Businesses need to do much more than making high profits for success. It is important for a business to become socially responsible in order to survive in the economy. Businesses need to take a stand on important social issues in order to create a brand that their customers will respect and trust. Some aspects might be required by the law and many others are chosen by the company in the form of corporate social responsibility.
Corporate social responsibility is the commitment made by a company to manage the social, economic, and environment effects of the operations in line with the expectations of the public. Every company has a unique approach to corporate governance and it usually touches all the aspects of the business- human resources, operations, health and safety, manufacturing, supply chain, and more.
CSR activities include:
- Supporting the charitable organizations in the area where the company operates,
- Company policies that work with partners who follow ethical business practices,
- Investing in health and safety programs,
- Promoting equal work opportunities for men and women.
Types of Corporate social responsibility
As a business owner, consider the 4 main types of corporate social responsibility and choose how you can implement the program that is ideal for your company.
The biggest companies in the world are working towards philanthropic efforts. All size and types of companies can engage in philanthropic efforts. Supporting a good cause can also help with marketing since the community becomes aware of the business. It can be a great experience and the company is seen in a positive light. Charities and local communities always need help. Companies engage in the community and they understand that it is good for the company too. A lot of companies give employees an opportunity to help locals and address issues of homelessness and poverty in the area. It is an opportunity to choose where to spend volunteer efforts best to improve the community.
2. Environmental conservation
We come across several headlines about environmental concerns. It could be a local problem like a chemical spill or a long term issue like climate change. When it comes to environmental concerns, no issue is too big or small. Companies align themselves with these efforts and help reduce environmental issues by taking actions like cutting down on their carbon footprint. A lot of companies do get attention for the commitment towards the environment. Even small steps like having a recycling plan on site can make a difference. A small but significant contribution towards the conservation of the environment can go a long way. Companies also ask their suppliers to follow the same. Many companies only work with suppliers who take appropriate environmental measures.
3. Human rights practices
Businesses understand that diversity exists at the place of work when everyone works as a team. It is equally important to remember that labor policies will apply to all employees, even the top executives of the company. Companies review their diversity policies from time to time and address any violations or complaints. It builds a strong and positive company image.
4. Ethical business practices
This type of corporate social responsibility focuses on the practices that help with the long term growth of the business and also meets the standards set for the environment and ethical practices. When economic decisions are balanced, it has a direct improvement in business operations. Businesses can engage in sustainable practices that can benefit the company in the form of low cost of materials and consumption of fewer resources. One of the main focus of ethical business practice is to prove fair labor practices to employees of the company and the employees of the suppliers. Ethical business practice also means equal pay for equal work and the use of products that have been certified as meeting the standard of fair trade.
All businesses share details about the action taken on corporate social responsibility. It throws light on how the company is working to bring about a change in the community and how far it has been successful in it. Let us take an example below.
CSR for Starbucks
A well known organization, Starbucks practices corporate social responsibility. The company is all about being responsible and working towards things that are good for one another and the planet. Their CSR initiatives are as below:
- Youth Action Grants that inspire and support youth action.
- A commitment towards the purchase and sale of ethically traded coffee.
- Using the U.S. Green Building Council’s LEED certification program for energy and water-efficient store designs.
- An Ethos Water Fund that raises clean water awareness and provides children with access to clean water.
- Starbucks also uses minimal single-use plastic to protect the environment.