Understanding Corporate Social Responsibility and how it can affect your business
You might have heard about Corporate Social Responsibility before but might not have a clear understanding of what it is.
Corporate Social Responsibility will improve your company’s image and help build your brand. It helps to empower your business so that you can use your resources wisely while making money and saving the environment at the same time.
How does Corporate Social Responsibility contribute to the improvement of a company’s image? You can find answers to these questions in this article, including a few others.
What Is The Definition of Corporate Social Responsibility?
According to Investopedia, the term corporate social responsibility (CSR) refers to practices and policies undertaken by corporations that are intended to have a positive influence on the world. The key idea behind CSR is for corporations to pursue other pro-social objectives, in addition to maximizing profits.
In other words, Corporate Social Responsibility is a way in which a company can achieve balance between economic, environmental and social imperatives. This is also known as The Triple Bottom Line.
You need to make a contribution to those less fortunate than you. Your company can support a cause that is close to your heart. You can then also ensure that your business is environmentally conscious whilst still making a profit and running a successful business.
What Is The Main Purpose Of Corporate Social Responsibility?
The main aim of CSR is to maximize shared value among organizations, employees, customers, shareholders, and community members. It helps a business reflect on how the company operates and how they can change to help ensure that they are acting in a responsible way that will benefit those around them.
Why Is Corporate Social Responsibility Important?
CSR is important for several reasons. Firstly, a company needs to operate responsibly. One needs to respect everyone involved in the business, including who you buy from and who you supply. This practice helps create relationships that are based on trust and mutual respect.
A business can make a positive change to the community around them. By donating funds or goods and services, a company is able to uplift the community around them. It will help the community grow and eventually help develop a more sustainable economy that can benefit everyone.
According to Scientific American, America might run out of natural resources in about 60 years. In other words, a business must become more aware of how they use their natural resources and change their ways to become more environmentally conscious. If every business made slight changes to the way that they operate, we might be able to change the world for the better. Thus, prolong the number of natural resources that we have so that we can help sustain the planet for the generations to come.
What Are The Four Types Of Corporate Social Responsibility?
When it comes to CSR, there are four types of corporate social responsibilities that the company has, namely:
Environmental Responsibility
An eco-friendly business strives to achieve the best environmental impact. Environmental responsibility is a common form of corporate social responsibility. Reducing, Reusing, and Recycling is a simple mantra that businesses must follow to impact the world positively.
Ethical Responsibility
Companies that embrace ethical responsibility strive to earn the trust of all stakeholders, including leadership, investors, employees, suppliers, and customers. If your business is run fairly and people are treated with respect, it will build a positive reputation that will attract loyal customers and investors and have the same shared values.
Philanthropic Responsibility
In philanthropic responsibility, businesses strive to make a positive impact on society and the world actively. A business may donate to a cause that is near and dear to its heart or one related to the company directly. A business that positively impacts society is seen as philanthropically responsible in either case.
Economic Responsibility
Economic Responsibility ties the three types above together. This responsibility entails a company backing all of its financial decisions in order to ensure they are making positive moves in the areas above. The ultimate goal of this venture is not only to make a considerable profit but also to positively impact the community, the environment, and society.
What Are The Basic Principles Of CSR?
There are three basic principles when it comes to CSR, they are:
Sustainability
The aim is to ensure that your business helps to sustain the environment as well as social needs. In other words, you need to make sure that your business is doing something positive for the environment as well as for society.
You can volunteer at charities around the area as well as conserve natural resources.
Accountability
You need to be held accountable for your actions. You have an obligation to accept responsibility when it comes to preserving the environment as well as social needs and rights.
Your business needs to be able to take ownership of what happens due to your choices and actions. You want to take responsibility for positive activities such as using natural resources rather than being held accountable for breaking environmental laws in your area.
Transparency
A transparent business is a business worth investing time and money in. Consumers tend to become more loyal to a transparent company and do not hide any information regarding their business practice and policies. These practices include doing charity work and ensuring your customers know exactly where the money is going and how it is being used to help the community in need.
By following the three basic principles of CSR, your company will be able to make a positive difference in so many lives, including the lives of animals from different ecosystems.
Final Thoughts
The Triple Bottom Line is an effective tool that helps companies meet social and environmental standards without compromising competitiveness in developing countries. By adopting this approach for your business, consumers will feel obligated to support your brand because your brand is helping so many lives as well as the environment at the same time.