We explain what corporate social responsibility is, its importance, types and examples. Also, how it benefits a business.
What is corporate social responsibility?
Corporate social responsibility (CSR) or corporate social responsibility (CSR) it is the obligation that corresponds to any profit-making organization regarding the improvement of the field in which it operates, that is, with the economic, social and cultural improvement of the surrounding community.
This type of responsibility goes beyond the necessary compliance with laws and regulations, and the ordinary operation of the company, and assigns it an active and voluntary role within the dynamics of supporting local impact initiatives. In other words, It is a community social work that the company carries out, to give back to the community a part of the wealth that, thanks to it, the organization can generate on a daily basis.
Thus, a company can support cultural, educational, environmental, sports, community plans or of any kind, as long as they lead to the improvement of the quality of life, so that the presence of the company not only benefits its shareholders, but society in general. The larger the size of the company, the greater is expected to be its contribution to improving people’s quality of life.
The origin of corporate social responsibility dates back to the 19th century, at a time when large corporations sought to strengthen their ties with democracy and with people’s standard of living, thus encouraging the idea that the economic progress of the organization it would bring with it a general improvement for the people.
Importance of corporate social responsibility
Corporate social responsibility is essential in the integration between the corporate world and the community, that is, to prevent corporations from operating in a way totally disconnected from the needs of their environment, as autonomous units that could be anywhere else.
The purpose of CSR is to promote dialogue between both parties and integrate the company into the social, economic and cultural ecosystem of the city, at the same time that it translates into particular benefits for organizations.
Types of corporate social responsibility
Corporate social responsibility can be classified according to the specific area of impact it has on the community, into three large areas:
- Economic impact, in the case of initiatives aimed at improving community living standards, promoting local exchange or entrepreneurship dynamics, or financially sponsoring students, athletes or artists.
- Environmental impact, in the case of initiatives aimed at caring for or promoting care for the environment, such as recycling campaigns, environmental cleaning, reforestation or education for responsible consumption. This also applies in an urban sense less linked to conservationism, as in the repair of streets or urban cleaning, in short, in any sense that benefits the living environment of the population.
- Social impact, in the case of initiatives more linked to community life, that is, with plans to promote culture and sports, educational plans or the promotion of new forms of social bond, through events, forums, fairs, etc.
Benefits for the company
Just as the community is improved by the initiatives developed by CSR, organizations also receive in return some direct or indirect benefits for their operation, such as:
- Customer loyalty. The presence of the company in the community takes on a positive and beneficial vision, which generates greater acceptance margins for its campaigns in the community, giving it an advantage over the competition. This is known as loyalty: the clientele becomes loyal to the company, they choose it over others, since this is how they feel that they collaborate with these social initiatives.
- Reduction of taxes and operating costs. As a reward for their investments in local development, the State often benefits companies by reducing their tax burden. At the same time, the improvement of the very environment in which the company operates improves the quality of work of its employees.
- Opening new markets. Many times the economic and social sponsorship initiatives carried out by companies are transformed into new markets or new areas of investment that allow the diversification of corporate interests.
- Flexibility and greater adaptability. The proximity between the company and the environment provides important feedback to the latter, which allows it to design new strategies to reach its clientele, thus expanding its area of influence.
Examples of corporate social responsibility
Some examples of CSR campaigns are the following:
- Starbucks investment in Central America. The famous coffee chain supports small coffee producers in countries such as Costa Rica, Guatemala, Nicaragua and Honduras, betting on the international growth of the coffee segment in the world, instead of an anonymous exploitation of Third World resources. This translates into making producers more visible and offering them a better deal than traditional companies would.
- Levi’s Less Waste Initiative. This American blue jeans company is committed to sustainable development, reducing as much as possible its generation of waste and its consumption of water, as well as the use of at least 20% of recycled materials.
- The Red Bull Academy. Red Bull, the maker of energy drinks, has run a social training program known as the Amaphiko Academy, which sponsors local life-enhancing projects. The idea is that this way, little by little, a great social impact can be generated.