What Is Corporate Social Responsibility?

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Sara Friedman
Sara Friedman



Whom should businesses answer to? This is the question driving the practice of corporate social responsibility, which holds corporations accountable for not only their internal operations but also for their treatment of employees, communities, and the environment as a whole. 

Corporate social responsibility

Large businesses can have an outsize impact on the planet, both positively and negatively. Corporate social responsibility helps ensure companies leave a positive footprint through thoughtful practices and initiatives.

From funding grassroots charities and reducing carbon footprints to using recycled packaging and local suppliers, businesses are finding innovative ways to lessen negative impacts and foster positive outcomes. 

This article will cover:

What is the purpose of corporate social responsibility?

The aim of corporate social responsibility is to give back to the surrounding community, workforce, or environment while also positioning a business in a positive light with investors and consumers. 

The practice has increasingly become a business priority because of shifting consumer demands. 

According to a 2019 Aflac survey, 77% of buyers are motivated to purchase from companies committed to making the world a better place. Additionally, the majority — 55% — of American consumers say it’s important for companies to take a stand on social and political issues. 

Corporate social responsibility can also have positive internal effects by promoting employee engagement.

“It’s a way to keep employees involved, so it helps with employee turnover,” says Tyler Riddell, CMO of Something Good Consulting Group. “Volunteer events can give employees a sense of purpose.”

According to a Deloitte survey, 90% of Gen Z and millennial respondents are making at least some effort to reduce their own impact on the environment. While 64% of Gen Zs would pay more for an environmentally sustainable product, only 18% believe their employers are strongly committed to fighting climate change. 

Younger generations, who are already entering the workforce, want to work for employes that have ethics and activism that match their own. If brands can show actionable steps toward becoming more environmentally sensitive, they are more likely to be able to recruit top young talent.

What are some examples of corporate social responsibility?

Riddell says that businesses often choose to stick to what they know when it comes to corporate social responsibility: by finding ways to use their own products for good.

For instance, Tech company Texas Instruments gives its graphing calculators to Girl Scouts and introduces them to on-calculator simple coding through self-paced lessons, troop workshops, and TI-facilitated events. It also sponsors STEM camps for young girls in hopes of fostering a future with more female scientists, coders, and engineers. 

To bring philanthropy within the walls of the organization, Texas Instruments matches charitable donations of up to $30k annually per employee.

At clothing company Bombas, the structure of giving back is simple: For each clothing item purchased, one is donated. 

The brand says its products are the most requested items at homeless shelters, and it distributes clothing through a network of 3.5k+ partners including overnight shelters, transitional living facilities, schools, rehabilitation centers, and more. 

Not all corporate social responsibility initiatives involve a brand’s own products: Ice cream company Ben & Jerry’s started the Ben & Jerry’s Foundation to support social justice causes and fund grassroots groups across the US tackling issues such as voting rights, racial justice, and LGBTQ+ rights. 

Why is corporate social responsibility important? 

While doing the right thing is inherently meaningful to many entrepreneurs, corporate social responsibility has real value for businesses beyond the ethical implications. 

“Corporate social responsibility used to be seen as a ‘nice to have,’ but C-suite leaders know now that it can affect the bottom line,” says corporate social responsibility and social impact consultant Brittany Brown.

Brown notes that the public expects more from businesses in 2022, particularly following covid. “Publicly traded companies are no longer just assessed on traditional metrics like revenue and retention, but are increasingly judged on the impact they’re having on society,” she says.

Corporate social responsibility, when done well, can attract and retain top talent, pique the interest of investors, and satisfy customer needs while driving sales — in addition to  contributing to positive changes in the world.

Benefits of corporate social responsibility

The benefits of corporate social responsibility are wide-reaching and include:

  • Improved employee attraction, retention, and morale: Workers are more invested in companies that align with their morals and ethics, and enjoy their work more when there’s a broader purpose. 
  • Support for local and global communities: Corporate social responsibility can make measurable change within local and global communities through philanthropic endeavors such as local activism, safe and ethical employment, and community service initiatives. 
  • Environmental impact: Large corporations are often responsible for outsize harmful effects on the planet. When companies make actionable changes to their environmental practices, such as reducing carbon emissions or material waste, it can have a big impact.  
  • Increased customer retention and loyalty: Customers care about finding brands that reflect their own principles. By implementing corporate social responsibility practices, businesses can increase their customer brand loyalty.
  • Positive public persona and press: Enacting positive change in the world, when done genuinely, builds a positive public image and can foster organic, complimentary press. Words of a good deed can sometimes be the best form of advertising. 
  • Increased investments: Investors keep tabs on what consumers want, and will follow the changing tides toward investing in companies that don’t leave negative impacts on the world. In 2021, more than $500B was invested into ESG funds.

Corporate social responsibility vs. sustainability 

Corporate social responsibility is a broad idea that represents corporations’ commitments to environmental and social causes and their accountability to the public. It is a business model or practice that aims to enhance the environment and surrounding communities (rather than cause harm). 

Corporate social responsibility is often broken down into four categories: environmental, ethical, financial, and philanthropic.

On the other hand, corporate sustainability, a similar business concept, is broken down into three slightly different pillars: environmental, socially responsible, and governance. It’s a growing priority for investors as it prioritizes not only present-day business operations but also the long term well-being of the planet. 

An example of corporate social responsibility would be Starbucks’ initiatives. The brand has started a fund that supports small businesses and development projects in BIPOC communities, and a mentorship program that connects BIPOC employees to senior leadership. 

Sustainability programs have been a focus at Microsoft: It’s been carbon neutral since 2012 and is committed to being carbon negative by 2030. It diverted 15k metric tons of waste from landfills in 2021 and is committed to becoming zero waste by 2030 — a long-term play to ensure the health of the environment far down the road.


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