CSR: What is corporate social responsibility?
Corporate social responsibility (CSR) consists of voluntarily integrating the challenges of sustainable development into a company's strategy. CSR is, therefore, the responsibility a company takes towards looking after and improving society and the environment. In this article, we’ll look at the corporate social responsibility definition, and give some CSR examples.
Corporate social responsibility: definition
CSR meaningCorporate social responsibility (CSR) is a self-regulating business model that helps a company be socially accountable to itself, its stakeholders, and the public. The idea is that companies put in place policies that enhance society and the environment. CSR goes by other names and acronyms, such as corporate citizenship, corporate responsibility (CR), creating shared value (CSV), and corporate accountability.
Corporate social responsibility is a transversal concept that affects different areas of company management. It refers to the company's commitment to develop its activities by reducing the impact that these may generate on the environment and on its stakeholders.
Since 2011, the European Commission has defined the CSR definition as "the voluntary integration, by companies, of social and environmental concerns in their commercial operations and their relationships with their interlocutors".
The ISO 26000 standard presents CSR around seven central themes:
- The governance of the company;
- Human rights;
- Labour relations and working conditions;
- Fair practices;
- Consumer problems;
- Communities and local development.
What types of companies can implement a CSR strategy?All types of business can implement a CSR strategy, regardless of their size, status or sector they are in.
By implementing a corporate social responsibility policy, companies can voluntarily integrate social, environmental and economic initiatives in their activities and in their relationships with stakeholders (employees, customers, shareholders, suppliers, etc.). By trying to contribute to the goals of sustainable development, they have a positive impact on society and the environment, while being economically viable.
- The benefits of CSR:
- Competitive advantages;
- Better employee productivity;
- Talent attraction and retention;
- Stakeholder loyalty;
- Cost reduction;
- Better reputation and image of the company;
- Contribution to the reduction of poverty and promotion of development.
As well as the benefits of CSR already highlighted, there are also a number of business benefits to having CSR initiatives. These include better access to finance as investors are more likely to favour reputable businesses, reducing regulatory burdens thanks to positive relationships with local authorities, and identifying new opportunities for business.
Why implement a CSR strategy?
There are many advocates for and against introducing CSR in business in the UK. Those in favour of creating CSR policy say it is the best and most likely way that companies can impact society into working towards meeting the 17 Sustainable Development Goals set out in the United Nations 2030 Agenda. Those goals include areas of people, planet, prosperity, peace and partnership.
Those who argue against CSR policy being introduced in businesses claim it is an attempt to pre-empt regulatory requirements and is also a way to simply enhance a company’s name, brand or reputation.
How to introduce a CSR strategy in business?
While having a CSR policy isn’t a legal requirement in the UK, many companies do have one. For it to be successful, there are a number of factors to be considered before introducing one. These include:
- Identify all the stakeholder relationships needed for ethical and sustainable business success;
- Clarify the areas of CSR relevant to the organisation. These could include environmental impacts, salary and remuneration policy, labour conditions, relationships with subcontractors and supply chains, and the impact on the environment and wider community;
- Understand how the CSR strategy being introduced is aligned to business strategy and human resources policies and practices;
- Ensure CSR is properly reflected in employee induction and development so it becomes part of the company culture;
- Measure and evaluate CSR performance effectively so the results can be clearly seen and improved;
- Publicise and promote successes.
Human Resources department and CSRThe Human Resources department and CSR are closely related since Human Resources are in charge of establishing the CSR strategy within the company.
CSR and sustainable development
The actions and activities of companies can have negative impacts on the environment, society and the economy such as:
- Destruction of biodiversity (deforestation, soil deterioration);
- CO2 emissions and global warming;
- Pollution and its impact on human health;
- Child labour;
- Fraud and corruption.
CSR allows companies to identify, measure and evaluate the impact of their activities on the environment, society and the economy, and therefore act more effectively. By better managing their risks and saving, CSR ensures that companies achieve better overall performance.
Although CSR is often associated with protecting the environment, it also intervenes in other areas, such as society and the economy.
Environmental and energy impact:
- Implementation of recycling;
- Apply a responsible purchasing policy;
- Improve the energy performance of the company;
- Carry out a carbon assessment.
- Improve the well-being of your employees;
- Open dialogue with your employees;
- Promote professional integration;
- Promote diversity in the workforce;
- Promote local employment;
- Respect human rights.
- Apply ethical business practices;
- Maintain the business in the medium and long term;
- Maintain a healthy and balanced relationship with suppliers;
- Invest in the intangible capital of the company.
The CSR Pyramid.The framework used by most companies when it comes to CSR policy is known as Carroll's pyramid of corporate social responsibility. Developed by Archie Carroll, the pyramid highlights the four most important types of responsibility of organisations: Economic responsibility, Legal responsibility, Ethical responsibility and Philanthropic responsibility.
Corporate social responsibility: Examples
There are more and more companies introducing CSR practice and policies across the UK. In this section, we’ll look at some examples of CSR at some of the nation’s biggest employers including Tesco, Ikea and Primark.
Tesco is one of the largest supermarket chains in the UK and employs more than 350,000 people. Every year, they are making more efforts to be a leader in CSR efforts across the board. In its latest sustainability update for 2020/2021, the company provided some of the highlights over the past 12 months. These included:
- 1 billion pieces of plastic being removed from UK packaging;
- £129 million donated in fundraising and corporate giving;
- 82% of unsold food being redistributed across the UK;
- A 54% reduction in greenhouse gas emissions compared with 2015.
In addition, in 2020, the company announced a partnership with the WWF to reduce the environmental impact of its food production. Key to that partnership is a goal to increase sales of meat alternatives by 300% by 2025.
Fashion retailer Primark is perhaps one of the most scrutinised companies when it comes to analysing CSR efforts. Critics of the company have long wondered how fast-fashion and cheap clothing - with t-shirts costing as little as £2 - can be ethical or environmentally friendly.
The company came under intense scrutiny in 2013 after more than 1,200 workers were killed at the Rana Plaza garment factory in Bangladesh - the most deadly in the history of the garment industry. While the company already had a CSR policy, it has stepped up its efforts in the wake of the disaster to improve. Some of the measures taken include:
- Signing up for the Accord of Fire and Building Safety in Bangladesh;
- More audits of its supply chain and transparency of garment factory conditions;
- Agreements with NGOs such as Solidaridad, CottonConnect and Made-By to only use ethically sourced cotton;
- Reducing the use of chemicals in the clothes making process.
Popular furniture store IKEA is one of the companies leading the way when it comes to CSR practices. Some of the figures from its latest sustainability report include:
- Serving more plant-based foods: The plant-based ball, HUVUDROLL, is a meat-free alternative to the IKEA meatball. It has only 4% of the climate footprint compared to the ingredients of the traditional meatball;
- Multi-million pound investments: To speed up renewable energy investments in production, and to remove CO2 from the atmosphere through forestry and other land-use projects;
- Increasing the share of recycled polyester: The share of recycled polyester in textile products reached 83%.
Having looked at CSR examples, it is important to highlight the work Selectra does in this area too. Twice a year, Selectra sends green newsletters on its carbon footprint to its employees. The goal is to make them aware of certain simple practices that can have a positive impact on the environment, society and the economy: tips for a green Christmas, green advances in offices, tips on how to use the least amount of energy possible in the workplace, etc. Selectra also calculated its carbon footprint for 2019.