Modern customers expect companies to do more than offer quality products and strong customer service. To keep their loyalty, businesses must make intentional choices that support meaningful causes aligned with their values.
This approach is called Corporate Social Responsibility (CSR) and is a key component of Environmental, Social, and Governance (ESG) principles. While CSR focuses on a company’s voluntary efforts to make a positive social and environmental impact, ESG goals provide a measurable framework for assessing these efforts.
Read on to learn more about corporate social responsibility, see some CSR examples, and discover how board management software helps boards of all sizes meet CSR goals, and improve ESG reporting.
What is Corporate Social Responsibility?
Corporate social responsibility requires businesses to operate ethically while considering their impact on society and the environment. For instance, organizations may practice CSR by reducing their carbon footprint, ensuring fair labor conditions, engaging in philanthropy, or supporting their local communities. By integrating social and environmental concerns into their operations, businesses can enhance their reputations and strengthen customer trust.
CSR plays an important role in corporate governance as a board of directors often determines which initiatives most closely align with its goals and identifies specific ways to work toward exceeding these standards.
A lack of CSR in the workplace can dampen customer loyalty, cause reputational damage, and even cause employees to look for a new employer that more closely aligns with their values.
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Types of Corporate Social Responsibility
Businesses can support CSR in a number of ways. The four most common types of corporate social responsibility include environmental responsibility, economic responsibility, philanthropic responsibility, and ethical responsibility.
Environmental Responsibility
Socially responsible organizations prioritize sustainability and environmentally friendly practices. Stakeholders who care about sustainability are far less likely to support businesses that cause excessive or unnecessary harm to nature. To align with both organizational goals and sustainability initiatives, board members must actively develop policies to promote responsible practices.
Some common ways businesses incorporate environmental social responsibility include:
- Choosing energy-efficient light bulbs, cleaning supplies, packaging, appliances, and other materials.
- Minimizing the amount of packaging used for shipping orders, storing supplies, and other uses.
- Prioritizing recycling and composting.
Economic Responsibility
Boards must also make responsible and ethical economic decisions to protect the organization and safeguard its reputation among customers and donors. Businesses and nonprofits manage large sums of money, and corporate social responsibility provides clear guidelines for responsible spending.
Organizations can demonstrate economic responsibility in several key ways, including:
- Donating money or other resources to organizations that support similar goals and initiatives.
- Shopping locally when sourcing materials, ingredients, and other products and services to enhance the local economy.
- Providing transparent data detailing where donations come from and how money gets spent.
Philanthropic Responsibility
Philanthropic responsibility refers to a company’s commitment to giving back to society through charitable donations, community programs, and social initiatives. Businesses go beyond their financial and legal obligations to support causes that improve lives and create positive social change.
Examples of philanthropic responsibility may include:
- Donating a percentage of profits to charities, disaster relief efforts, or nonprofit organizations.
- Encouraging employees to volunteer by offering paid volunteer days or organizing community service projects.
- Funding scholarships, school supplies, or mentorship programs to support underprivileged students.
Ethical Responsibility
Corporate board members are ultimately responsible for ensuring that an organization conducts itself in an ethical manner. This includes both interactions among team members and with customers or people outside the organization. By being proactive about clearly defining appropriate behavior, boards can prevent confidentiality concerns, harassment issues, transparency problems, and other ethical violations from occurring.
Examples of ethical responsibility include:
- Ensuring safe working conditions, fair wages, and equal opportunities for all employees, regardless of gender, race, or background.
- Maintaining honesty in advertising, avoiding misleading claims, and openly communicating policies with customers and stakeholders.
- Refusing to work with suppliers that exploit workers or harm the environment, ensuring its supply chain meets ethical standards.
Benefits of Corporate Social Responsibility
When businesses practice corporate social responsibility, they often notice more satisfied customers and higher revenue. Some of the many ways CSR benefits organizations and nonprofits include:
- Stronger employee satisfaction, engagement, and retention.
- Increased customer loyalty.
- Better relationships with other organizations in your community.
- A better overall reputation that attracts new customers while retaining current customers.
Examples of Corporate Social Responsibility
Corporate social responsibility is a flexible concept that businesses can adapt to support their specific goals. Here are some common ways businesses successfully implement CSR initiatives:
- Switching to environmentally friendly packaging by using smaller quantities of more sustainable materials.
- Contributing products, resources, and time to community organizations and nonprofits.
- Becoming a certified B Corporation that promotes various forms of social change.
- Creating a more ethical supply chain by supporting employee health and well-being.
- Prioritizing ethical sourcing practices.
- Choosing sustainable practices whenever possible.
Getting Started With OnBoard
Running a socially responsible organization begins with ensuring that your board of directors or trustees stays organized and can effectively track CSR strategies.
Board management software, such as OnBoard, helps board members achieve these goals. The software streamlines the planning, implementing, and tracking of CSR initiatives, including tools for creating agendas and integration with other software your business already uses, like Microsoft Office and Zoom.
Key OnBoard features include:
- Agenda creating tools: Easily create, customize, and distribute meeting agendas to board members, ensuring efficient meetings.
- Secure document management: Securely store, organize, and share documents with board members, enabling easy access to important materials.
- Real-time collaboration: Enable board members to collaborate on documents, share feedback, and make decisions in real time from anywhere.
- Voting and polling: Streamline decision-making with secure voting and polling features, allowing board members to cast votes directly through the platform.
Seeking a solution to enhance CSR Initiatives? Download our Board Management Software Buyer’s Guide to learn more about what to look for when choosing a tool to help your board meet its CSR strategies.
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Ready to supercharge your board’s effectiveness? Request your free trial of OnBoard today to get started.
About The Author
- Josh Palmer serves as OnBoard's Head of Content. An experienced content creator, his previous roles have spanned numerous industries including B2C and B2B home improvement, healthcare, and software-as-a-service (SaaS). An Indianapolis native and graduate of Indiana University, Palmer currently resides in Fishers, Ind.
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