Corporate Social Responsibility: How to Develop a CSR Strategy

Corporate social responsibility (CSR), also known as corporate citizenship, is a commitment that a business makes to amend its everyday operations to impact the world positively. CSR initiatives can take many forms—from reducing environmental externalities to taking on philanthropic causes—and engage different spheres of influence. Still, the unifying factor is the recognition of a company’s responsibility to improve global well-being rather than just focusing on the bottom line.

Large companies and corporations are more likely to take on CSR efforts than local businesses because these are typically the entities with the resources to give back. Sir Richard Branson, the founder of global entity Virgin Group, has contributed to many philanthropic initiatives throughout his life. His personal way of thinking drives Virgin’s CSR.

Richard says, “I have a philosophy. … Everybody should draw a ring around themselves. And you’ve got to make sure that you, as a human being … have got a well-balanced life. … And once you feel secure … you can then increase the size of the ring around your family, your friends, your neighbors, and then you can increase it around your community and try to help your community. … And companies, just like individuals, should draw rings around themselves as well.”

Here are some popular examples of CSR focus areas.

1. 1. Economic: Economically oriented CSR activities involve changing a company’s business model or supply chain to prioritize ethical labor practices. For example, a business improving its economic sustainability may prioritize local manufacturing avenues or cut ties with factories that use child labor. They may also stipulate sustainable development criteria for new facilities.
2. 2. Environmental: Companies engaging in environmental CSR efforts focus on minimizing their impact on the Earth and its resources. A business choosing to focus on environmental sustainability may incorporate renewable energy into its operations to reduce its carbon footprint and climate change contributions. In addition to focusing on greenhouse gas emissions, environmental responsibility can also involve reducing the amount of waste a company releases into the surrounding ecosystems.
3. 3. Ethical: A company prioritizing ethical CSR aims to improve the well-being of its employees with more socially conscious hiring practices and corporate culture. “By traveling the world, by listening, by keeping my ears open,” says entrepreneur Sir Richard Branson, “I can see injustices everywhere. And I think we as entrepreneurs are in the most fantastic position to try to address some of these injustices and … make sure we bring an end to them.” Business leaders interested in pursuing a more ethical CSR strategy may create more generous health care and compensation plans for employees, incorporate diversity initiatives into the corporate governance structure, and create in-house enrichment and advancement opportunities.
4. 4. Philanthropic: Philanthropic CSR programs involve giving back to global and local communities. A business’s chosen philanthropic efforts often align with the kind of culture it wants to foster and its desired public image.

Here are some of the positive impacts of developing CSR initiatives.

• Appeal for investors: Contemporary investors often incorporate a company’s commitment to human rights and the environment into their decision-making process. A demonstrated record of economic responsibility can also make a big difference.
• Improved brand image: Corporate social responsibility improves a company’s brand image and public relations. This results in consumers feeling good about spending their money with that particular business. Publicizing the positive impact a company has on the world can also attract new market segments.
• Improved employee morale: When a company incorporates socially, environmentally, and economically sustainable measures into its business practices, it can improve employee engagement and boost morale. Employees are often more excited about work and likelier to remain at a job if they feel good about their employer’s impact on the world.

Here are a few tips for developing a sustainable business that incorporates corporate social responsibility.

1. 1. Create an environmental impact report. Investing the time and money to analyze a business’s effect on the world ecosystem is an excellent first step in identifying ways to reduce waste and energy consumption.
2. 2. Implement volunteer opportunities. Designate a company-wide volunteer project or allow your employees to take days off to work on their own volunteer projects. Alternatively, develop initiatives that encourage your employees to give back to the community. This could go a long way toward assisting government programs or nonprofit projects, or it could help to fill gaps that exist otherwise. “I think that the business community needs to help government as much as it can,” Richard says, “and dive in and think of entrepreneurial ways of … sorting out the problems of the world.”
3. 3. Prioritize diversity initiatives. HR departments may miss out on qualified diverse applicants because their pool is limited to a network of nondiverse current employees. Building initiatives to find and attract more diverse applicants develops a workforce comprising a variety of backgrounds, which can improve the experience of all employees.

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