CSR 101: The Ultimate Guide to Corporate Social Responsibility

What is Corporate Social Responsibility (CSR)?

Corporate Social Responsibility (CSR) refers to the way companies integrate environmental, social, and ethical concerns into their business operations and interactions with stakeholders. It’s based on the idea that businesses have a responsibility to contribute to the well-being of society beyond their economic activities.

This includes initiatives like:

• reducing their company’s carbon footprint
• promoting workplace diversity and inclusion
• supporting local communities
• ensuring ethical supply chains

By embracing CSR, companies can build a more sustainable and responsible business that contributes to the greater good of society.

Types of CSR

Corporate social responsibility can be broken down into four major categories:

• Economic responsibility: a company’s commitment to making financial decisions that not only benefit company growth but also benefit the community at large. As an example, a company can choose to purchase sustainable materials even when those materials may come at a higher cost.
• Environmental responsibility: a company’s commitment to sustainable processes, environmentally-friendly operations, and efforts to reduce their carbon footprint. This is one of the most common forms of CSR. Examples include on-site recycling programs and pledging a percentage of donations towards tree conservation.
• Ethical responsibility: a company’s commitment to fair treatment of all parties involved with a company’s affairs (employees, customers, investors, suppliers, etc.). This can also involve the refusal to work with other companies that use exploitative labor practices. Common examples include making sure your vendors/manufacturers are using ethically-sourced materials and are paying a fair wage to employees.
• Philanthropic responsibility: a company’s commitment to giving back a portion of its profits to a cause or community. Common examples include giving direct donations to nonprofit organizations, creating foundations, or sponsoring events and fundraisers.

The History of CSR

The term “Corporate Social Responsibility” was coined in 1953 by American economist, Howard Bowen. In his book, Social Responsibilities of the Businessman, he identifies the power corporations have over society and therefore the obligation they have to pursue policies that benefit the common good.

In the 1970s, the concept of “The Social Contract” was introduced by the Committee for Economic Development (CED), and emphasized that because companies exist thanks to public consent, those companies are then obligated to contribute to the needs of society.

In the 1990s and early 2000s, the creation of organizations such as the Global Reporting Initiative (GRI) and the United Nations Global Compact established standards for CSR reporting and encouraging responsible practices.

Today, CSR has become an increasingly vital part of a company’s business strategy, transcending from being merely important to virtually mandatory. In an era where social and environmental issues are at the forefront of public consciousness, corporations are expected to demonstrate their commitment to CSR.

In just the last 20 years, companies have shifted from just showing the initiatives they put in place for CSR to really measuring and reporting its impact. According to Dave Stangis, Founder & CEO at 21C Impact and Former Chief Sustainability Officer at Campbell Soup Company, “There were clearly some companies doing this work in the past, but so many things have changed since then. Technology has changed. Product offerings have changed. Transparency or the ability for the external world to see what’s going on behind the scenes at a company has changed. As a result, companies have really shifted their focus from being good corporate citizens to measuring impact. How many kids have we touched? How many dollars have we given? How many things have we cleaned up? These are activity measures. What leading companies are doing today is seeking to measure outcomes – both the business bottom line and in society.”

Importance and Benefits of CSR

• Consumer expectations: Studies have shown that consumers are increasingly conscious of the social and environmental impact of businesses. 87% of consumers stated they would purchase a product based on a company's commitment to social and environmental causes.
• Company reputation and brand image: Demonstrating a strong commitment to CSR can enhance a company's reputation and brand image. 91% of consumers indicated that they are likely to switch to a brand that supports a good cause, given similar price and quality.
• Employee engagement and retention: CSR initiatives can significantly impact employee engagement and attract top talent. 77% of millennials consider a company's social and environmental commitments when deciding where to work, and 61% said that a company's social impact programs influenced their decision to accept a job offer. Companies that prioritize CSR also have a 38% higher employee retention rate compared to companies that do not.
• Risk mitigation: Companies that proactively address environmental, social, and governance issues are better prepared to handle regulatory changes, avoid reputational damage, and minimize legal and financial risks. A study by Bank of America determined that companies with better social impact records had greater three-year returns and were more likely to become “high-quality” stocks. Their stocks were also less likely to have substantial price drops, and the companies were less likely to experience bankruptcy.
• Financial performance: The majority of investors agree (73%) that a company’s efforts to help improve society and the environment contribute positively to the return on stockholders’ investments. 72% of companies also include sustainability performance in their annual financial reports.

How to Implement Corporate Social Responsibility (CSR) Programs

Starting a CSR program within your company is no simple task, but the outcomes are worth the energy it takes to get things going. Here are 8 steps you can take in order to implement your own program:

1. Analyze your company’s current CSR practices: Begin by evaluating your company's current practices and identifying areas where CSR initiatives can make a positive impact. Consider your core values, stakeholder expectations, and the social and environmental issues relevant to your industry.
2. Set goals and objectives: Define clear and measurable goals that align with your company's mission, values, and the identified areas of impact. If you’re not sure how to identify potential areas of impact, we recommend starting with the United Nations Sustainable Development Goals.
3. Determine resourcing and budget: Take stock of the resources you have at hand, including human capital, time, money, and equipment/materials. If you’re looking to implement a giving program as part of your CSR efforts, this budget calculator can help provide an estimate.
4. Engage stakeholders: Involve key stakeholders such as employees, customers, suppliers, and local communities in the development of your CSR program. Seek their input and if possible, incorporate their perspectives to build an inclusive program.
5. Develop policies and practices: Establish policies and practices that guide your CSR initiatives. These may include things like ethical sourcing guidelines,  environmental management policies, and an HR policy around employee giving and volunteering.
6. Collaborate with partners: Consider partnerships with nonprofits, industry associations, or other businesses to amplify the impact of your CSR efforts. Collaborative initiatives allow you to leverage expertise, resources, and networks.
7. Measure and report progress and impact: Establish metrics and indicators to track the progress of your CSR program to ensure you’re meeting set goals. Then use these metrics to communicate progress through sustainability reports or public disclosures.
8. Leave room for continuous improvement: CSR is an ongoing journey. Don’t forget to regularly review and refine your CSR program based on feedback, changing stakeholder expectations, and emerging social impact trends.

Examples of Corporate Social Responsibility (CSR) Programs:

If you’re looking for inspiration, here are some examples of companies that have implemented successful CSR programs and initiatives:

DigitalOcean created an employee referral program to include giving credits that employees could then use to donate to causes they care about. If an employee refers a candidate, and that candidate is hired, the referring employee receives a $3,500 referral bonus in addition to a $1,500 charitable donation paid by DigitalOcean. If the employee chooses to contribute an additional portion of the payout to charity, DigitalOcean also matches that added donation.

The Coca-Cola Scholars Foundation runs one of the largest scholarship programs in the United States. They’ve awarded more than 6,750 Coca-Cola Scholars with more than $81 million in educational support since 1989. An achievement-based program, it recognizes 150 students each year who are making a positive impact in their schools and communities through their leadership and service with a $20,000 college scholarship.

As for the Coca-Cola company itself, they’ve expanded their efforts by releasing a new prototype of a 100% plant-based beverage bottle. Working with several technology partners, their aim is to create a new bottle with the lowest possible carbon footprint. And as a larger goal, they aim to develop sustainable solutions for the industry as a whole.

Quotient expanded its philanthropy program to focus on three core pillars of giving: economic stability, technological equity, and environmental sustainability. To encourage employee participation, they provided a new hire credit grant, employee donation matching, and paid time off for volunteering. As a result, they saw improved philanthropic engagement across their global workforce, and participation rates increased both domestically and internationally.

Rivian extended their commitment to sustainability beyond the electric vehicles that they manufacture. They did so by implementing a hybrid volunteering experience for their employees. This meant that both employees in the office and employees in the factories could participate. They each received a box with materials that allowed them to plant and care for 2 trees per employee.

REI made their #OptOutside movement a permanent, yearly commitment. Every Black Friday, they close all of their brick-and-mortar stores, do not process any online payments, and give their employees a paid day off to spend in nature. REI purposely chose time outside over the busiest in-store shopping day of the year, emphasizing the importance of nature and mental health over company profit.

What is CSR Software?

If you’re thinking about starting a new CSR program at your company, it can seem like a daunting task. Or, if you’re currently running multiple programs, juggling spreadsheets and trying to measure impact can be laborious and time-consuming.

That’s where software can step in. CSR software can help you streamline your efforts from implementation and management all the way through to reporting. Because not all software platforms have the same features, it’s important to list out your needs and compare vendors. Common features of CSR software include:

• Employee engagement tools: these include features like employing giving, company matching (where you match your employees’ donations), running giving campaigns for awareness months, employee recognition credits, and in-person and remote volunteer opportunities. Employees should also have the ability to give in multiple ways: by payroll deductions, credit card, bank drafts, or PayPal.

Did you know? More than 8 in 10 employees say they are more likely to donate if a match is offered.

• Data management: your platform of choice should make it easy for you to see employee donations, how much you’ve matched as a company, the causes employees care about most, logged volunteer hours, and more.
• Reporting capabilities: this gives you the ability to evaluate the impact of your programs, monitor progress towards your CSR goals, and help you demonstrate transparency to stakeholders
• Integrations: look for integration capabilities with other software like HR, payroll, and team communications for seamless data exchange and operational efficiency. Common examples include integrations for automated payroll deductions and Slack notifications to keep employees updated.

Our Bright Funds CSR software includes all the features listed above, including the ability to donate to over 2.3 million nonprofits and explore over 450,000 volunteer opportunities.

Learn More

Interested in starting, improving, or expanding your current CSR program?

Schedule time to speak with one of our team members about how we can help.

_Sources

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