What Is CSR? Corporate Social Responsibility Explained (2024)

What Is CSR?

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

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

Key Takeaways

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

Understanding Corporate Social Responsibility (CSR)

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

Types of CSR

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


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

Benefits of CSR

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

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

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

CSRprograms can raise morale in the workplace.

Company Examples

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

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

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

Why Should a Company Implement CSR Strategies?

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

What Is ISO 26000?

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

What Are the Benefits of CSR?

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

What Companies Have the Best CSR?

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

The Bottom Line

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

What Is CSR? Corporate Social Responsibility Explained (2024)


What Is CSR? Corporate Social Responsibility Explained? ›

Corporate Social Responsibility is a management concept whereby companies integrate social and environmental concerns in their business operations and interactions with their stakeholders.

How do you explain CSR? ›

Corporate social responsibility (CSR) is a strategy undertaken by companies to not just grow profits, but also to take an active and positive social role in the world around them. The term is also associated with the related term corporate citizenship.

What is the concept of corporate social responsibility CSR? ›

Corporate social responsibility is a business model by which companies make a concerted effort to operate in ways that enhance rather than degrade society and the environment. CSR can help improve society and promote a positive brand image for companies.

What is the main point of CSR? ›

Corporate social responsibility programs aim to give structure to a company's efforts to give back to the community, participate in philanthropic causes, and provide positive social value. Businesses increasingly turn to CSR to make a difference and build a positive brand around their company.

What is CSR corporate social responsibility example? ›

Corporate social responsibility, or CSR, helps to boost a company's public image and reputation among its employees, as many people choose to work for a business that does good in the community. Types of CSR include philanthropic efforts, volunteerism, environmental and sustainability initiatives and humanitarianism.

What is the first definition of CSR? ›

The most earliest and prominent definitions ascribed to CSR is the one given by Howard Bowen who (Carroll, 1999) refer to as the father of Corporate social responsibility “the obligations of businessmen to pursue those policies, to make those decisions, or to follow those lines of action which are desirable in terms of ...

How can CSR benefit a company? ›

We'll cover the top seven benefits of having a CSR program, including:
  1. Increased employee engagement.
  2. Better bottom-line financials.
  3. More support for local and global communities.
  4. Increased investment opportunities.
  5. Press opportunities and brand awareness.
  6. Increased customer retention and loyalty.
  7. A stronger employer brand.

What are the four corporate responsibilities of CSR? ›

Types of Corporate Social Responsibility
  • Environmental Responsibility. ...
  • Economic Responsibility. ...
  • Philanthropic Responsibility. ...
  • Ethical Responsibility.

What is the conclusion of CSR? ›

Conclusion. For most businesses, it is important to come together and develop guidelines for social responsibility initiatives. Through this approach, they can operate in a consistent and responsible manner. Overall, they will have an effective and consistent approach.

Which are the 3 main concepts involved in CSR? ›

There are three pillars of corporate sustainability: the environmental, the socially responsible, and the economic.

What are the three core focuses of CSR? ›

Corporate social responsibility as a specific theory affirms that corporations are entities with economic, legal, ethical, and philanthropic obligations. Corporations responsible for a triple bottom line seek sustainability in the economic, social, and environmental realms.

Is CSR mandatory? ›

Why CSR is mandatory? The Companies Act, 2013 provides for CSR under section 135. Thus, it is mandatory for the companies covered under section 135 to comply with the CSR provisions in India. Companies are required to spend a minimum of 2% of their net profit over the preceding three years as CSR.

How do you demonstrate CSR? ›

Here are seven tips you can follow to ensure your company is a responsible corporate citizen.
  1. Adopt a business code of ethics. ...
  2. Follow a workplace health and safety program. ...
  3. Commit to protecting the environment. ...
  4. Get your suppliers on board. ...
  5. Be smart about donating money. ...
  6. Don't greenwash your business.

What are the four types of CSR? ›

We'll be discussing the four main types of corporate social responsibility in this article:
  • Environmental social responsibility.
  • Ethical/human rights social responsibility.
  • Philanthropic corporate responsibility.
  • Economic corporate responsibility.


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