Corporate Social Responsibility (CSR) is a form of corporate self-regulation integrated into a business model. CSR is equally equivocated to mean corporate conscience, corporate citizenship or responsible business.
CSR policy functions as a self-regulatory mechanism whereby a business monitors and ensures its active compliance with the spirit of the law, ethical standards and national or international norms. Often times, the binary choice between complying with the law and going beyond the law must be qualified with some nuance, just as there is a thin line in deciding between actions that appear to further some social good, beyond the interests of the firm and that which is required by law.
The aim of CSR is to increase long-term profits and shareholder trust through positive public relations and high ethical standards to reduce business and legal risk by taking responsibility for corporate actions. CSR strategies encourage the company to make a positive impact on the environment and stakeholders including consumers, employees, investors, communities, and others.
CSR aids an organization's mission as well as serve as a guide to what the company represents for its consumers. Business ethics is the part of applied ethics that examines ethical principles and moral or ethical problems that can arise in a business environment. ISO 26000 is the recognized international standard for CSR. Public sector organizations (the United Nations for example) adhere to the triple bottom line (TBL). It is widely accepted that CSR adheres to similar principles, but with no formal act of legislation.
Read Also: SDG Watch, Indicators and Projections
CSR matters because increasingly, all stakeholders in a business seek to understand and value the mission of the company, and why they should invest and support in it. It is becoming more mainstream as forward thinking companies embed sustainability into the core of their business operations to a create shared value for business and society. Sustainability is not just important for people and the planet, it is also is vital for business success.
More practically, [CSR] often represents the policies, practices and initiatives a company commits to in order to govern themselves with honesty and transparency and have a positive impact on social and environmental wellbeing. Communities are grappling with problems that are global in scope and structurally multifaceted – Ebola, persistent poverty, climate change. The business case for engaging in corporate social responsibility is clear and unmistakable.
CSR is becoming mainstream such that Consumers are not the only ones who are drawn to businesses that give back; the next generation of employees is seeking out employers that are focused on the triple bottom line: people, planet and revenue. A company's CSR strategy is a big factor in where today's top talent chooses to work.
The benefit of CSR to the organization and the community is underscored by the finding that in recent history, the organizations that have achieved remarkable things tend to be the ones that share success with others.