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Corporate Social Responsibility

Corporate social responsibility, often referred to as CSR, is the integration of ethical and moral decision-making into an organization’s business plan.  The goal for CSR policies is to have them included in every aspect of the business plan so they become fully part of the plan.  This is so they will be as effective as possible.  The purpose of CSR is for the company to take responsibility for the footprint they are leaving on the environment (ex. use of electricity, carbon emissions, waste disposal) and make an effort to positively change the effect they leave. 

The implementation of CSR is important for the future of the environment; however, it requires a large initial investment from businesses.  This often deters businesses from adopting CSR policies, as they do not feel the need to spend large amounts of capital and acquire debt when their business is already functioning well.  There is proof that CSR policies generate long-run profitability because many CSR policies adopted help with operations efficiency (reducing energy and using recycled factors of production). In addition to helping the long-term healthiness of our environment, the businesses who adopt CSR policies find that their company image and culture drastically improves.  

There are currently no formal rules and regulations in place regarding corporate social responsibility so many different approaches to CSR exist.   The most common approach is philanthropy which consists primarily of monetary donations or assistance given to non-profit organizations.  An issue with philanthropy is that it does not promote sustainability (the organization may not use the donation effectively).  A second approach is community-based development, where the business directly concerns itself with a specific concern (for example, tree planting or access to clean water).  A third approach is to directly incorporate CSR strategy into the business plan, for example, using only recycled materials to create the final product.  A fourth approach is called creating shared value (CSV), which compares short-term benefits with environmental benefits.  

Notable companies with socially responsible business plans are PepsiCo Inc. (they use all-electric trucks to deliver their goods), Starbucks Corporation (they aim to spend one million hours globally volunteering) and Dell Inc. (they are reducing the amount of packaging, as well as making the packaging they do use primarily recycled or recyclable). 

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