Corporate social responsibility, or ‘CSR’, is not a new concept. However, in a world facing the consequences of climate change and social issues such as devastating conflicts, growing economic inequality and increasing poverty rates, companies are increasingly acknowledging the importance of CSR to their operations.
In this article, we will explain what CSR means and why it is important for HR professionals to be involved in CSR strategy. We will also provide some background information, examples of where CSR has both worked and gone wrong, and ideas to get you thinking.
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CSR (Corporate Social Responsibility) Definition
The United Nations Industrial Development Organization defines CSR as: “a management concept whereby companies integrate social and environmental concerns in their business operations and interactions with their stakeholders”
Put more simply, CSR happens when businesses actively seek to manage their impact on the environment and society in which they exist. Crucially, while some elements of CSR may be legal requirements, the idea of CSR is one of self-regulation: companies choose to look at their working practices and broader impact because they want to make a positive contribution to the world, not because they are made to do so.
One example is the Modern Slavery Act of 2015, which makes it a legal requirement for companies over a certain size to report on their efforts to combat modern slavery. However, smaller companies with a CSR policy will often have a modern slavery policy despite the lack of legal requirements.
CSR, ESG and B Corps
The idea of CSR has been around for over 50 years since the American economist Howard Bowen wrote about the idea that companies must think beyond the bottom line in “Social Responsibilities of the Businessman” in 1953. CSR predates the environmental, social and governance framework (known as ESG), which has developed since 2004. Although CSR is very much part of ESG and includes ecological concerns, it can be argued that CSR often focuses on the ‘social’ side of ESG and uses a less rigid and more informal approach usually driven by the company itself. With ESG, companies are more commonly using external frameworks and legal requirements to report how they manage their impact on the physical and social environment.
One way that companies with a clear focus on CSR can prove their commitment is to attain B Corp certification. In contrast to self-generated CSR initiatives, B Corp is a nonprofit organisation that sets several standards for companies to prove that their commitment to CSR is rigorous, transparent and accountable. Companies with or applying for B Corp certification have usually already demonstrated their ongoing commitment to understanding, regulating and reporting on their environmental and social impact. They want to take their involvement in making the world a better place to the next level and gain an externally verified certification demonstrating their commitment to potential customers, employees and investors.
Why Having a CSR Plan is Essential in 2023
If you work for a large company, there will likely already be a CSR strategy in place, and you will probably know about it. The business world of 2023 appreciates the importance of being seen to understand and mitigate how your business model impacts both the environment and society. So, beyond the moral imperative, why exactly is CSR an essential part of corporate performance in 2023?
CSR Attracts Talent
Employees increasingly want to work for companies that use socially responsible business practices, so having CSR practices are a crucial way of attracting recruits, especially millennials and generations coming after them. Research has shown that millennials especially value working for companies that are concerned about their impact, meaning doing so gives you a competitive advantage. On the social side, this impact includes initiatives to promote diversity, equality and inclusivity.
CSR Improves Employee Engagement
Companies with a strong CSR strategy give their employees a sense of purpose beyond the financial drivers. Providing an external focus that gives back to the broader world allows the whole company to get involved, creating a sense of unity and teamwork which can improve employee satisfaction with their roles. In some cases, these additional opportunities can also be used for professional development, which also helps with engagement.
CSR Enhances your External Reputation
Customers and shareholders increasingly expect that companies will work hard to embrace environmental responsibility and ensure they aren’t hurting the society in which they operate. In other words, philanthropic responsibility has become more and more important. Companies need corporate social responsibility strategies to show that they take their responsibilities seriously. For many people in the corporate world, there is now an underlying assumption that if you don’t have your “house in order” regarding sustainable practices and ethical responsibility, it is valid to question how robust the business is.
CSR in Practice
It’s all very well understanding what corporate social responsibility initiatives are in theory but it’s always useful to see how something can work in practice. Here we have some general ideas for you to become a socially responsible company, plus some specific examples of global and national companies who have long committed to working in an ethical manner or to minimise their environmental impact.
Suggestions and Ideas
If a company has a CSR strategy, they usually publish it on their website so it’s quick and easy to see what others in your sector are doing. Some of the most common approaches include:
Charitable Work
From supporting individuals in their private fund-raising (for example, match funding) to programmes helping the local community (for example, allowing time for employees to read with children or act as school governors) and sponsoring local events, organisations can enact economic responsibility and support charitable endeavours in ways that go beyond simply donating – although no doubt that is appreciated too.
Sustainable Initiatives
As CSR focuses on how the company can run in a more environmentally and socially responsible manner, initiatives included in a CSR strategy are often targeted to support employees rather than wholesale changes to business practices. Support can consist of encouraging people to walk or use public transport, extra holiday time for those choosing not to fly, incentives to minimise printing, banning single-use plastic in the office, etc.
Corporate Sponsorship
Companies often sponsor community events or sustainable initiatives outside the business as part of their CSR plan. While cynics can argue this means their logo or branding is seen by the wider public, making a financial contribution to help make something happen which has a positive impact on the local environment is definitely in line with a corporate social responsibility policy.
Examples of Companies Getting CSR Right (and Wrong)
Thankfully, you don’t have to look far to find examples of companies getting it right regarding CSR.
Ben & Jerry’s – The Ben & Jerry’s Foundation was established in 1985 as a social justice organisation supporting grassroots groups actively working for racial and social equality.
Levi Strauss & Co – In 1991, Levi’s created their “Terms of Engagement, ” a regularly updated and global code of conduct for all those working for and with them. In 2011, they added their Worker Well-being initiative, which committed to a more sustainable supply chain.
Ernst & Young – Since 2018, Ernst & Young has been focused on positively impacting one billion lives by 2030 through their EY Ripples programme, which shares their expertise and support with young people, entrepreneurs and research projects.
Greggs – At Greggs, staff work together to fund Breakfast Clubs for local schools and grants are given to help those in need within the local community.
However, a note of caution: in today’s climate, organisations are very keen to be seen to be doing their bit, and when you dig under the surface, you may find practices such as greenwashing or social washing where companies are paying lip service rather than making meaningful changes. An excellent example is when the Environmental Protection Agency found in 2015 that Volkswagen had used software to alter the emission tests on some of their vehicles.
The Role of HR in Driving a CSR Initiative
The HR team in any company is integral to the creation, implementation and success of corporate social responsibility initiatives for the following reasons:
- Individuals working within HR may be part of a wider CSR team or they may have overall responsibility for the strategy. Either way, a CSR strategy is only impactful if the company has a culture that takes responsibility, accepts change and works to improve situations. HR teams help to create and develop a company’s culture.
- HR can help with reporting and communication, ensuring that plans are transparent and accountable, that achievements in the CSR arena are celebrated and that senior leadership understand and supports initiatives.
- Some CSR initiatives will involve training, project planning and policy changes, all of which HR teams can support.
- Lastly, HR professionals must promote CSR within a business because of the impact it has, as discussed earlier:
- Attracting & retaining talent.
- Important for DE&I.
- Learning & development programmes need to reflect CSR to stay relevant and help retain employees.
- Employee engagement & satisfaction.
- Future planning.
