraged elsewhere. A proactive CSR approach will give you a strong story to share and enable you to comply with requirements around CSR reporting. But it’s important not to downplay the challenges of implementing a CSR strategy.

4 Common Arguments Against Corporate Social Responsibility

1) the cost and challenges of implementation.

There’s no getting over that CSR costs money. CSR and wider ESG reporting require dedicated focus, demanding resources and budget. Risk-assessing your CSR approach takes time and can be a challenge. Many boards lack full oversight of the issues they need to consider — the risks faced, the board and senior team’s composition, any conflicts of interests. Once organizations identify their priorities, they need to operationalize their CSR goals, turning insights into a roadmap for action. While there are tools that can make this easier, businesses shouldn’t underestimate the time and money that an effective CSR strategy entails. For smaller organizations particularly, the resources needed can be a barrier to CSR.

2) The Fear of Opening the Organization To Scrutiny

There can also be a fear of “opening the doors” on CSR, inviting inspection of the company’s ethics, supply chain, environmental performance and philanthropy. CSR is a bit of a double-edged sword, in the sense that organizations need to promote their CSR activity to gain public approbation for it — but in doing so, open themselves up to criticism of their approach. Any communication of your achievements on corporate social responsibility emphasizes the work yet to be done. Companies may wonder whether the potential reputational damage from negative publicity around CSR is worth the work involved in devising and publicizing a corporate social responsibility strategy. Amplifying this, shareholders, stakeholders and consumers are increasingly alive to the concept of “greenwashing,” the practice of overstating environmental or other ethical credentials. An organization needs to ensure its CSR reporting is comprehensive, honest and frank about any shortcomings to avoid it being questioned and discredited.

3) Conflicting Priorities and Objectives

We talked above about the cost of implementing new corporate social responsibility approaches. Any company with shareholders has a fiduciary duty to those shareholders to maximize the company’s profits, and the CEOs of commercial enterprises tend to be tasked with improving the company’s financial performance. You could argue that corporate social responsibility and business objectives are diametrically opposed, that CSR conflicts with the fiduciary duty and CEO role by intentionally introducing costs into the business and reducing profits. Alongside the inherent costs of reporting, CSR can increase costs by requiring ethical supply chains, potentially putting companies that practice it at a commercial disadvantage. There is, then, an argument that CSR creates a conflict of interest between commercial and altruistic imperatives.

4) Limitations of CSR

As we mentioned above, CSR has limitations; its broad definition can make it difficult to put boundaries around what falls under the CSR remit. As a result, it can be hard to create a clear plan to tackle CSR: where do you focus? This can also make CSR achievements difficult to quantify. These limitations may, for some organizations, provide an excuse to avoid CSR altogether; it falls into the “too difficult” or “too vague” pile and is overlooked in favor of more tangible strategies. While it’s clear, then, that for boards, the benefits of pursuing a strategy of social responsibility and corporate citizenship are self-evident, there are considerations that need to be born in mind as well.

Corporate Social Responsibility Best Practices

For any organization aiming for good corporate social responsibility (CSR) practices, there are some recognized best practices to follow. Corporate social responsibility practices might vary from business to business, but some best practices should be universal.

Identify Your Corporate Values and Purpose

There are currently few regulatory imperatives specifically related to CSR. As a result, organizations are fairly free to decide on their own path and priorities based on their own views on the merits of corporate social responsibility. A first step might be to set some priorities, ensuring that these are in line with the things that matter to your key stakeholders — investors, customers, employees and anyone impacted by your business operations. In some cases, priorities might be obvious; if your company is a historic polluter, objectives relating to greener performance seem sensible. For other businesses, there isn’t such a direct link between CSR issues and their operations; these organizations have a freer rein when it comes to choosing issues or causes to align with.

Allocate Corporate Social Responsibility Roles and Responsibilities

It’s important to make people answerable for your CSR strategy; this will create accountability and focus attention on your aims. It’s important to make people answerable for your CSR strategy; this will create accountability and focus attention on your aims.

Depending on your organization’s size, this might be a dedicated CSR team, or it might simply mean giving key members of your leadership team-specific CSR responsibilities. It’s essential that your board and senior executives have an overview of corporate social responsibility within the business, but equally vital that responsibility should disseminate throughout the organization. Employees at all levels should have ownership of your approach to CSR and know that they play a key part. Creating a group of “champions” who can drive the CSR message throughout the organization can help here – but ultimately, the buck should stop with specific individuals who are given responsibility for achieving your goals.

Take a Business-Wide Approach

Ad-hoc or unfocused activity, while well-intentioned, won’t cut it when it comes to your corporate approach to social responsibility. One of the merits of corporate social responsibility is exactly that; that it's corporate. You should focus on harnessing the scale of your organization to create an approach that delivers more than a series of disconnected initiatives.

Communicate Internally and Externally

Shouting about your approach is essential for CSR — both to engender internal buy-in and achieve the reputational benefits of tackling your social obligations. Communicate openly and honestly about your aims and, importantly, any room for improvement. Equally important: celebrate your successes — don’t be afraid to share any achievements. And be generous with your learnings; CSR, by its very nature, should be for the greater good. If you can join any sector or cross-industry CSR groups to share approaches taken and lessons learned, do.

Benchmark Your Performance

It’s important to measure and compare your performance on CSR both internally between departments and externally with other organizations. There are some external ratings — third-party ”risk scores,” particularly for the ESG elements of CSR — which investors use to assess a company’s initiatives. You will also want to put in place your own monitoring, something that can be a challenge if your CSR data isn’t on point.

Corporate Social Responsibility Plan/Strategy

We touched in the previous section on the need for strategic corporate social responsibility and  an organized, orderly approach  rather than one comprised of disparate initiatives. What should make up this corporate social responsibility plan? CSR plans should encompass all the best practice steps outlined above, adapting them as needed to fit your organization’s circumstances. Defining your values and purpose; creating a plan that fits with your business’s core competencies; identifying the issues of importance to your stakeholders; communicating your aims and progress, and measuring and reporting on the impact of your efforts — your plan will need to include all these elements. Pursuing a strategy of social responsibility and good corporate practice needs to deliver evidence in terms of its ROI. The issue of reporting on your CSR progress deserves more exploration, so we look at that in more detail in the next section.

What is a corporate social responsibility report? It’s a formal report that evaluates the impact of your company's operations on the external community and environment. The format of your corporate social responsibility reporting may vary depending on whether it’s being produced for internal use or external scrutiny. CSR reporting might include an assessment of your organization’s economic, environmental, and/or social impacts, depending on the company’s area of operations and areas of CSR focus. Any corporate social responsibility audit you carry out will provide data on your performance against your stated objectives. The reporting is valuable internally in enabling you to measure the effectiveness of your CSR strategy and identify future priorities, and externally, in presenting your CSR credentials, aims and achievements to the world. Increasingly, some elements of CSR reporting are mandated by regulation, as with the TCFD reporting requirements we detailed earlier. We are likely to see CSR and ESG reporting becoming more of a regulatory imperative and less of a “nice to have” over time.

Corporate Social Responsibility Policies

Your corporate social responsibility policy is where you set your stall out. Examples of corporate social responsibility policies will differ between organizations, but as a general rule of thumb, your CSR policy should include: Your purpose: your CSR objectives and values. The scope of your CSR strategy — what does it encompass? The elements of your approach and the way you plan to tackle them. This might include a description of the social or environmental issue you are focusing on and the steps you will take. You may want to differentiate your regulatory obligations and any measures you choose to take proactively.

Corporate Social Responsibility Regulations and Compliance

Although it’s sometimes believed that the concept of corporate social responsibility is imposed on corporations by law, generally, this isn’t the case. Instead, it’s external pressures and the organization’s own ethical standards that set expectations around CSR. Legislation and expectations around corporate social responsibility vary by jurisdiction. Still, there is a consensus that it should be self-policed, an approach proactively led by organizations themselves, rather than something prescribed by regulation. Corporate social responsibility compliance, therefore, is something self-imposed rather than externally mandated. Investopedia describes CSR as “a self-regulating business model.” Similarly, the European Commission agrees that “it should be company led,” arguing that “EU citizens rightly expect that companies understand their positive and negative impacts on society and the environment. And, therefore, prevent, manage and mitigate any negative impact that they may cause.” This expectation isn’t confined to Europe; Forbes , describing CSR in the US, says that while CSR ‘”is a form of soft law” and “not required by US statute or regulations,” it is nonetheless “seen as obligatory by most corporations because of consumer expectations and internal norms.” The Task Force on Climate-Related Financial Disclosures encourages climate-focused reporting in companies’ financial filings, and in the UK, the financial regulator the FCA now requires that companies with premium listings on the London Stock Exchange include a statement in their annual financial report setting out whether their disclosures are consistent with TCFD recommendations and adding an explanation if they are not.

CSR Theories and Models

Many different theories underlie the development and concept of corporate social responsibility.

Milton Friedman

In 1970, American economist Milton Friedman published an essay, The Social Responsibility of Business Is To Increase Its Profits , in the New York Times. In it, Friedman set out his belief that profit must be a priority and a precursor to any social responsibility, stating that: “There is one and only one social responsibility of business — to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud." Friedman’s belief, also known as the shareholder theory of corporate social responsibility, underpins many theories around corporate social responsibility.

Carroll and the Corporate Social Responsibility Pyramid

In 1979, Archie Carroll devised a four-part model of CSR: the pyramid of corporate social responsibility. The four components of the pyramid of corporate social responsibility are economic responsibility, legal responsibility, ethical responsibility and philanthropic responsibility. True CSR, Carroll posits, requires satisfying all four parts consecutively, stating that “CSR encompasses the economic, legal, ethical and philanthropic expectations placed on organizations by society at a given point in time.” Carroll believes that profit must come first; the base of the corporate social responsibility pyramid is concerned with economic success. Then comes the need to comply with relevant laws and regulations. The fourth layer of the pyramid is the need for an organization to meet its ethical duties. Then, after these three requirements are satisfied, a business can consider philanthropy.

Gray, Owens and Adams

In 1996, Carol Adams, Rob Gray and Dave Owen published Accounting & Accountability: Changes and Challenges in Corporate Social and Environmental Reporting. They present CSR approaches on a continuum, with “pristine capitalists” at one end and “deep ecologists” at the other, and all points in between representing the position of different stakeholders within an organization.

Benedict Sheehy

More recently, Sheehy, an associate professor at the University of Canberra, has become recognized as an expert on CSR, publishing research into the use of the law to “achieve long term environmental and social sustainability.” When determining their organization’s approach to CSR, boards may want to consider any or all of these theories to arrive at a CSR strategy that fulfills their corporate obligations as well as their social responsibilities.

Limitations in CSR Approaches

When boards consider how to tackle corporate social responsibility, there’s clearly much to think about. Among decisions on priorities and approaches, it’s important to consider both the importance of corporate social responsibility and its limits. We touched above on some of CSR’s limitations — particularly, the challenges of defining corporate social responsibility and finding tangible ways to measure any CSR strategy's success. The fact that social responsibility should be tailored to each business’s own activity and priorities is not only one of its strengths but can also be its weakness, making definitions and comparisons difficult. Today’s boards really need to consider ESG — which includes CSR within its auspices — rather than CSR alone. By tackling CSR within an ESG framework, it can be easier to set strategies, pinpoint specific actions, and prescribe success measures. But delivering on your ESG goals is not without its challenges. Data is the foundation on which your ESG approach is built , informing your objectives, providing the baseline for your achievements and enabling you to operationalize your ESG commitments. Many businesses, though, struggle to capture this data, leaving them in the dark when it comes to setting goals, monitoring progress and quantifying the impact of their initiatives. As a result, they are unable to capitalize on their ESG strategies’ ability to drive long-term growth and profitability. Diligent’s  ESG Solutions  are designed to help board members and executives establish clear ESG goals and operationalize them throughout the organization to ensure that every commitment leads to a measurable and enduring outcome. Take the next ESG step by creating a robust action plan to achieve and measure your goals.

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What is Corporate Social Responsibility (CSR)?

Categories of csr, business benefits of csr, example of csr in canada, csr of starbucks, related readings, corporate social responsibility (csr).

Corporate governance strategies employed by firms that are ethical, societally friendly, and beneficial to its community

Corporate social responsibility (CSR) refers to strategies that companies put into action as part of corporate governance that are designed to ensure the company’s operations are ethical and beneficial for society.

Corporate Social Responsibility (CSR) - Image of company employees picking trash together

Although corporate social responsibility is a very broad concept that is understood and implemented differently by each firm, the underlying idea of CSR is to operate in an economically, socially, and environmentally sustainable manner.

Generally, corporate social responsibility initiatives are categorized as follows:

1. Environmental responsibility

Environmental responsibility initiatives aim to reduce pollution and greenhouse gas emissions and the sustainable use of natural resources.

2. Human rights responsibility

Human rights responsibility initiatives involve providing fair labor practices (e.g., equal pay for equal work) and fair trade practices, and disavowing child labor.

3. Philanthropic responsibility

Philanthropic responsibility can include things such as funding educational programs, supporting health initiatives, donating to causes, and supporting community beautification projects.

4. Economic responsibility

Economic responsibility initiatives involve improving the firm’s business operation while participating in sustainable practices – for example, using a new manufacturing process to minimize wastage.

In a way, corporate social responsibility can be seen as a public relations effort. However, it goes beyond that, as corporate social responsibility can also boost a firm’s competitiveness. The business benefits of corporate social responsibility include the following:

1. Stronger brand image, recognition, and reputation

CSR adds value to firms by establishing and maintaining a good corporate reputation and/or brand equity .

2. Increased customer loyalty and sales

Customers of a firm that practices CSR feel that they are helping the firm support good causes.

3. Operational cost savings

Investing in operational efficiencies results in operational cost savings as well as reduced environmental impact.

4. Retaining key and talented employees

Employees often stay longer and are more committed to their firm knowing that they are working for a business that practices CSR.

5. Easier access to funding

Many investors are more willing to support a business that practices CSR.

6. Reduced regulatory burden

Strong relationships with regulatory bodies can help to reduce a firm’s regulatory burden.

In Canada, mining companies often engage with Aboriginal communities and groups. Converting land sites into mines can cause a significant environmental impact on the Aboriginal communities living near the sites. Several Canadian mining companies engage in corporate social responsibility with local communities to ensure that the adverse effects are minimized.

For example:

Cameco Corporation oversees education programs directed toward northern and Aboriginal peoples through their northern Saskatchewan five-pillar strategy.
Goldcorp Inc. strives to make a positive impact on its communities by supporting education and health initiatives and sponsorship of special events.
Softrock Minerals Ltd. contributes money for festivals, schools, and projects.

Starbucks is a well-known firm that practices corporate social responsibility. As indicated by the company: “Starbucks’ social corporate responsibility and sustainability is about being responsible and doing things that are good for the planet and each other.”

Starbucks’ CSR initiatives include:

Starbucks Youth Action Grants: Awarding grants to inspire and support youth action
Ethos Water Fund: Raising clean water awareness and providing children with access to clean water
Ethical Sourcing: Commitment to buying and serving ethically traded coffee
Green Building: Using the U.S. Green Building Council’s LEED certification program to create energy and water-efficient store designs

This has been CFI’s guide to return on Corporate Social Responsibility. To keep learning and advancing your career, the following CFI resources will be helpful:

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Corporate Social Responsibility Plan Template

What is a Corporate Social Responsibility Plan?

A Corporate Social Responsibility (CSR) plan is an actionable strategy that outlines how a business plans to meet its obligations to its stakeholders and the public. It includes goals, objectives, and initiatives that are meant to address social issues and the environment, while also creating business value. This plan can help a business to plan and manage its initiatives, investments, and resources to ensure that it delivers on its commitments.

What's included in this Corporate Social Responsibility Plan template?

3 focus areas
6 objectives

Each focus area has its own objectives, projects, and KPIs to ensure that the strategy is comprehensive and effective.

Who is the Corporate Social Responsibility Plan template for?

The Corporate Social Responsibility Plan template is designed to help organizations of all sizes, from startups to large corporations, create a plan to manage their corporate social responsibility strategies. This template provides an easy-to-follow framework to help guide the development of an effective and comprehensive CSR plan that can guide a business in making positive contributions to society and the environment.

1. Define clear examples of your focus areas

The first step in creating a CSR plan is to define the focus areas that the plan will address. These focus areas should be based on the organization's core mission and values, and should reflect the areas in which the organization has the most impact. Examples of focus areas could include sustainable energy, sustainable water, human resources, and community engagement.

2. Think about the objectives that could fall under that focus area

Once focus areas have been identified, it is important to consider the objectives that could fall within each focus area. Objectives should be specific, measurable, achievable, and relevant, and they should be aligned with the organization's core mission and values. Examples of objectives could include reducing energy consumption, increasing reliance on renewable energy sources, reducing water consumption, and increasing employee engagement.

3. Set measurable targets (KPIs) to tackle the objective

Once objectives have been identified, it is important to set measurable targets, or Key Performance Indicators (KPIs), to track progress towards each objective. KPIs should include an initial value, a target value, and a unit of measurement. Examples of KPIs could include a 10% decrease in energy consumption, a 25% increase in renewable energy consumption, a 20% decrease in water consumption, and a 25% increase in employee engagement.

4. Implement related projects to achieve the KPIs

Once KPIs have been set, it is important to implement related projects to achieve the desired outcomes. Projects should be designed to address the objectives and KPIs, and should be monitored and evaluated to ensure that they are having the desired effect. Examples of projects could include upgrading to energy efficient lighting, implementing solar panels, installing water-efficient fixtures, and offering comprehensive benefits packages.

5. Utilize Cascade Strategy Execution Platform to see faster results from your strategy

The Cascade Strategy Execution Platform is the ultimate tool for managing corporate social responsibility strategies. It provides an easy-to-use framework for creating, managing, and evaluating CSR initiatives, while providing insights into the performance of the strategy. With Cascade, organizations can quickly and easily create a comprehensive CSR plan and track progress towards their objectives, ensuring that they are meeting their commitments to their stakeholders and the public.

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What Is the Difference Between ESG and Social Responsibility?

The bottom line.

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Why Social Responsibility Matters to Businesses

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Companies are increasingly ramping up their focus on social responsibility , whether they are championing women’s rights, protecting the environment, or attempting to obliterate poverty, on local, national, or global levels. From an optics perspective, socially responsible companies project more attractive images to both consumers and shareholders alike, which serves to positively affect their bottom lines.

Key Takeaways

Social responsibility empowers employees to leverage the corporate resources at their disposal to do good.
Being a socially responsible company can bolster a company's image and build its brand.
Social responsibility programs can boost employee morale in the workplace and lead to greater productivity, which has an impact on how profitable the company can be.
Businesses that implement social responsibility initiatives can increase customer retention and loyalty.
Socially responsible companies have the opportunity to stand out from the competition because they cultivate superior and positive brand recognition.

Embracing socially responsible policies goes a long way toward attracting and retaining customers, which is essential to a company’s long-term success. Furthermore, many individuals who know that part of a company's profits will be channeled toward social causes near and dear to them will gladly pay a premium for goods.

Companies can likewise witness increased foot traffic if they're committed to supporting the local community. For example, banks that dispense loans to low-income households are apt to see an uptick in business as a direct result.

Social responsibility is an effective tool to increase employee engagement. These companies tend to attract employees who are eager to make a difference in the world—in addition to simply collecting a paycheck. With large companies, there is strength in numbers, and collective employee efforts can achieve substantial results, which increases workplace morale and boosts productivity.

According to Harvard Business School, nearly 70% of employees say they would not work for a company without a strong purpose. Ninety percent of employees who work at companies with a strong sense of purpose say they’re more inspired, motivated, and loyal, and 92% of employees who work at a socially responsible company say they would be more likely to recommend their employer to those in their network who are looking for a job.

Research shows that employee engagement translates directly to a company's overall performance and bottom line: engaged employees have a 17% increase in productivity, are 21% more profitable, and can have 41% lower absenteeism .

To sum it all up, even a small investment in corporate social responsibility initiatives can increase employee engagement and have an impact on how profitable the company can be.

Community Support and Customer Loyalty

Social responsibility works as a platform for companies and consumers alike to make a positive impact on local and global communities. Businesses that implement a social responsibility initiative that’s in line with their values have the opportunity to increase customer retention and loyalty.

Research shows that 87% of American consumers are more likely to buy a product from a company that advocates for an issue they care about, and 76% would refuse to purchase a product if they found out a company supported an issue contrary to their beliefs.

Community-oriented companies often enjoy a leg up on their competition as well, thanks to superior brand imaging. For example, Tesla Inc. ( TSLA ) CEO Elon Musk has successfully attracted environmentally-minded consumers with his line of cutting-edge electric cars and green automotive products.

104,975,528

Lives impacted globally by the socially responsible initiatives and community support enacted by TOMS, the popular shoe brand, in the 15 years since its inception.

Examples of Corporate Social Responsibility

Coca-cola company (ko).

In 2010, Coca-Cola started the 5by20 initiative to empower women across the globe. The company stated:

Through 5by20 programs around the world, we equip women entrepreneurs to overcome social and economic barriers by providing business skills training, access to financial services, and assets, and connections with peers and mentors. The women participating in 5by20 work in roles across our value chain include retailers, suppliers, producers, artisans, and more.

Visa Inc. (V)

Through its financial inclusion program, Visa has developed innovative ways of bringing digital cash to places in the world where the financial infrastructure doesn't exist or for people who don't have access to the financial system, like residents of many developing countries. The company stated:

Today, about half the adult world lives in the informal economy, dealing exclusively in cash. To be one of these estimated 2 billion people is to face financial barriers that make life risky, expensive, and inefficient. Financial inclusion helps put people on a path out of poverty, creates productive, empowered citizens, fosters business opportunities, and fuels economic growth.

Both terms refer to the social responsibilities of businesses. Though corporate social responsibility (CSR) holds businesses accountable for their social commitments in a qualitative manner, environmental, social, and governance (ESG) helps measure or quantify such social efforts. Socially conscious investors use ESG criteria to screen potential investments .

How Can a Company Be More Socially Responsible?

Even the smallest initiative can have an impact on a community. Donating money or resources to charities can make a huge difference, although small companies and startups may not have the ability to do so. Companies can start by organizing small fundraising events, encouraging volunteering, establishing a social mission and clear goals, implementing education programs for employees, or joining efforts with businesses with a similar mentality.

What Are the Benefits of Corporate Social Responsibility?

Embracing CSR increases customer retention and loyalty, increases employee engagement, improves brand imaging, attracts investment opportunities and top talent, and makes a difference in bottom-line financials. The non-profit Sustainability Accounting Standards Board (SASB) and the Global Reporting Initiative (GRI) exist to help investors analyze company bottom-line data.

Socially responsible companies cultivate positive brand recognition, increase customer loyalty, and attract top-tier employees. These elements are among the keys to achieving increased profitability and long-term financial success.

Harvard Business School. " 15 Eye-Opening Corporate Social Responsibility Statistics ."

Gallup. " State of the Global Workplace ."

Cone. " AMERICANS WILLING TO BUY OR BOYCOTT COMPANIES BASED ON CORPORATE VALUES, ACCORDING TO NEW RESEARCH BY CONE COMMUNICATIONS ."

Tesla. " Elon Musk ."

TOMS. " Toms Impact Report 2021 ."

The Coca-Cola Company. " 5by20: What We're Doing ."

Coca-Cola. " How Coca-Cola Empowers Women Entrepreneurs ."

Visa. " Financial Inclusion ."

Forbes. " Three Reasons Why CSR And ESG Matter To Businesses ."

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Making the most of corporate social responsibility

Too often, executives have viewed corporate social responsibility (CSR) as just another source of pressure or passing fad. But as customers, employees, and suppliers—and, indeed, society more broadly—place increasing importance on CSR, some leaders have started to look at it as a creative opportunity to fundamentally strengthen their businesses while contributing to society at the same time. They view CSR as central to their overall strategies, helping them to creatively address key business issues.

The big challenge for executives is how to develop an approach that can truly deliver on these lofty ambitions—and, as of yet, few have found the way. However, some innovative companies have managed to overcome this hurdle, with smart partnering emerging as one way to create value for both the business and society simultaneously. Smart partnering focuses on key areas of impact between business and society and develops creative solutions that draw on the complementary capabilities of both to address major challenges that affect each partner. In this article, we build on lessons from smart partnering to provide a practical way forward for leaders to assess the true opportunities of CSR.

Mapping the CSR space

There is no single accepted definition of CSR, which leads to plenty of confusion about what constitutes a CSR activity. We can begin to develop a working definition of CSR by thinking about its dual objectives—benefiting business and society—and the range of potential benefits in each case (Exhibit 1).

Corporate social responsibility: The landscape

Many businesses pursue CSR activities that can best be termed pet projects, as they reflect the personal interests of individual senior executives. While these activities may be presented with much noise and fanfare, they usually offer minimal benefits to either business or society. In the middle are efforts that can make both sides feel good but that generate limited and often one-sided benefits. With philanthropy, for example, corporate donations confer the majority of benefits on society (with potential but often questionable reputational benefits to the business). Similarly, in what’s best referred to as propaganda, CSR activities are focused primarily on building a company’s reputation with little real benefit to society. Some cynics suggest that this form of CSR is at best a form of advertising—and potentially dangerous if it exposes a gap between the company’s words and actions.

None of these approaches realize the opportunities for significant shared value creation that have been achieved through smart partnering. In such ventures, the focus of the business moves beyond avoiding risks or enhancing reputation and toward improving its core value creation ability by addressing major strategic issues or challenges. For society, the focus shifts from maintaining minimum standards or seeking funding to improving employment, the overall quality of life, and living standards. The key is for each party to tap into the resources and expertise of the other, finding creative solutions to critical social and businesses challenges.

Addressing rural distribution challenges in India

More than 70 percent of India’s population resides in rural villages scattered over large geographic areas with very low per capita consumption rates. For multinationals, the cost of reaching and serving these rural markets is significant, as typical urban distribution approaches do not work. Hindustan Unilever Limited’s Project Shakti overcame these challenges by actively understanding critical societal and organizational needs. HUL partnered with three self-help groups, whose members were appointed as Shakti entrepreneurs in chosen villages. These entrepreneurs were women, since a key aim for the partnership was to help the rural female population develop independence and self-esteem. The entrepreneurs received extensive training and borrowed money from their self-help groups to purchase HUL products, which they then sold in their villages. By 2008, Shakti provided employment for 42,000 women entrepreneurs covering nearly 130,000 villages and 3 million households every month. In the same year, HUL sales through the project approached $100 million. Dalip Sehgal, then executive director of New Ventures at HUL, noted: “Shakti is a quintessential win-win initiative and overcame challenges on a number of fronts. It is a sales and distribution initiative that delivers growth, a communication initiative that builds brands, a micro-enterprise initiative that creates livelihoods, a social initiative that improves the standard of life, and catalyzes affluence in rural India. What makes Shakti uniquely scalable and sustainable is the fact that it contributes not only to HUL but also to the community it is a part of.” 1 1. V. Kasturi Rangan and Rohithari Rajan, “Unilever in India: Hindustan Lever’s Project Shakti,” Harvard Business School case 9-505-056, June 27, 2007.

So how does this work? The examples in the two accompanying sidebars (see “Addressing rural distribution challenges in India” and “Ensuring sustainable supplies of critical raw materials”) illustrate smart partnering initiatives at Unilever. Both address long-term strategic challenges facing the company and help to build creative partnerships that accrue significant benefits to both sides.

Initial questions for any leader should be, “Where have you focused CSR activities in the past?” and, more important, “Where should you focus them for the future?” All organizations have to balance limited resources and effort, so the challenge is how best to deploy yours to maximize the benefits to your business (and your shareholders and stakeholders), as well as to society. Start by mapping your current portfolio of CSR initiatives on the framework shown in Exhibit 1 and ask: What are the objectives of our current initiatives? What benefits are being created, and who realizes these? Which of these initiatives helps us to address our key strategic challenges and opportunities?

Ensuring sustainable supplies of critical raw materials

Unilever’s Lipton unit is the world’s largest buyer of tea. In 1999, Unilever Tea Kenya started a pilot program in Kericho, in southwestern Kenya, to apply company sustainability principles to the production of tea. The initiative focused on improving productivity, sustainability, and environmental management, as well as energy and habitat conservation. For Unilever, growing pressure on natural resources means that securing high-quality supplies of critical raw materials in the long term is of paramount strategic importance.

The Kericho initiative had a direct impact on the company’s ability to control the supply of tea not just today but also into the future, while simultaneously enhancing Unilever’s corporate reputation with both consumers and employees. Company leadership felt that higher short-term costs were far outweighed by the long-term strategic edge Unilever gained for its raw-materials supplies and brands. In 2008, as a signal of its commitment, Unilever expanded the scope of its sustainable-agriculture program, pursuing certification from the Rainforest Alliance for all Lipton tea farms by 2015.

For society, the initiative increased farmer revenue through a 10 to 15 percent premium paid above market prices. Additionally, it focused on topics of significant concern for governments and farmers alike, including improving farmer skills, environmental protection, and sustainable production methods (such as developing a self-sufficient ecosystem), as well as enhancing local associated jobs. All these factors contributed to strengthened rural income, skills, and living standards.

Focusing CSR choices: Guiding principles

Companies are likely to have activities scattered across the map, but that’s not where they have to stay—nor is it how the benefits of CSR are maximized. Many companies start with pet projects, philanthropy, or propaganda because these activities are quick and easy to decide on and implement. The question is how to move toward CSR strategies that focus on truly cocreating value for the business and society. The accompanying examples suggest three principles for moving toward this goal.

Concentrate your CSR efforts. Management time and resources are limited, so the greatest opportunities will come from areas where the business significantly interacts with—and thus can have the greatest impact on—society. These are areas where the business not only can gain a deeper understanding of the mutual dependencies but also in which the highest potential for mutual benefit exists.
Build a deep understanding of the benefits. Even after selecting your chosen areas of opportunity, finding the potential for mutual value creation is not always straightforward. The key is finding symmetry between the two sides and being open enough to understand issues both from a business and a societal perspective.
Find the right partners. These will be those that benefit from your core business activities and capabilities—and that you can benefit from in turn. Partnering is difficult, but when both sides see win–win potential there is greater motivation to realize the substantial benefits. Relationships—particularly long-term ones that are built on a realistic understanding of the true strengths on both sides—have a greater opportunity of being successful and sustainable.

Applying these principles to choosing the appropriate CSR opportunities prompts additional questions—namely: What are the one or two critical areas in our business where we interface with and have an impact on society and where significant opportunities exist for both sides if we can creatively adjust the relationship? What are the core long-term needs for us and for society that can be addressed as a result? What resources or capabilities do we need, and what do we have to offer in realizing the opportunities?

Building the business case

In smart partnering, mutual benefit is not only a reasonable objective, it is also required to ensure long-term success. But this commitment must be grounded in value-creation potential, just like any other strategic initiative. Each is an investment that should be evaluated with the same rigor in prioritization, planning, resourcing, and monitoring.

Now you need to define the array of potential benefits for both the business and for society. This will not always be easy, but a clear business case and story is important if you are to get the company, its shareholders, and its stakeholders on board.

You can assess the benefits across the following three dimensions:

Time frame. Be clear on both the short-term immediate objectives and the long-term benefits. In smart partnering, the time frame is important, as initiatives can be complex and take time to realize their full potential.
Nature of benefits. Some benefits will be tangible, such as revenue from gaining access to a new market. Others will be equally significant, but intangible, such as developing a new capability or enhancing employee morale.
Benefit split. Be clear about how benefits are to be shared between the business and society. If they are one-sided, be careful you are not moving into the philanthropy or propaganda arena. Remember that if the aim is to create more value from partnering than you could do apart, then benefits must be shared appropriately.

Exhibit 2 outlines two contrasting benefit arrays for the Unilever examples discussed in the accompanying sidebars. With Project Shakti, the short-term tangible benefits are extremely clear and powerful, while in the case of Kericho the long-term intangible benefits are strategically critical for both the business and the communities in which it operates. Remember that it is not essential to have benefits in every section of the matrix. However, if you are struggling with any of the dimensions—for example, there are no long-term or tangible benefits or if most of the benefits are one-sided—go back and ask if this is a real partnering opportunity where significant mutual value creation is possible.

Plotting the benefits

As you develop a clear array of benefits, a business case, and a story to communicate to all stakeholders, ask: Do we have a clear understanding of the entire array of benefits and the associated business case, on which we can focus, assess, and manage the potential CSR activity? Does the activity focus on fundamental value creation opportunities where we can really partner with society to realize simultaneous benefits? Are the opportunities significant, scalable, and supportive of our overall strategic priorities?

Implementing CSR with consistency and determination

Partnering, as we all know, can be challenging. It requires planning and hard work to assess potential mutual benefits, establish trust, and build and manage the activities, internally as well as externally. But is it worth it? Companies at the forefront of such partnering suggest the answer is a resounding yes, but an additional two principles need to be followed to ensure success:

Go in with a long-term commitment. Having a positive impact on societal issues such as living standards is not a “quick fix” project. Leaders who want to partner therefore need to have a long-term mind-set backed up by solid promises and measurable commitments and actions. Your initiative must demonstrate added value to both shareholders and stakeholders over time.

Engage the entire workforce and lead by example. Your workforce can be one of your greatest assets and beneficiaries when it comes to CSR activities. Increasingly, employees are choosing to work for organizations whose values resonate with their own. Attracting and retaining talent will be a growing challenge in the future, so activities that build on core values and inspire employees are key. Unilever, along with other leaders in smart partnering, actively engages its employees in such initiatives, seeing improved motivation, loyalty, and ability to attract and retain talent as a result. Engaging the workforce starts at the top. Leaders must be prepared to make a personal commitment if the activities are to realize their full potential.

This is the tough bit of the process: taking action, rather than speaking about it, and keeping up the momentum even when targets are far in the future. As you plan the implementation of your chosen initiatives and follow through, ask: Can we build the commitment we need across the organization to make this happen—and are we as leaders willing to lead by example? Have we planned effectively to ensure that implementation is successful, with resources, milestones, measurement, and accountability? How can we manage the initiative, focusing on the total array of benefits sought, not just the short-term financials?

What’s a leader to do?

When it comes to CSR, there are no easy answers on what to do or how to do it. A company’s interactions and interdependencies with society are many and complex. However, it is clear that approaching CSR as a feel-good or quick-fix exercise runs the risk of missing huge opportunities for both the business and society. Taking a step-by-step approach and following the principles outlined here offers leaders a way to identify and drive mutual value creation. But it will demand a shift in mind-set: the smart partnering view is that CSR is about doing good business and creatively addressing significant issues that face business and society, not simply feeling good. And smart partnering is not for the faint of heart. It requires greater focus, work, and long-term commitment than do many standard CSR pet projects, philanthropic activities, and propaganda campaigns, but the rewards are potentially much greater for both sides.

Continuing the conversation—Authors’ response to reader comments

In January 2010, the authors reviewed our readers’ comments on their original article and weighed in on the conversation with new insights and suggestions.

Many thanks to those who read and considered the ideas in our article “Making the most of corporate social responsibility”—and particularly to those who shared their thoughts and experiences on smart partnering. As many rightly pointed out, there has been a groundswell of interest in CSR, as well as a growing number of powerful examples of smart partnering. This momentum reflects an improved understanding of the potential benefits to companies and the increasing maturity of social organizations. Both see the potential for mutually creating value.

Our aim was to advance the debate on how to make CSR an integral part of core strategic thinking rather than a feel-good add-on to it. Where should we take this conversation? Many of the responses came from academics or from executives responsible for CSR activities in their firms. While this is natural, it raises the question of how best to engage (or help these executives to engage) senior business leaders who make strategic choices and set the direction of companies—particularly the next generation of leaders, who face more pressing global and societal issues than ever before.

Three challenges

Our work, that of others in this field, and the input of McKinsey Quarterly readers suggest that there are three basic challenges to making smart partnering a strategic imperative and opportunity for companies. They also suggest ways to overcome those challenges.

1. Get CSR on the strategy table

For CSR to achieve its potential, it must focus on key areas of interaction between a firm and its environment and address value creation activities at the center of the strategic agenda. The challenge is to get innovative CSR thinking on the table when business strategies are being explored and decided. How can we make CSR approaches an integral part of the strategic toolbox for business unit leaders?

First, the potential benefits of CSR, notably smart partnering, need to be demonstrated in practice if mainstream senior business leaders are to recognize the significant opportunities it offers. That is why sharing your and our examples is so important. Next, key CSR executives must be part of core strategy processes. Ultimately, CSR must cease to be a separate function and become part of the skill set of all business leaders as an innovative way to solve critical problems.

2. Stretch your strategic ambition for CSR

Several readers spoke of favorably received CSR activities within their organizations in the realms of philanthropy and partnering. As we suggested, the starting point in any CSR strategy should be to outline the CSR activities a company already undertakes and to be clear on their intent and fit within the overall portfolio. Where CSR activities are primarily philanthropic in nature, they can create a strong base for building a company’s reputation and engaging employees. Philanthropy also has other obvious advantages: it is relatively easy to undertake, can often be set off against tax, and requires less effort and commitment across the organization.

The questions with this approach are: What benefits are being left on the table, both for society and the business? What opportunities are being missed? The challenge is to stretch strategic ambitions for CSR and to move actively toward smart partnering, where the biggest opportunities are to be found. Stretching means going beyond common practice. While it is extremely encouraging to see a growing recognition of the benefits of CSR for building employee engagement, this is only the tip of the iceberg. In the examples we described, the benefits matrices set out much broader ambitions and arrays of benefits (short and long term, tangible and intangible) for both society and core business strategies. How can you stretch your company’s ambitions in a similar way? Whom do you need to involve, particularly among mainstream business leaders, to gain new perspectives and challenge conventional wisdom?

3. Reinforce your core values, internally and externally

When corporate visions and strategies are described, there is often a reference to core values, which shape individual behavior and expectations about how we work and interact together. But we often limit discussions about values to internal behavior and actions. As several readers noted, shouldn’t senior executives also be held accountable for how companies live core values in their interactions with all stakeholders?

Businesses have an impact on societies, and vice versa, so there is a need to recognize the mutual responsibilities that this entails. Within societies, trust in businesses is low, public scrutiny of firms is constant, customer choice criteria include the reputations and values of suppliers, and the next generation of leaders will choose employers whose values match their own. For businesses, one potential challenge is whether the way they operate externally—not just internally—will ultimately have an impact on their “license to operate.” Many companies that approach CSR strategically recognize this symbiosis and build on strong values, living them internally and externally.

Clearly, we do not advocate smart-partnering initiatives solely because they reinforce a company’s core values; this is heading into the realm of propaganda. But as you consider the benefits of a potential initiative, do explicitly consider its impact on your corporate values. If you cannot see a direct link to them, think about how you could create one—for example, reinforcing values through employee involvement or building additional external relationships based on the initiative.

Moving forward

What’s your next step? First, engage with key senior business leaders to identify two or three critical interactions with society. Then for each, map out what you have to offer in capabilities, knowledge, resources, relationships, and so on that would make a difference in addressing the challenges you have identified, both for your business and society. Consider what ideal partners could offer to complement the things you bring to these challenges. For the Unilever–Kericho example in our original article, a critical interaction with society involved raw materials (in particular, tea). Mapping the possible complementary strengths of a partnership could produce a kind of balance sheet.

Use the balance sheets you have developed as a starting point in identifying issues and discussing them with key internal stakeholders and potential external partners. In a world of burgeoning technology, we may even one day see some type of CSR “dating agency” where potential partners could share their balance sheets. As discussions progress, a balance sheet can also help you and your partners construct the benefits array and business case for your smart-partnering initiative.

In this sort of process, experienced CSR executives can really start to move CSR onto the strategic agenda by engaging executives on real business challenges. That means helping these executives to identify the opportunities, share concrete examples, think more broadly about solutions, and move forward.

Smart partnering is good business. Our readers’ experiences and ideas confirm that momentum is building toward a time when CSR will be absorbed into core strategy and business activities rather than treated as an orphan in need of a special label. With your help, this momentum will build. Share your experiences, shape your activity portfolios, develop your balance sheets and benefits matrices, and challenge the business community to keep changing mind-sets for the better.

Thomas Malnight is a professor of strategy and general management at the International Institute for Management Development (IMD), in Lausanne, Switzerland, where Tracey Keys is a program manager. Kees van der Graaf is Executive-in-Residence at IMD, following his retirement from the board of Unilever, where he was also president of the European business.

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What Is a CSR Report & Why Is It Important?

corporate social responsibility report on desk

20 Apr 2021

Over the past decade, corporate social responsibility reports—also called CSR reports, impact reports, or sustainability reports—have become more common, a trend that’s predicted to continue . In fact, 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.

So, what is a CSR report? What do quality CSR reports look like, and why do they matter for businesses and society? Here are the answers to these questions and ways you can help craft a CSR report for your organization.

What Is a CSR Report?

According to the online course Sustainable Business Strategy , corporate social responsibility is the idea that a business has a responsibility to the society and environment in which it operates. Many businesses striving to be socially responsible use the triple bottom line —an organization’s impact on people and the planet, in addition to its profits—to determine strategic priorities.

A corporate social responsibility (CSR) report is an internal- and external-facing document companies use to communicate CSR efforts and their impact on the environment and community. An organization’s CRS efforts can fall into four categories : environmental, ethical, philanthropic, and economic.

In some countries, it’s mandatory for corporations to publish CSR reports annually. Although not yet required of companies based in the United States, some predict it will be in the not-so-distant future.

Currently, there isn’t a common set of CSR reporting standards in the US. This provides organizations the freedom to report on CSR efforts in whatever format they choose and highlight whatever information they wish. The lack of standards can, however, make it difficult to compare reports across companies. It also enables firms to leave out areas where their efforts failed or harmed people or the environment.

CSR reports are typically presented in a digital format for easy distribution, but they can also be printed and presented to stakeholders in person. A CSR report’s layout can range from a straightforward text document to a designed, visually stimulating packet.

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Examples of CSR Reports

To help you envision what your organization’s CSR report could look like, here are several examples of recent CSR reports from well-known companies:

The Walt Disney Company’s 2019 Corporate Social Responsibility Update
Cisco’s 2020 Corporate Social Responsibility Impact Report
General Motors’ 2019 Sustainability Report
IBM’s 2019 Corporate Responsibility Report
Warby Parker’s 2018 Impact Report

Each example begins with a letter from a corporate executive, such as the president, chief executive officer, or chief sustainability officer, has a table of contents, and is visually appealing. These examples range from 42 pages to nearly 180 pages long—a testament to the flexibility of CSR reporting standards.

You may notice that the examples have different wording in the titles. Once again, because there’s no set structure for CSR reports, the framing is up to the individual company and what it would like to highlight.

Many companies create specific branding strategies for CSR efforts and reports. For instance, note Warby Parker’s clean, personal aesthetic throughout, or General Motors’ clever slogan on its report’s front page: “driving sustainable value.” As seen in Cisco’s report, using infographics is an effective way to visualize company data to highlight trends and changes made over time.

Each CSR report is different and highlights the company’s strong suits, goals, and plans. Dig into each example to see what aspects you may incorporate in your company’s report.

Related : 5 Examples of Corporate Social Responsibility That Were Successful

Why Are CSR Reports Important?

CSR reports are a way for an organization to communicate its mission, efforts, and outcomes to external and internal stakeholders. In addition to employees, decision-makers, and shareholders, these include customers, the local community, and society at large.

If a company has been bold and successful in its CSR efforts, the release of its CSR report is as much a communication tool as it is a marketing and public relations event. Especially because of the lack of mandatory guidelines, you can use these reports to highlight your organization’s achievements and build social responsibility into your brand’s identity.

Releasing a CSR report on an annual basis can also create accountability. For example, if your organization publishes its goal to be carbon neutral by 2025 in its 2021 CSR report, chances are employees will feel driven to accomplish that goal so its completion can be noted in the 2025 report. If a goal isn’t reached in its intended time frame, the CSR reporting process can prompt an examination of how the project went off track and what can be done to realign and accomplish the goal in a realistic timeframe.

Sustainable Business Strategy | Unite Profit and Purpose | Learn More

Improving Your Company’s CSR Efforts

CSR reports are an effective way to communicate your business’s efforts, goals, and plans to help the environment and community, along with the impact it’s had so far. If, however, your business hasn’t started its social responsibility efforts yet, it’s never too late.

In the online course Sustainable Business Strategy , Harvard Business School Professor Rebecca Henderson implores professionals to start with purpose and build the business case from there. What’s an issue that impacts your business, customers, or community? Start by identifying a cause that’s important to members of your organization, and then brainstorm a quantifiable goal you can set that would help that cause.

To make the business case to skeptical members of your team, consider the publicity value, customer and employee loyalty, and return on investment of committing to a sustainable or socially impactful cause.

If you or your colleagues are looking for a formal foundation in sustainable capitalism and how to be a socially responsible business, explore Sustainable Business Strategy to build the necessary skills to do well as a business while doing good in the world.

Once the ball is rolling, design a CSR report outlining your company’s efforts. Even if it’s just a few pages long, explaining your efforts, impact, and plans is worth the time. If you’re driven by purpose and a clear plan, others may read about it and support your business on its journey toward corporate social responsibility.

Are you interested in making an impact on your community and the planet? Explore our three-week online course Sustainable Business Strategy and other Business in Society courses to learn how to be a purpose-driven professional. If you aren't sure which course is the right fit, download our free course flowchart to determine which best aligns with your goals.

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Corporate social responsibility company policy

The Corporate Social Responsibility (CSR) Policy emphasizes a company’s commitment to ethical practices, environmental protection, and community support. It outlines efforts to give back, ensuring compliance with laws, promoting human rights, and proactively supporting community initiatives, environmental conservation, and educational programs.

This Corporate Social Responsibility company policy template is ready to be tailored to your company’s needs and should be considered a starting point for setting up your social responsibility employment policies.

The corporate social responsibility policy should include:

Clear definitions of compliance and proactiveness, emphasizing ethical business operations and community support.
Guidelines for protecting the environment, ensuring waste disposal best practices, and promoting eco-friendly technologies.
Commitments to human rights, including fair labor practices and non-discrimination.

Corporate social responsibility policy template

Policy brief & purpose.

Our Corporate Social Responsibility (CSR) company policy refers to our responsibility toward our environment. Our company’s existence is not lonely. It’s part of a bigger system of people, values , other organizations and nature. The social responsibility of a business is to give back to the world just as it gives to us.

What is corporate social responsibility?

Our Corporate Social Responsibility (CSR) company policy outlines our efforts to give back to the world as it gives to us.

This policy applies to our company and its subsidiaries. It may also refer to suppliers and partners.

Policy elements

We want to be a responsible business that meets the highest standards of ethics and professionalism.

Our company’s social responsibility falls under two categories: compliance and proactiveness . Compliance refers to our company’s commitment to legality and willingness to observe community values. Proactiveness is every initiative to promote human rights, help communities and protect our natural environment.

Our company will:

Respect the law
Honor its internal policies
Ensure that all its business operations are legitimate
Keep every partnership and collaboration open and transparent

Business ethics

We’ll always conduct business with integrity and respect to human rights. We’ll promote:

Safety and fair dealing
Respect toward the consumer
Anti-bribery and anti-corruption practices

Examples of Corporate Social Responsibility

Protecting the environment.

Our company recognizes the need to protect the natural environment. Keeping our environment clean and unpolluted is a benefit to all. We’ll always follow best practices when disposing garbage and using chemical substances. Stewardship will also play an important role.

Protecting people

We’ll ensure that we:

Don’t risk the health and safety of our employees and community.
Avoid harming the lives of local and indigenous people.
Support diversity and inclusion.

Human rights

Our company is dedicated to protecting human rights. We are a committed equal opportunity employer and will abide by all fair labor practices. We’ll ensure that our activities do not directly or indirectly violate human rights in any country (e.g. forced labor).

Proactiveness

Donations and aid.

Our company may preserve a budget to make monetary donations. These donations will aim to:

Advance the arts, education and community events.
Alleviate those in need.

Volunteering

Our company will encourage its employees to volunteer. They can volunteer through programs organized internally or externally. Our company may sponsor volunteering events from other organizations.

Preserving the environment

Apart from legal obligations, our company will proactively protect the environment. Examples of relevant activities include:

Conserving energy
Organizing reforestation excursions
Using environmentally-friendly technologies

Supporting the community

Our company may initiate and support community investment and educational programs. For example, it may begin partnerships with vendors for constructing public buildings. It can provide support to nonprofit organizations or movements to promote cultural and economic development of global and local communities.

We will actively invest in R&D. We will be open to suggestions and listen carefully to ideas. Our company will try to continuously improve the way it operates.

Our company is committed to the United Nations Global Compact. We’ll readily act to promote our identity as a socially aware and responsible business. Management must communicate this policy on all levels. Managers are also responsible for resolving any CSR issues.

Frequently asked questions

Related company policies.

Employee Handbook
Code of ethics policy
Employee Wellness Program Policy

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The Truth About CSR

Most of these programs aren’t strategic—and that’s OK. by V. Kasturi Rangan , Lisa Chase and Sohel Karim

Summary .

Despite the widely accepted ideal of “shared value,” research led by Harvard Business School’s Kasturi Rangan suggests that this is not the norm—and that’s OK. Most companies practice a multifaceted version of CSR that spans theaters ranging from pure philanthropy to environmental sustainability to the explicitly strategic. To maximize their impact, companies must ensure that initiatives in the various theaters form a unified platform. Four steps can help them do so:

Pruning and aligning programs within theaters. Companies must examine their existing programs in each theater, reducing or eliminating those that do not address an important social or environmental problem in keeping with the firm’s business purpose and values.

Developing metrics to gauge performance. Just as the goals of programs vary from theater to theater, so do the definitions of success.

Coordinating programs across theaters. This does not mean that all initiatives necessarily address the same problem; it means that they are mutually reinforcing and form a cogent whole.

Developing an interdisciplinary CSR strategy. The range of purposes underlying initiatives in different theaters and the variation in how those initiatives are managed pose major barriers for many firms. Strategy development can be top-down or bottom-up, but ongoing communication is key.

These practices have helped companies including PNC Bank, IKEA, and Ambuja Cements bring discipline and coherence to their CSR portfolios.

Most companies have long practiced some form of corporate social and environmental responsibility with the broad goal, simply, of contributing to the well-being of the communities and society they affect and on which they depend. But there is increasing pressure to dress up CSR as a business discipline and demand that every initiative deliver business results. That is asking too much of CSR and distracts from what must be its main goal: to align a company’s social and environmental activities with its business purpose and values. If in doing so CSR activities mitigate risks, enhance reputation, and contribute to business results, that is all to the good. But for many CSR programs, those outcomes should be a spillover, not their reason for being. This article explains why firms must refocus their CSR activities on this fundamental goal and provides a systematic process for bringing coherence and discipline to CSR strategies.

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Jeff Bartel is chairman and managing director of Hamptons Group, a private investment and strategic advisory firm headquartered in Miami.

The pyramid of corporate social responsibility (CSR) is evolving, and organizations must evolve with it. Popular theories of business ethics that once maintained profitability as the sole foundational base are giving way to new constructs that place social and environmental concerns on the same level, creating a triple bottom line proposition for corporate entities. Understanding that foundation and how business ethics plays a role in support is critical to developing processes, messaging and company cultures that support growth.

The Triple Bottom Line Has Upended The Pyramid Of Corporate Social Responsibility

Defined by Archie B. Carroll in the latter part of the 20th century, the pyramid of corporate social responsibility contended that companies had obligations in four key areas: profitability, legality, ethics and philanthropy. In Carroll’s model, these obligations were not all equal. Economic drivers were first and foremost, making profitability the pyramid’s base.

Built upon it (in decreasing importance) was the need to obey the law, engage in good business ethics and become a moral member of the community making local contributions.

That model does not work for businesses today. Consumers, governments and cultures are looking for more from corporate entities. It is still essential to maintain a profit. Profitable companies can be better contributors to the community than those that don’t earn a profit. It is equally necessary for businesses to shepherd social and environmental resources.

Thus, the triple bottom line is upending the pyramid, replacing it with a triune obligation toward profits, people and the planet.

The Difference Between Business Ethics And CSR

Doing the right thing, which means engaging in good business ethics, is not the same as corporate social responsibility. CSR is the onus on a business to act in the interest and for the benefit of the community whenever possible—sometimes even at the detriment of a profitable opportunity that may have adverse outcomes for the environment or people.

Business ethics is a broader concept that should govern everything a business and its people do. A company that operates ethically often makes decisions that support strong corporate social responsibility.

In short, if you were trying to re-create a pyramid of CSR with the understanding that profitability cannot be the base, business ethics might be a suitable replacement. When ethics inform everything else up the pyramid, businesses create more consistent approaches to modern CSR, from profits to corporate environmentalism.

Prioritizing Corporate Responsibility And Driving Strong Profits

It is clear to anyone involved in the corporate world that doing the right thing and making the most significant profit do not always align. However, that does not mean you cannot focus on corporate responsibility and ethical business practices while driving and delivering excellent financial profits.

First, modern customers and business partners care about corporate responsibility and ethics and increasingly choose to deal with companies that demonstrate them. While price remains a driver for purchasing decisions, customers also want to work with or buy from brands that align with their personal values. The advent of ethical consumerism is becoming a permanent and important factor in how and where people decide to buy, sell, consume and transact.

A firm’s focus solely on financial profitability may not support business responsibility and ethics. Doing what is suitable for the financial bottom line can sometimes take you off the path of doing what is right for people or the planet. Eventually, customers, clients and other stakeholders may take note of this and stop supporting your business, creating a slippery slope that drives profits down, even if you are focused on them exclusively.

Responsible, ethical businesses can also engage in cost savings when focused on sustainability. While these approaches may require short-term investments that impact profitability, they safeguard profits for the future.

Finally, value-based leaders are more likely to be dedicated to their workforce’s needs, investing in health and wellness initiatives, flexible scheduling and other programs that support work-life balance. That servant leadership approach creates more productive workers and more engaged employees, increasing cost savings and maximizing production. This leads to more significant returns.

Businesses Cannot Afford To Ignore Ethics And CSR

Ethics, values and corporate social responsibility are no longer elements of the pyramid built upon a base that solely prioritizes financial profitability. They are as important as economic stability for the future of businesses, particularly in light of ethical consumerism and corporate accountability in the public square. Corporations and other organizations cannot afford to ignore them.

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7 Best Practices for Creating an Impactful CSR Strategy

What is CSR strategy?

Why have a CSR strategy?

Keep everything organized

Improve impacts

Protect your brand reputation

Take full advantage of CSR program benefits

Best practices for creating a CSR Strategy

1. Link to company values

2. Get insights from your various stakeholders

Poll your customers

Collect employee feedback

Assess community needs

3. Borrow great strategy

4. Establish internal buy-in

Respond to team values

Involve employees in strategy-building

5. Build external partnerships

6. Be clear and transparent

Get specific about goals and outcomes

Make a communications plan

7. Learn, respond, and improve

Plan for reporting and feedback

Be responsive to learning and to the moment

Time for action: Bring your CSR strategy to life

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8 keys to a transformative CSR strategy

What is corporate social responsibility (CSR)?

1. Environmental responsibility

2. Philanthropic responsibility

3. Ethical responsibility

4. Economic responsibilit y

1. Define the purpose driving your organization

2. Align your CSR strategy with your business goals

3. Engage your stakeholders

4. Set measurable goals and track progress

5. Be transparent at every step

6. Continuously innovate and adapt your strategy

7. Collaborate for a broader impact

8. Take a community-centric approach

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8 simple steps to create a CSR strategy

What is a CSR strategy?

Why is a CSR strategy important?

How does CSR integrate into business strategy?

Who decides the CSR strategy?

How to create a successful CSR strategy

1. Define the concept of CSR

2. Understand the benefits of CSR

3. Get project approval

4. Set project goals

5. Run a current CSR analysis

6. Research your CSR initiatives

7. Launch your CSR campaign

8. Manage your program to success

CSR strategy best practices

Wrapping it all up

Corporate social responsibility (CSR) FAQs

Who creates the CSR strategy?

How to Implement Corporate Social Responsibility (CSR) in Your Businesses – A Step-by-Step Guide

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What Is CSR Strategy?

Why Have CSR Strategies?

1. Reputation and Brand Building:

2. Increased Employee Engagement:

3. Reduced Risk:

4. Cost Savings:

5. Positive Impact on Society:

CSR And Its Importance For Businesses

Step-By-Step Guide For Businesses To Implement CSR

Step 1. Assessing Your Business and Setting Goals

Step 2. Building a CSR Team and Engaging Stakeholders

Step 3: Identifying CSR Opportunities and Initiatives

Step 4: Implementing and Managing CSR Activities

Step 5: Measuring and Evaluating CSR Impact

Step 6: Communicating CSR Activities and Impact

Turn Your CSR Vision Into Reality With Social For Action

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