The 4 main types of corporate social responsibility your business should consider (and why)
Corporate social responsibility (CSR) is a business initiative designed to meet specific goals related to ethics, sustainability and social impact. When executed well, it can enhance how your business is viewed and approached, helping to share your company’s broader mission with the world.
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
Follow along to learn how each type can engage employees, improve branding and make a positive social impact.
Plus, on The Social Impact Show by Benevity, CSR expert Nicole Campbell discusses the types of corporate social responsibility and how to choose the right one.
Why is corporate social responsibility important?
In the past decade, the idea that businesses have a responsibility to contribute to the betterment of society has expanded greatly. This responsibility is now a priority for companies of all sizes and industries.
Gone are the days when businesses focused solely on profit.
Consumers today seek transparency from companies, demanding to see concrete plans for how they intend to uphold their responsibility to society.
For this reason, having a CSR program is crucial for customer and employee satisfaction, as well as improving bottom-line financials and employer branding.
It also puts your company into contact with your local communities, creating meaningful opportunities for team building and instilling a sense of purpose in your workforce.
A company’s commitment to CSR isn’t just about meeting requirements around corporate governance. It’s also about standing for something — and taking action to make a real difference.
By implementing a CSR strategy, your company will inspire teams to contribute to the causes they care about in the name of your business. This can help enhance company image, business growth and — ultimately — corporate purpose.
To better understand the directions companies can take with their corporate social responsibility strategies, let’s take a look at the four main types of CSR:
Types of corporate social responsibility
CSR is generally categorized in four ways: environmental responsibility, ethical/human rights responsibility, philanthropic responsibility and economic responsibility. Here, we’re going to examine each one.
1. Environmental corporate responsibility
Environmental responsibility refers to the organization’s commitment to sustainability and environmentally friendly operations.
Every year, more companies are prioritizing sustainable practices, pledging to consider their environmental impact at every stage of business.
This can mean reducing the company’s carbon footprint or greenhouse gas emissions, opting for sustainable resources by avoiding single-use plastics and keeping environmental aspects at the heart of all operations.
However, this environmental responsibility can extend past the company’s promise to sustainable development. If protecting the environment is a part of your corporate mission, you can honor that by encouraging employees to take action.
Nestlé Cares Cleanup
To uphold their company value of protecting the planet with environmentally friendly practices, Nestlé Switzerland organized a volunteer week event centered around corporate environmental responsibility.
Their cleanup week coincided with World Cleanup Day, and it gave their employees hands-on experience in helping to protect their local environment and support communities.
More than 100 employees participated across Switzerland over four days, with six Nestlé sites involved. Thanks to this effort, Nestlé collected 110+ kilograms of trash and contributed to other environmental benefits.
2. Ethical/human rights social responsibility
Ethical responsibility refers to a company’s commitment to operate their business in an ethical manner that upholds human rights principles, such as fair treatment of all stakeholders, fair trade practices and equal pay.
To champion ethical responsibility, many businesses will speak up in the name of human rights injustices such as child labor, racial or gender discrimination and the fight for a higher minimum wage.
Much like with responsibility to the environment, there are ways to endorse ethics at your company by involving employees in the process.
Glovo Cares Volunteer Week
Equal access to essential goods for everyone is one of the main pillars of Glovo’s commitment to serve the community. They set out to build a volunteer program that would engage employees in providing resources to those in need within the communities where they are located.
By organizing a global volunteer week initiative at local food banks, they supported an ethical cause that aligns with their core business in seven countries and nine cities. They contributed over 700 volunteered hours globally — learn how by checking out the full case study here.
3. Philanthropic corporate responsibility
Philanthropic responsibility refers to a corporation’s aims, goals and objectives for actively bettering society as a whole. One huge aspect of corporate philanthropy is donating money from company earnings to worthy causes within the local community — often in the form of a trust or foundation.
These kinds of philanthropic efforts speak volumes to your public image as a business leader, which is crucial in today’s world. There are several ways in which businesses can incorporate CSR in the form of philanthropy while engaging employees, including giving schemes with the potential for donation matching.
NatWest GivingTuesday campaign
For GivingTuesday, NatWest Group employees were invited to give their voice, time and money to good causes. Alongside volunteer initiatives, they were invited to donate money to one of 11 partner nonprofits.
Through this initiative, the bank raised 425,000 pounds in donations during GivingTuesday, with an added 150,000 pounds in donation matching.
4. Economic corporate responsibility
Economic responsibility refers to the practice of making financial decisions based on a commitment to doing good.
Some common examples of economic responsibility include investing in alternative energy sources, putting more money into education programs and funding local charities as a way of bolstering their mission.
To uphold economic responsibility, business leaders are challenged to think past operational cost savings and instead put their obligation to corporate citizenship at the heart of all financial decisions.
Regardless of the type of CSR, consider how you’ll measure your program’s performance and impact. Watch The Social Impact Show to explore how.
Other types of corporate social responsibility
In addition to the four main examples of CSR, there are numerous other areas where corporations can put their focus on being socially responsible for their employees and society as a whole.
Diversity and inclusion
Your company can promote diversity from the inside out by establishing an inclusive hiring practice and encouraging your teams to embrace different cultures, backgrounds and identities.
Another effective way to advance diversity is to challenge your employees to educate themselves on how to be allies during Black History Month, International Women’s Day, Pride and on other awareness days.
Related Reading: The State of Workplace DEI
Governance
There’s a close relationship between the systems that control and direct a business and being a socially responsible company. Good governance benefits corporations and society as a whole.
Governance as a CSR strategy can look a little bit different between companies. Sometimes it involves the legal requirements to give back — and that’s a fiduciary duty.
Well-being
You can show your people that you care about their mental and physical health by making personal well-being a priority.
By inviting teams to participate in well-being challenges, such as goals related to step count, meditation or healthy eating, you give them the permission they need to prioritize their bodies and minds before all else.
Employee engagement
You can keep your teams engaged with your company and the community through CSR initiatives.
Examples include field volunteering events for bonding with team members and personal challenges related to sustainability, diversity and well-being.
Working with a CSR platform is an effective way to track the impacts of your efforts and connect team members on all matters of doing good.
Supply chain responsibility
As a company, you can also be socially responsible by verifying that your vendors and suppliers similarly prioritize making a positive impact.
A socially responsible supply chain includes the manufacturing process and overall operations, and the benefits will be far-reaching.
What are the benefits of CSR initiatives?
Of course, companies are not becoming socially responsible just to meet current ethical requirements. The CSR benefits that come with such initiatives are worth our attention.
When a company implements a CSR strategy, it helps to:
- Increase employee engagement.
- Improve bottom-line financials.
- Support local and global communities.
- Contribute to the United Nations Sustainable Development Goals.
- Access investment opportunities.
- Refine public image and create positive press.
- Boost customer retention and loyalty.
- Enhance employer branding.
You can take the first steps in implementing your own program today. To learn more, check out this episode of The Social Impact Show:
Make your next CSR initiative your best yet
With the help of socially responsible business strategies, your company will remain relevant in the eyes of the public. This will give you an advantage when it comes to attracting talent, retaining customers and operating on a global scale.
Remember, it’s useful to touch on all of the types of corporate social responsibility to create an appealing, engaging and successful program for everyone involved.
This can be a lot to think about — but there are ways to make it easier. Consider working with a CSR platform like Benevity, which helps companies manage and execute CSR strategies in one space.
Our CSR solution provides companies with the capacity to source volunteer activities, challenge employees to make positive personal changes, connect with teams on spreading Goodness globally and access CSR reporting.
This gives every member of the team a sense of shared purpose as you work together to fulfill your company’s broader mission.
FAQs
What is corporate social responsibility (CSR)?
Corporate social responsibility is a business initiative for which a company sets specific goals related to ethics, sustainability and social impact. You can use CSR strategies to positively engage with your workforce, the community and society as a whole.
What are the four types of corporate social responsibility?
The four main types of CSR are environmental responsibility, ethical responsibility, philanthropic responsibility and economic responsibility. However, companies can also consider different forms of CSR, such as diversity and inclusion, governance, well-being and employee engagement.
Why is CSR important?
Corporate social responsibility is important because it enables businesses to take positive action in the name of the business. This is crucial in today’s world, where social responsibility is a number one priority for existing and potential employees and customers, as well as the community.
Which CSR type do you start with for a new program?
If you’re starting a new CSR program, the type to focus on depends on where your company is at and what it needs. In general, employee engagement and corporate philanthropy can be good places to start. Whichever you choose, remember it doesn’t have to be a big initiative in the beginning. Simply starting with a few small activities can take you further than you might expect.