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Corporate Social Responsibility (CSR) is a model of self-regulatory business practice adopted by organizations with the aim of being socially accountable to all stakeholders. Practicing CSR which is also known as corporate citizenship helps them to be conscious about the impact they make on all aspects of the society socially, economically and environmentally. Engaging in CSR means that the organization is conducting itself in such a way that it contributes positively to the development of society and the environment rather than negatively, in the normal course of business.
There are several ways in which organizations can practice CSR, but the central objective of most CSR initiatives and methods is to improve and preserve the society, economy and the environment they operate in. The growing social and environmental consciousness in a rapidly changing world means that employees prefer to work with and customers prefer to buy from businesses that prioritize CSR; more people now hold businesses accountable for facilitating social change with their profits, practices and beliefs.
Thus, engaging in CSR initiatives does not only benefit the external stakeholders but it has also become increasingly necessary for businesses themselves just to remain sustainable. Also, it has been seen that organizations that practice CSR stand to benefit in several ways. Firstly, the public’s perception of an organization is critical to its success and CSR helps it in building a positively perceived image. Secondly, strong and well-implemented CSR initiatives provide the opportunity to practice good corporate citizenship and thus protect it from significant risks present in the modern, heavily regulated business environment. Thirdly, research has shown that top talent in the world today prefers to work for businesses that have a proven sustainability track-record.
Organizations can choose their activities based on the area in which they want to make a positive impact in. CSR initiatives and practices have traditionally been divided into four broad categories by the type of activities and the area of impact. These include:
Most organizations today recognize that CSR is an essential factor to their success and believe that people—both employable talent and customers are more likely to engage with them when they have the image of an ethical and socially responsible brand. CSR policies and activities can therefore be an important component of their corporate relationships with the public. Personal convictions of business leaders also motivate them to emphasize on policies that encourage CSR engagements.
The International Standards Organization (ISO) released a number of standards called ISO 26000 in 2010 to help in the implementation of CSR more effectively. These standards act as guidelines rather than compliance requirements because CSR is voluntary and qualitative, not compulsory and quantitative by nature. This also means that CSR initiatives are not measured on a standard scale and thus, not certified. What ISO 26000 does is that it helps organizations understand the essence of social responsibility and then put CSR ideas and principles into action. The guidelines are applicable for all organizations irrespective of their size, business and location. The standards were formed through a consensus among key stakeholders from across the world; hence they are the basis on which all modern CSR initiatives are developed to build a socially responsible organization.
Building a socially responsible organization does not require huge financial resources. Small businesses and startups can also make significant impact on their local communities through pocket-friendly initiatives. Earmarking a relatively small 5% of their earnings, small businesses can start by donating to local causes and then move up from there to bigger initiatives. Apart from using the ISO 26000 standards and earmarking funds, there are two other important factors to building and being seen as a responsible business: involving employees in the process of deciding on and developing CSR activities; and publicizing the activities so that stakeholders, especially consumers are aware of the socially conscious efforts.
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