Corporate Social Responsibility in Modern Business

Writer: Evie Webley

What is Corporate Social Responsibility? (CSR)

Corporate Social Responsibility or CSR refers to the self-regulation of businesses in which they ensure operations are environmentally sustainable and positively impact stakeholders. CSR is more than just abiding to basic legal requirements of sustainability; it entails going beyond the law to ensure the practices of the business are beneficial to communities and the environment.

In 1991, Archie Carroll developed a model, outlining four responsibilities that businesses should fulfil to ensure that corporate social responsibility is maintained. Carroll’s CSR pyramid separates CSR into economic, legal, ethical, and philanthropic expectations for businesses. The economic responsibility of a business is to remain profitable and continue trading. Legal responsibilities of businesses are compliance with legislation, for example employment law. The ethical expectations in CSR are that businesses should operate ethically, rather than just legally, ensuring that they avoid harm to stakeholders. Philanthropy is the highest level of expectations on the CSR pyramid, involving the responsibility of businesses to give, such as charity donations or fundraising activities.

Why is CSR Important in Business

Consumers are becoming increasingly aware of the impacts business operations have on society and the environment. Unethical businesses are more frequently criticised and boycotted for their neglect towards CSR principles. An example of this is SHEIN, a fast fashion brand that has been accused of poor health and safety management, as well as unfair wages in the manufacturing of garments. To combat this, consumers are switching to sustainable fashion, such as thrift shops and buying preloved clothing on sites like Vinted and Depop.

The awareness consumers have on the impact of businesses on the environment puts pressure on companies to develop CSR practices and policies. CSR is essential to a positive brand image and reputation, increasing value perception in consumer eyes; it improves competitive performance through this added value, attracting new customers away from less socially responsible competitors. Adoption of CSR practices can be a key contributor to business success.

Examples of Socially Responsible Businesses

Lush is a well-known cosmetic brand, selling a range of products including bath bombs, shower gels and more. Their company values are clearly outlined on their website, stating the belief that ‘all business should be ethical, and all trade should be fair.’ CSR is a core priority for Lush, advocating for the abolishment of animal testing. In store packing represents the company’s belief that cosmetic testing on animals is cruel. All Lush products are assessed for safety and effectiveness on human volunteers, as well as in-vitro methods using human cell cultures.

Since 2007, Lush has donated a total of £80 million through the Lush Charitable Giving stream. In addition to this, the ‘Charity Pot’ scheme has given 13,000 grants globally to raise money for small charities and campaigners working in the areas of animal protection, human rights, and the environment.

How Can you Become More Socially Responsible

There are several ways a business can become more socially responsible. Taking inspiration from Lush, advocating for a cause that is strongly aligned with the values and culture of the business is an effective way to improve brand image, and establish ethical practices. Philanthropy in the form of charity work and donations is again beneficial to the reputation of a business, however this may be difficult for SMEs and Start-ups with little financial resources.

Becoming more socially responsible does not always require large donations to charities or expensive, resource heavy fundraising events. For SMEs and Start-ups, increasing CSR can simply involve switching to more energy efficient resources such as LEDs, or using a smart meter to track energy consumption. CSR is also about empowering internal communities as well as external stakeholders. Prioritising employee well-being, through hosting wellness programmes or mental health workshops, can also improve CSR and company reputation.

Starting small when increasing CSR can help to ingrain ethical values into the core culture of an organisation. This encourages employees to focus on their personal ethical practices, overall contributing the social responsibility of the entire organisation. Large contributions to positively impacting society are just as important as the small, individual actions of employees.