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Corporate Social Responsibility (CSR)

by | Apr 20, 2022 | Sustainable Development

Meaning & Definition of CSR

Corporate social responsibility (CSR) refers to how businesses conduct their operations in order to have a good influence on society. It includes topics such as sustainability, social impact, and ethics, and when done well, it should be about core business — how firms generate money – rather than frills like philanthropy.

CSR is a form of business strategy that considers how a company may benefit society as a whole. These can range from more ethical behaviours like philanthropic fundraisers to moral problems like environmental protection and animal experimentation. The overall goal is to strengthen the company’s public relations and brand image.

The economic components of CSR represent a company’s economic duties to society as a whole, as well as how it assures a viable business model. A key CSR term is ‘shareholder value,’ or corporations orienting themselves toward earning profits in order to suit shareholder and investor interests, according to a minimalist economic perspective. This is linked to the belief that businesses have pushed CSR toward profit and financial gain to the detriment of impacted communities and the environment.

The involvement of a company’s staff can be increased if it is socially responsible. Workers are more desirous of becoming a part of something broader than their employment. The majority of CSR is carried out through charitable organisations. Whether it’s assisting with hard labour or assisting with funding.

Read More: Understanding Corporate social responsibility

CSR(Corporate Social Responsibility)

History & Evolution of CSR

Andrew Carnegie, a wealthy businessman and philanthropist, encouraged the affluent to fund social causes based on his conviction in the Gospel of Wealth. Following in Carnegie’s footsteps, John D. Rockefeller donated more than half a billion dollars in the late 1800s.

Frederick Goff, a well-known Cleveland banker, established the Cleveland Foundation. He was a trustee of the Cleveland Trust Company, in 1914. Its goal was to give the community authority by accepting donations from several contributors rather than a single wealth, allowing the society to analyse needs and respond collectively. This was the first community foundation in the United States.

An American economist and the president of Grinnell College, Howard Bowen, is sometimes referred to be the “founder of CSR.” He linked corporate responsibility to society and released Social Responsibilities of the Businessman in 1953, which pushed for company ethics and responsiveness to societal stakeholders.

The notion of the “social contract” between business and society was established by the Committee for Economic Development in 1971, and CSR began to take root in the United States in the 1970s. The social contract is founded on the premise that businesses exist because of public “permission,” and as a result, businesses have a responsibility to productively fulfil society’s needs.

However, it was not widely accepted as a corporate discourse and management strategy until the 1990s and 2000s, when an emphasis on business practice accounting for and addressing stakeholder requirements became more prevalent.

CSR was considered a vital link between corporate strategy and long-term development in the 2000s. Companies that used CSR to align with applicable international and industry norms were among those that did so. Large-scale multinational enterprises with significant public profiles and a conscious of the need to obtain reputational currency through CSR were most relevant to such a link of CSR from the local to the global.

Concept of Charity

Charity is defined as the intentional provision of support or aid to those in need as a humanitarian act. There are many kinds of charitable principles, many of which are linked mostly to religious beliefs. The application of evidence and logic to discover the most effective methods to aid others is known as effective altruism.

Giving money, products, or time to the underprivileged, either personally or via a charitable trust or other noble cause, is known as charitable giving. The term comes from the most evident manifestation of the virtue of charity: providing the means of survival to those who receive it. The poor, especially widowed or orphaned people, as well as the sick or disabled, are often thought to be the rightful receivers of charity. People who are unable to maintain themselves and do not have access to outside resources may approach strangers in public to ask for help.

Charity in Corporate Social Responsibility (CSR) is a new idea that goes beyond just giving and asks companies to go above their legal duties by incorporating social, environmental, and ethical considerations into their business processes.

Sponsoring a charitable initiative and giving your company time are excellent methods to increase awareness about a cause while also promoting your company in conjunction with the organization or event. One of the many benefits of owning a small business is the ability to contribute freely to community groups and philanthropic causes that are important to you. Every day, small business owners give back to their communities by donating money, goods, volunteer hours, and charitable outreach initiatives.

Corporate Philanthropy

The act of a corporation or organization supporting the benefit of others, usually via philanthropic gifts of dollars or time, is known as corporate philanthropy. Corporate philanthropy aids communities where businesses are located. It promotes corporate giving initiatives, which provide organizations with free money. It assists organizations in a variety of ways, including corporate matching donation programs and volunteer grants.

With the support of corporate initiatives, the effect of donations and volunteerism for NGOs may be dramatically amplified. Employee engagement and company value are both boosted by corporate giving. When firms participate in corporate philanthropy, they improve their public image, strengthen their ties with customers, and foster a healthy work environment.

Corporate social responsibility refers to an organization’s entire attitude toward society, whereas corporate philanthropy is a subset of corporate social responsibility. However, philanthropic CSR incorporates much more than just charitable donations. Investing in the community or engaging in local initiatives are two other popular charitable obligations. The fundamental goal is to help a community in some way that isn’t simply about hiring.

Google is well-known for its corporate philanthropy, with hosting various charity programs totalling more than $100 million in grants and investments. The corporation has a volunteer program that permits workers to spend up to 20 hours of work time each year serving in local communities. Furthermore, Google has a matching gift scheme in place, where gifts between $50 and $12,000 donated by workers are matched 1:1.

Corporate Citizenship

Corporate citizenship refers to a company’s social duty as well as how well it complies with legal, ethical, and financial obligations set out by shareholders. Individual and institutional investors are increasingly looking for firms with socially responsible attitudes, such as their environmental, social, and governance (ESG) policies, as corporate citizenship becomes more essential.

The term “corporate citizenship” refers to a company’s social duties. The objective is to raise the level of living and quality of life in the areas they serve while being profitable for all parties involved. The need for socially responsible businesses is growing, motivating investors, customers, and workers to utilize their authority to punish businesses that do not share their ideas.

The need for socially responsible businesses is growing, motivating investors, customers, and workers to utilize their authority to punish businesses that do not share their ideas. All companies have basic legal and ethical obligations; however, the most successful businesses build a strong foundation of corporate citizenship, demonstrating a commitment to ethical behaviour by striking a balance between the needs of shareholders and the needs of the surrounding community and environment. These methods aid in attracting customers and establishing the brand and corporate loyalty.

CSR: An Overlapping Concept

Nowadays, there is a lot of talk about corporate responsibility. The rising awareness of social and environmental concerns has necessitated the development of capacities for businesses to recognize and respond to new opportunities and dangers by connecting issues of responsibility and sustainability with innovative processes.

As a result, today’s businesses place a premium on incorporating responsibility concepts into their competitiveness, economic growth, and technical advancement. Given this viewpoint, the concepts of Corporate Social Responsibility (CSR) offer businesses a framework and tools for integrating responsibility into their corporate objectives and operations.

Even though the CSR idea intrigues scholars from a variety of fields, it is not well defined in the literature or practice. Because this concept encompasses a wide variety of features, it is an ambiguous phrase that is understood differently by various individuals. Even governing authorities and regulators have different perspectives on CSR.

CSR is defined by the European Commission as “the responsibility of businesses for their social implications. CSR is defined by the World Business Council for Sustainable Development as a commitment by businesses to contribute to long-term economic development by collaborating with employees, their families, the local community, and other stakeholders.

CSR, according to McWilliams and Siegel, should be defined as acts that appear to promote some societal benefit in addition to the firm’s interests and what is needed by law.

Concept of Sustainability & Stakeholder Management

Corporate sustainability, or a company’s ability to operate for an extended length of time, is dependent on the long-term viability of its stakeholder connections. Companies require proper mechanisms to evaluate and manage their behaviour to determine if they are effectively reacting to stakeholder concerns and communicating the outcomes.

The goal of these sustainability accounting systems should be to widen and integrate standard financial approaches to company performance monitoring while also considering stakeholder requirements.

If the complete set of stakeholder connections becomes strategic for a company’s long-term performance and survival, corporate success cannot be measured just in terms of creating value for one stakeholder group, namely shareholders.

According to the firm’s stakeholder perspective, a company may endure for a long time if it can create and maintain long-term relationships with all of its stakeholders. These connections are the most important assets for managers to maintain because they’re the ultimate source of organizational prosperity.

Conferring to the stakeholder hypothesis, participation in CSR efforts that stakeholders value might benefit the firm. In this context, CSR is described as a company’s response to its stakeholders’ needs, involving activities that are by definition voluntary and demonstrating the integration of social and environmental concerns into business operations and interactions with stakeholders.

Relation between CSR and Corporate governance

Corporate social responsibility and corporate governance are two sides of the same coin. The inference is that without corporations exercising excellent governance, they are unlikely to have a social conscience and that practising effective corporate governance is the first step toward CSR.

The board of directors and management play a particularly important role since they are the final arbiters of a company’s actions. Because the buck stops with them, they must guarantee that the firms they represent are operated efficiently while also taking into consideration social and environmental problems.

Western countries conceptualize corporate governance and corporate social responsibility (CSR), and their practices have advanced dramatically in the previous decade. During these times, the concept was significantly disseminated to other regions of the world through multinational national firms’ efforts.

CSR is slowly but steadily being ingrained in corporate governance processes. Both Corporate Governance and CSR are concerned with corporate ethics and an organization’s response to its stakeholders and the environment in which it works. Corporate governance and social responsibility improve an organization’s image and have a direct impact on its performance.

More about CSR and corporate governance:



  • Sigma Earth

    The author has done a master's in Environmental science and is currently working as chief Environmental Advisor with New Delhi State Government.

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