Four types of Corporate Responsibility a Business can Practice

Learning Outcomes:

–  Develop knowledge about how organisations have implemented CSR

–  Gain an understanding of the CSR Certifications that exist

In recognition of how important socially responsible efforts are to their customers, employees and stakeholders, many companies focus on four broad CSR categories. 

1. Environmental efforts: Here the primary focus of CSR is the environment. Businesses have large carbon footprints, regardless of size so any actions a company can take to reduce its footprint is considered good for both the company and society.
2. Philanthropy: Businesses can practice social responsibility by donating money, products or services to social causes and nonprofits. Larger companies tend to have plentiful resources that can benefit charities and local community programs; however, even as a small businesses can make a difference. Select a specific charity or program and reach out to the organization. What are their specific needs? What can you do; donate money, time or company’s products to best help them.
3. Ethical labor practices: Companies can demonstrate CSR by treating employees fairly and ethically. This is especially true of businesses that operate in international locations with labour laws that differ from those in their home country.
4. Volunteering: Participating in local causes or volunteering your time (and your staff’s time) to community events.  When support is given without expecting anything in return, the company expresses concern (and support) for specific issues and social causes.

Building a socially responsible business

While startups and small companies don’t have the deep financial pockets that enterprises have, their efforts can have a significant impact, especially in their local communities. 

When identifying and launching a CSR initiative, involving employees in the decision-making process is key. It creates an internal team committed to identifying organizations or causes related to your business or ones that employees feel strongly about. This increases engagement and success when employees and the business contribute to something that matters to the employees. Involving your employees in the decision-making process can also bring clarity and assurance to the team. 

Whichever strategies you use for sustainable development, be vocal. Let your consumers know what you are doing to be socially conscious.

[Related read: PayPal’s Mission for Corporate Social Responsibility]

Consumers should have the opportunity to share in the good feelings associated with doing the right thing, and many surveys have found that consumers are inclined to purchase a sustainable product over a conventional alternative. Announcing these benefits is a win-win from both a commercial and sustainability perspective.

Top Tip: Make your employees and team part of the decision-making process for your social responsibility efforts.

What to avoid when creating a socially responsible business model

Becoming a socially responsible business can be simple, but there are a few caveats. 

1. Choose Related Activities

Avoid participating in charitable efforts that are not related to your core business focus or that violate your company’s ethical standards in any way. Idnetify a nonprofit that your company believes in or invest in a project in your community. 

2. Don’t use CSR as a marketing scheme.

Don’t use CSR opportunities solely for marketing purposes particularly if the business doesn’t follow through.  Adopt socially responsible business practices over time. Employees and consumers react positively to companies that embrace long-term social responsibility. 

3. Don’t wait for the industry to catch up.

If you are considering sustainable activities that aren’t legally required yet, don’t wait. By adopting socially responsible norms early on, you set the bar for your industry and refine your process. [Related read: 14 Examples of Socially Responsible Businesses]

Undertaking CSR initiatives is a win for everyone involved. The impact of your actions will not only appeal to socially conscious consumers and employees, but can also make a real difference in the world.

CSR certifications

While many companies self-assess their CSR efforts, often the most practical and trusted way to prove your company’s social accountability to the public is to undergo a third-party social impact assessment. 

These three corporate social responsibility certifications can help you achieve public recognition for your sustainability and CSR efforts. 

B-corp certification

Certified B corporations, or B-corps, are companies verified by B Lab to meet high standards of social and environmental performance, accountability, and transparency. To become a B-corp, a company must undergo a rigorous and holistic verification process every three years, integrate B-corp commitments to all stakeholders (rather than only shareholders) into its governing documents, and pay a sales-based annual fee. 

While B-corp status is mainly associated with multinationals like Patagonia or Ben & Jerry’s, small businesses and startups that strive for social and environmental excellence can also receive this CSR certification. The first step is to complete the free and confidential B Impact Assessment on the B Lab website and receive a minimum score of 80. If you meet the baseline, you can submit the impact assessment for review and start the verification process. 

Did you know? The world’s most searched-for B corporation is the Australia-based educational platform Moodle. Its mission is to “empower educators to improve our world.”

ISEAL code compliance

ISEAL Alliance is a global membership organization for credible sustainability standards whose members include Fairtrade International, Gold Standard, Alliance for Water Stewardship and more. An assessment from ISEAL is carried out by an independent third-party verification provider that determines whether a business meets Codes of Good Practice and can be deemed ISEAL Code Compliant. This assessment offers a reputable seal of approval for companies that emphasize sustainability.

In some circumstances, verifications from ISEAL members can directly impact business continuity. For example, the absence of a certification from the Roundtable for Sustainable Palm Oil can effectively close down a supply chain for some consumer brands. 

SASB standards

The Sustainability Accounting Standards Board is one of the most established environmental, social, and governance (ESG) guidance frameworks, providing standards for disclosing the financial impact of a company’s sustainability efforts. In other words, it allows businesses to communicate the financial outcomes of their CSR and ESG measures to investors and other stakeholders. 

SASB Standards are evidence-based, cost-effective, market-informed, and  industry-specific, covering 77 industries. These standards help produce structured, comparable, and standardized data that is perfect for both internal and external communications of CSR and ESG impacts.

Examples of CSR companies

Six companies practicing corporate social responsibility on a large scale. 

• LEGO: The toy company has invested millions of dollars into addressing climate change and reducing waste. LEGO’s environmentally conscious efforts include reduced packaging, sustainable materials, and investments in alternative energy.
• TOMS: TOMS donates one-third of its net profits to charities that support physical and mental health as well as educational opportunities. During the pandemic, the brand directed all charitable donations to the TOMS COVID-19 Global Giving Fund.
• Johnson & Johnson: The brand Johnson & Johnson focuses on reducing its environmental impact by investing in alternative energy sources. Globally, Johnson & Johnson also works to provide clean, safe water to communities.
• Starbucks: The global coffee chain has implemented a socially responsible hiring process to diversify its workforce. Its efforts are focused on hiring more veterans, young people looking to start their careers, and refugees.
• Google: Google has demonstrated its commitment to the environment by investing in renewable energy sources and sustainable offices. CEO Sundar Pichai is also known to take stands on certain social issues.
• Pfizer: The pharmaceutical company’s focus on corporate citizenship is reflected in its healthcare initiatives, which include spreading awareness about non-infectious diseases and providing accessible health services to women and children in need. 

Key takeaway: No matter the size of a company, socially responsible practices can not only benefit a business, but also make a positive impact on the world.