The Ultimate Guide to Corporate Social Responsibility
Corporate social responsibility (CSR) is a model that businesses originally used to ensure they were making an impact in their communities. Now, it’s evolved to also include their social accountability to employees, customers, stakeholders and members of the public.
In this post, we’ll explore the ins and outs of CSR, including its history, the different types of CSR and its benefits. We’ll wrap up with FAQs.
This article will help you to determine a CSR strategy that fits with your business, while equipping you with the knowledge you’ll need to win internal support and — ultimately — help your people spread more Goodness.
What is corporate social responsibility?
CSR encompasses the ways businesses are responsible corporate citizens to their shareholders, employees, customers, communities and society at large.
Through CSR initiatives, companies focus on profit, people and the planet — the so-called triple bottom line.
They consider the economic, social and environmental aspects of their business.
Think of CSR as an internal and external commitment a company makes to both profit and purpose. It’s a way to showcase how and why their values are ingrained in what they do.
When executed well, CSR can enhance how a business is viewed and approached, helping to share a company’s broader mission with the world.
CSR typically includes:
CSR increasingly includes:
Small Acts of Goodness (e.g., tracking volunteer time, creating a giving opportunity)
For more on what CSR is and why it’s important, check out this episode of The Social Impact Show by Benevity.
The history of CSR
Socially responsible organizations can be traced to the mid-to-late 1800s.
Philanthropy was on the rise at a time when many factory employees faced poor working conditions. This led some businesses to reconsider their production models.
Corporate responsibility gained traction in the early 1950s after American economist Howard Bowen published the book Social Responsibilities of the Businessman.
As companies considered their responsibility to society and looked after their people and the communities they operated in, they saw brand benefits.
A big step toward popularizing CSR came in the 1970s when an American organization, the Committee for Economic Development, formed a social contract between business and society.
Jump forward a few more decades, and academics began to write more heavily on corporate responsibility, outlining ways for businesses to be more conscious of their people and the environment.
Today, CSR is considered a must-have strategy for every business.
It provides many benefits, including enhancing company image, business growth and corporate purpose.
What’s the difference between corporate social responsibility and environmental, social and governance (ESG)?
CSR and ESG are different but overlapping concepts, both addressing the idea a company should play a positive role when it comes to ethics, sustainability and social impact.
CSR involves a broad scope of strategies and initiatives that engage a company’s workforce, customers, the community and society as a whole in positive impact initiatives.
A CSR program’s success can be measured in different ways; there is no standardized system.
ESG (environmental, social and governance) involves quantitative metrics that determine if a company’s CSR initiatives are on track and successful. ESG is less broad than CSR and has specific goals, such as reporting to investors. Businesses can build their ESG profile through their CSR program.
Take a company with a CSR initiative to reduce single-use plastics in the workplace. ESG criteria could include cutting down single-use plastics by 50% in one year and aiming to have 80% of the workforce going plastic-free.
Why is CSR important?
Employees today want to do more than work for a company; they want to work with a company and for a larger purpose. A strong CSR or corporate purpose program is closely connected to a company’s ability to attract and retain the best talent.
Young people are especially aware of their environmental impact and social responsibility, with 74% of Gen Z employees believing work should contribute more to their lives than a paycheck. Advocates like Greta Thunberg and Lauren Singer have brought more attention to eco-anxiety and the importance of socially responsible behavior.
CSR helps our planet, and it also brings economic benefits. Corporate responsibility initiatives increase employee engagement, with research showing companies with higher levels of engagement are 22% more productive and can create 50% higher revenue per employee.
For more on why CSR is important, watch here:
Different types of corporate social responsibility initiatives
The term CSR is broad, and no two CSR programs are going to be the same. CSR can be as extensive as a comprehensive giving, volunteering, granting and customer engagement program that runs all year, or as simple as an annual fundraising campaign.
The focus of a CSR program is influenced by the issues or causes your company has decided it wants to solve for or your people are passionate about.
Programs can address different areas, such as:
- Increasing social responsibility.
- Eradicating child labor.
- Creating free educational services.
- Initiating fair trade practices in supply chains.
- Promoting environmental responsibility.
- Sponsoring local events.
- Using sustainable resources.
- Minimizing the environmental impact of business travel.
These are just a few areas a CSR program can encompass.
Learn more about the types of CSR, and how to choose the right one, on this episode of The Social Impact Show:
Let’s explore what these programs look like.
Employee volunteering programs
Volunteering programs include online and offline activities for teams or individuals.
Volunteering promotes corporate citizenship and governance, and it can be a gateway to increased workplace giving participation.
Corporate giving programs
Also known as corporate philanthropy, corporate giving programs include donations of cash, services or goods.
They can also include setting up corporate foundations, and they often perform best if the cause is close to the business mission or a team member.
This type of CSR involves a business running as environmentally consciously as possible, from finding a plastic-free goods supply chain to offering meat-free lunches and a recycling program.
Employee well-being, diversity and inclusion
CSR is about looking after communities, including a company’s own people.
By improving the employee experience, you’ll affect customers’ perspectives on the company, talent retention and even the bottom line.
Employee well-being includes physical, mental, financial, and social and community well-being.
Physical well-being focuses on your people’s physical health; think offering yoga, gym classes or even bicycles for office commutes.
Mental well-being covers mental health awareness, access to psychologists and health care, counseling and meditation.
Financial well-being activities include tuition assistance, financial planning advice and home office stipends.
Social and community well-being can be built through staff retreats, meet-ups, a book club or other activities that foster genuine connections among team members and build a sense of belonging.
Community investment or granting
Community investment or granting programs make a positive impact on the communities your company serves.
These programs are a powerful expression of your corporate purpose, showing your people, consumers and investors that you care.
CSR increasingly includes customer engagement/giving. This takes various forms, including donation round-ups, loyalty programs, relief campaigns and dedicated giving sites.
Customer giving can even be a sustainable alternative to swag. Simply provide digital or printed charitable gift cards that support a specific nonprofit or let the recipient choose their own cause.
When you make giving part of your brand experience, you empower your customers to do good and you also build brand engagement and affinity.
Micro-actions are another option increasingly included in CSR programs.
Encouraging a variety of small actions in and out of the workplace — from cycling to work every day to going vegetarian for one week — drives big change.
Small actions make it easy for all your people to participate, regardless of time, money, location or job type. Micro-actions are accessible, and they’re also a springboard for more engagement and giving back.
Examples of CSR programs
What does CSR look like for business? Watch these videos to see what three companies are doing.
How Splunk’s first giving campaign turned a modest budget into major impact
How TC Energy used Missions to increase impact and engage more employees
How Intel used a 50th anniversary campaign to increase participation by 64%
Benefits of CSR initiatives
CSR increases employee engagement
Extensive research proves that CSR and a strong sense of employee purpose actively contribute to increased employee engagement. That’s important because when a company has engaged employees, they see a 17% increase in productivity, are 21% more profitable and can have 41% lower absenteeism.
CSR increases revenue
Companies investing in social purpose have a 6% higher market value and generate 20% more revenue than companies that don’t invest in social purpose, according to Project ROI.
CSR supports local and global communities
For all the fantastic benefits your business gets from showcasing your CSR initiatives, it can be easy to overlook its reason for being in the first place.
CSR gives people the leverage and the platform they need to make a difference in local and global communities.
CSR increases investment opportunities
Today, global sustainable investment stands at over $30 trillion worldwide — up 68% since 2014 and 10x since 2004.
Large investment firms are shifting toward sustainable investing and are using ESG to analyze companies and inform decisions.
CSR presents press opportunities
Research has shown that employee beliefs behind CSR initiatives can impact workplace attitudes, trust in top management, organization pride, job satisfaction and even performance.
Your employees are your biggest brand ambassadors — so, lead with authenticity, and authentic press opportunities can follow.
CSR increases customer retention and loyalty
Excellent CSR gives a company a chance to showcase consistency and win loyalty, which ultimately converts into customer retention and increased sales.
Research shows that 87% of Americans are more likely to buy a product from a company that they can align their values with, and over half of all consumers are willing to pay extra for a product if they’re buying from a company with a sturdy CSR strategy.
CSR helps attract, retain and develop talent
Corporate Responsibility magazine found that 75% of Americans would not take a job with a company with a poor corporate responsibility reputation.
@benevity How corporate purpose and #csr key to attract, hire and retain employees. #employeeengagement #corporatesocialresponsibility #greatresignation #racialjustice #diversityequityandinclusion #dei #corporateresponsibility ♬ Inspirational Music - AZOVMUSIC
Benevity’s own research shows that companies with CSR programs where their people are actively engaged in giving and volunteering saw a 57% reduction in turnover for those employees.
CSR helps nonprofits
Through CSR, nonprofits and businesses can create mutually beneficial relationships and strategic programs built on common goals, while simultaneously supporting issues they’re both looking to solve. Build a CSR program that gives employees choice over which nonprofits to support and your people will spread even more Goodness, as their donations and volunteer hours go to many different causes that mean something to them.
6 crucial steps to designing your CSR program
1. Decide on the purpose of your program
Start by gathering a team who can help you brainstorm about the strategic focus of your program. You’ll need to understand what you’re solving for from a business perspective.
If you have an existing program, you can also look at where your people are giving or volunteering to see what they care about.
Once you’re in agreement on those priorities, you can move into exploring how you will bring these focus areas into the employee experience.
Next, you can rank your focus areas and priorities so you can plan what kinds of initiatives or campaigns you can run over the next year based on what you expect will have the most impact.
Not sure where to start? Get the Benevity 2023 Goodness Calendar — it’s packed with 100+ cause-focused awareness dates for the whole year.
2. Circulate your ideas among your stakeholders
Once you have your priorities and focus areas figured out, you can start sharing them with your direct leadership, your partners on other teams and any other stakeholders who will be invested in the work you’ll be doing.
You’ll want their feedback and thoughts early so that you can adjust your focus areas appropriately — and get them excited about the programs you’ll launch!
3. Design and build your program (it’s OK to start small!)
After getting the buy-in you need from your stakeholders, you can focus on implementing specific programs. These will look different for every company, but consider what yours could look like and carve out a budget.
Your programs could be centered on a goal, such as activating a certain number of employees around a social good initiative or a skills-based volunteering program.
You can also consider whether your strategic program will partner with an existing community organization or initiative. Or you can speak to your legal team about whether it’s the right move to set up a foundation.
4. Launch your program
It’s time to share your program with your employees and other stakeholders! When you launch, you’ll want to communicate important information like:
- Why your company is launching (or re-launching) its CSR program.
- The different ways people can get involved.
- How to log in to your program if you have a technology partner.
For ideas on how to improve and increase participation, check out The Social Impact Show’s discussion on the best employee engagement strategies.
5. Set benchmarks and measure your impact
Maybe your goal is to engage 15% of your people in the first year. Or maybe your goal is to distribute three meaningful community grants.
The technology you use will give you the performance-tracking data you need to establish benchmarks for future years.
Watch this episode of The Social Impact Show to learn how to create benchmarks:
Monitoring your progress will provide you with numbers that will get your leadership excited about your CSR activities — ensuring they continue to give their support.
6. Share that impact!
This is the time for storytelling to remind your people and your community of the good you’re doing and to spread more Goodness!
Internally, you could publish blog posts about campaign successes on your website, and you could post updates on social media or your instant messaging platform (such as Slack).
Your CSR team could present at your company’s all-hands meetings to show photos or videos of recent volunteering events, or they could share results from major campaigns like GivingTuesday.
The state of corporate purpose
The dramatic events of the past few years have changed us. Since our world was first turned upside down in 2020, we’ve seen a huge tilt toward corporations and their stakeholders taking action beyond their backyards, rallying around critical issues that matter for the global good.
Corporate purpose is no longer a nice-to-have — it’s business critical.
We took the time to analyze data from our platform to share what these corporate purpose trends mean for our clients in a groundbreaking report. Insights from our community reveal trends shaping the future of corporate purpose:
- In times of need, businesses are stepping up.
- At the root of the Great Resignation is the Great Search for Purpose.
- Employee-led action on diversity, equity, inclusion and belonging is changing corporate culture from the bottom up and the inside out.
- The future of corporate philanthropy is stakeholder philanthropy.
- ESG is how shareholders understand purpose.
Learn more about the top trends, data and stories from more than 850 companies shaping the future of corporate purpose.
Corporate social responsibility FAQs
How can I measure corporate social responsibility (CSR) success?
CSR can be measured the following ways:
- Benchmark your results against competition or top performers.
- Set calendar goals and key performance indicators (KPIs).
- Measure the qualitative effect of a CSR campaign with an employee feedback loop.
- Use digital tools and platforms to evaluate the success of your campaign.
- Analyze other business variables: staff retention, audience size and sentiment.
- Look to bottom-line financials and company value.
What are some KPIs to measure corporate social responsibility success?
CSR business models typically incorporate the following KPIs:
- Higher employee engagement rates.
- Higher employee retention rates.
- Increased online brand sentiment.
- Lower customer churn rate.
- Increased organic searches of your brand.
- Increased employee satisfaction.
Who manages a corporate social responsibility program?
Companies may have a specific CSR department, or they may rely on Human Resources teams or location-specific office managers.
CSR can also be a responsibility of the Marketing or Communications department, depending on what the business hopes to achieve.
What does a successful corporate social responsibility program look like?
No two CSR programs are going to be the same, with identical components or pillars. To build a successful CSR program, decide on its purpose and then circulate your ideas among your stakeholders. Next, design and build your program — it’s OK to start small.
Then it’s time to launch your program, set benchmarks, measure your impact and, finally, share that impact.
How does corporate social responsibility impact revenue?
Companies investing in social purpose see a positive return on investment (ROI) for multiple reasons. Extensive research proves that CSR and a strong sense of employee purpose actively contribute to increased employee engagement, leading to increases in productivity, profitability and innovation.
Benevity data shows that companies who engage their people in doing good see an average of 57% lower turnover (and higher in some industries) — a huge deal when studies show that turnover costs companies hundreds of billions of dollars each year.
CSR has a place in every company
The CSR landscape has changed dramatically over the past 20 years. Now, more than ever, companies are seeing the value of embracing corporate purpose by helping their employees have an impact on the world while they’re at work, investing in their communities and encouraging volunteering.
And companies are seeing the benefits of their CSR efforts: boosts in employee morale, improved retention and higher profits.
Whether you’re launching your program from scratch or building upon a solid foundation to take your program international, now’s the time to have a positive impact on the world.