Corporate Social Responsibility (CSR) is a management concept whereby companies integrate social and environmental concerns in their business operations and interactions with their stakeholders. CSR is generally understood as being the way through which a company achieves a balance of economic, environmental and social imperatives while at the same time addressing the expectations of shareholders and stakeholders (Ref: UNIDO).
Corporate Social Responsibility can be seen as a form of built-in self regulating mechanism integrated in to the business model by corporate entities to monitor and ensure its active compliance with the spirit of the law, ethical standards and international norms, and sometimes further some social good beyond the interest of the company and that which is required by the law. In today’s business world Corporate Social Responsibility is also seen as a path to win the trust of stakeholders which shall form the basis of a company’s sustainable growth. The community in which the company serves through its business is a key stakeholder and therefore any Corporate Social Responsibility activity which aids in supporting the community shall directly or indirectly lead to the strengthening the health of its market ecosystem.
Corporate Social Responsibility is associated with the impact of the activities of a company on the social, environmental and economical environment it operates. The necessity to demonstrate the CSR credentials of an organization is gradually emerging as an important criterion for making major business decisions.
CSR could be established by the corporate in many different ways. However in order to ensure that the CSR initiative produce the desired results, it is imperative to implement the CSR programs in a systematic manner. The CSR initiatives of a company shall be in alignment with its strategic vision and at the same time sensitive towards its business culture. The CSR concepts needs to be slowly but steadily interwoven in to the organizational policies and practices in a comprehensive manner so that the economical, social and environmental aspects are given due consideration for decision making at all levels across the organization.
Some of the most common methods of CSR implementation are CSR Value Creation, CSR Risk Management and CSR Social Contributions. CSR Value Creation is established through promoting innovations leading to sustainable business models which shall integrate the industry in to the community. CSR through Risk Management shall include the activities which lead to the better handling of risks through policy of risk elimination and avoidance and by establishing superior monitoring and control mechanisms to ensure strict adherence to the regulations pertaining to the environment and society. The initiative by companies across the world to reduce their carbon footprint is a step in this direction. The other alternative CSR methodology practiced by the corporate are by involving themselves in philanthropic activities and sponsorship linked to the betterment of the community.
Companies who have successfully integrated the CSR principles to their business models stand to benefit in various ways as compared to the companies which are yet to implement the CSR approach. The most visible advantage of implementing the CSR for the company is the improvement in its reputation and branding. It also promotes active stakeholder engagement and stronger bonding of the company with the community. CSR initiatives implemented towards the improving the quality of life of the employees of a company shall lead to better involvement leading to increase in productivity. The benefits of CSR are intangible on most of the occasions as it normally does not equate to material benefits, but are definitely convincing and strong enough to leave a positive impact on the business, society and the environment.