What is corporate social responsibility?

Corporate social responsibility (CSR) is a business model that emphasizes accountability. Instead of focusing on profits, companies with corporate social initiatives try to benefit all stakeholders, including employees, investors and suppliers. With a strong corporate social responsibility program, it’s possible to run a profitable business while minimizing the potentially negative effects of your operations.

Read more: What Is Corporate Social Responsibility?

Tips for implementing a corporate responsibility program

A CSR program is a formal approach to corporate social responsibility . In order to operate with a focused strategy, a business with aCSR program has well-defined policies, procedures and processes related to social responsibility. If you’re tasked with setting up a CSR program, consider these tips to help make it a success.

Define social responsibility

First, define what social responsibility means to your company. For example, you may want to increase your company’s charitable giving, reduce water usage and/or offer a living wage to all employees. Defining CSR makes it easier to develop a strong corporate responsibility program.

Related: 4 Steps to Demonstrate Corporate Social Responsibility

Make sure executives support CSR

Before you implement a CSR program, get support from your company’s CEO and other executives. No matter what type of organizational structure you have, employees generally take their cues from individuals in leadership positions. Make sure to get buy-in from leadership by clearly explaining the benefits of a strong CSR program. For example, if you’re trying to reduce energy usage, achieving your goal can help you lower variable costs, which could have a positive impact on your company’s profit margin.

One way to get support is to tie program results to your executive compensation packages. For example, your CEO may qualify for a larger bonus if the company meets its target for reducing electricity usage.

Executive support can help the entire organization become aligned with the CSR program.

Assess your organization’s needs

The next step is typically to conduct a needs assessment. This type of assessment helps you identify how your company can have a positive impact on its stakeholders. Before you develop a CSR program, make sure you understand the challenges people in your community face. These challenges can help shape your approach to corporate responsibility.

For example, if you operate in an area with low wages, you may wish to attract talent and retain current employees by increasing salaries or adding additional benefits. These options could become some of themost important aspects of your CSR program.

Align CSR goals with your company’s mission

Your mission statement defines your company’s goals and values . A value is a principle or belief that guides the decision-making process. As you build your CSR program, make sure each component aligns with your company’s mission to help ensure all employees embrace the program.

It’s vital that your corporate initiatives align with your organization’s mission. By ensuring alignment, you can avoid confusion among employees and provide clear guidance to teams. In turn, this helps keep morale high and helps to prevent any frustration that may come with unclear messaging.

Seek input from stakeholders

You won’t know what your community’s needs are unless you seek input from stakeholders. Here’s the type of information you can collect from each group:

• Employees: Team members can provide valuable insight into the challenges of living in your community. For example, entry-level employees can tell you about the cost of groceries, medical care and other necessities compared to their wages.

• Investors: Investors want to make money, but many of them also want to have a positive impact on society. Before you launch your CSR program, make sure you find out what investors value. If you send out a survey, you may discover that a majority of investors are concerned about the impact of your operations on the environment.

• Suppliers: If you plan to incorporate fair trade practices into your CSR program, it’s important to seek input from your suppliers. They can help you determine if your CSR goals are realistic or help you identify additional challenges.

• Community members: Your business doesn’t just affect employees, investors and suppliers. It also affects your local community. For example, you may support the local economy by hiring residents or purchasing your supplies from local businesses. Talking with community members is essential for creating a corporate social responsibility program that makes a real difference.

Choose key metrics

Metrics make it easier to assess the performance of a program or an initiative. Before you launch your CSR program, make sure you have several key metrics in mind. Knowing what you want to track makes it easier to collect the right data. Here are just a few examples of key metrics you can use to assess the performance of a CSR program:

• Annual utility costs

• Gallons of water saved per month/year

• Average wages paid to employees

• Total amount of money donated to charitable organizations

• Average reduction in emissions

Promote your corporate social responsibility program

Now that you have a CSR program in place, it’s time to promote it. First, make sure that team members understand how the program relates to your company’s mission and vision. If necessary, have regular meetings to share your progress and let employees know how they can support the program. Remind team members that the success of your CSR program may affect their wages, benefits or employment status.

Corporate social responsibility (CSR) program FAQs

What are the four types of corporate social responsibility?

The four main types of corporate social responsibility are as follows:

• Economic responsibility: Economic CSR requires managers to make financial decisions based on social factors. Traditionally, managers make financial decisions based on profit potential alone.

• Philanthropic responsibility: Philanthropic responsibility refers to a company’s obligation to make the world a better place. You can demonstrate this type of CSR by donating funds to a nonprofit organization or giving employees paid time off to volunteer.

• Human rights responsibility: Human rights CSR emphasizes equal pay, fair trade practices and other human rights principles.

• Environmental responsibility: Environmental CSR requires companies to commit to reducing their environmental impact.

Related: Environmental, Social and Governance (ESG): What Is It, and Why Does It Matter?

What are the 3 P’s of corporate social responsibility?

The three P’s of corporate social responsibility are people, planet and profit. In the past, companies focused on profit alone. Under the CSR model, business owners are also concerned with their impact on community members and the environment.

What are three of the most common examples of CSR?

Three common examples of CSR include reducing pollution (environmental responsibility), requiring suppliers to follow fair trade practices (human rights responsibility) and donating to charitable organizations (philanthropic responsibility).