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Corporate social responsibility (CSR) is a self-regulating business model that helps MiProfile to be socially accountable to itself, its stakeholders, and the public. By practicing corporate social responsibility, MiProfile can be conscious of the kind of impact they are having on all aspects of society, including economic, social, and environmental.
Engaging in CSR means that, in the ordinary course of business, MiProfile is operating in ways that enhance society and the environment instead of contributing negatively to them.
Corporate social responsibility is a broad concept that can take many forms depending on the company and industry. Through CSR programs, philanthropy, and volunteer efforts, businesses can benefit society while boosting their brands.
For a company to be socially responsible, it first needs to be accountable to itself and its shareholders. Companies that adopt CSR programs have often grown their business to the point where they can give back to society. Thus, CSR is typically a strategy that's implemented by large corporations. After all, the more visible and successful a corporation is, the more responsibility it has to set standards of ethical behavior for its peers, competition, and industry.
Small and midsize businesses also create social responsibility programs, although their initiatives are rarely as well-publicized as those of larger corporations.
In general, there are four main types of corporate social responsibility. A company may choose to engage in any of these separately, and a lack of involvement in one area does not necessarily exclude a company from being socially responsible.
Environmental responsibility is the pillar of corporate social responsibility rooted in preserving mother nature. Through optimal operations and support of related causes, a company can ensure it leaves natural resources better than before its operations. Companies often pursue environmental stewardship through:
Ethical responsibility is the pillar of corporate social responsibility rooted in acting in a fair, ethical manner. Companies often set their own standards, though external forces or demands by clients may shape ethical goals. Instances of ethical responsibility include:
Philanthropic responsibility is the pillar of corporate social responsibility that challenges how a company acts and how it contributes to society. In its simplest form, philanthropic responsibility refers to how a company spends its resources to make the world a better place. This includes:
Financial responsibility is the pillar of corporate social responsibility that ties together the three areas above. A company makes plans to be more environmentally, ethically, and philanthropically focused; however, the company must back these plans through financial investments in programs, donations, or product research. This includes spending on:
Some corporate social responsibility models replace financial responsibility with a sense of volunteerism. Otherwise, most models still include environmental, ethical, and philanthropic types of CSR.
As important as CSR is for the community, it is equally valuable for a company. CSR activities can help forge a stronger bond between employees and corporations, boost morale, and aid both employees and employers in feeling more connected to the world around them. Aside from the positive impacts on the planet, here are some additional reasons businesses pursue corporate social responsibility.
According to a study published in the Journal of Consumer Psychology, consumers are more likely to act favorably towards a company that has acted to benefit its customers as opposed to companies that have demonstrated an ability to deliver quality products.3 Customers are increasingly becoming more aware of the impacts companies can have on their community, and many now base purchasing decisions on the CSR aspect of a business. As a company engages more in CSR, they are more likely to receive favorable brand recognition.
In a study by Boston Consulting Group, companies that are considered leaders in environmental, social, or governance matters had an 11% valuation premium over their competitors.4 For companies looking to get an edge and outperform the market, enacting CSR strategies tends to positively impact how investors feel about an organization and how they view the worth of the company.
Yet another study by professionals from Texas A&M, Temple, and the University of Minnesota, it would found that CSR-related values that align firms and employees serve as non-financial job benefits that strengthen employee retention. Works are more likely to stick around a company that they believe in. This in turn reduces employee turnover, disgruntled workers, and the total cost of a new employee.
Consider adverse activities such as discrimination against employee groups, disregard for natural resources, or unethical use of company funds. This type of activity is more likely to lead to lawsuits, litigation, or legal proceedings where the company may be negatively impacted financially and be captured in headline news. By adhering to CSR practices, companies can mitigate risk by avoiding troubling situations and complying with favorable activities.
CSR strategies may be difficult to strategically assess because not all benefits may be financially translatable back to the company. For example, it might be very difficult to assess the positive impact on a company's brand image that planting 1 million trees may have.
In 2010, the International Organization for Standardization (ISO) released ISO 26000, a set of voluntary standards meant to help companies implement corporate social responsibility. Unlike other ISO standards, ISO 26000 provides guidance rather than requirements because the nature of CSR is more qualitative than quantitative, and its standards cannot be certified.
ISO 26000 clarifies what social responsibility is and helps organizations translate CSR principles into practical actions. The standard is aimed at all types of organizations, regardless of their activity, size, or location. And because many key stakeholders from around the world contributed to developing ISO 26000, this standard represents an international consensus.