Corporate Social Responsibility (CSR) is an action by a corporate to improve its relationship with the community. Another purpose of CSR is to impart positive differences in the community.
Many companies try balancing community responsibility in their CSR with sustainability. For instance, the Ford car industry merges CSR and sustainability by counteracting damage their industry causes to the environment.
Patagonia, a clothing brand, is another example with a corporate model focusing on reducing carbon footprint and recycling. Patagonia Founder Yvon Chouinard calls it “a holistic approach to business” by taking care of most damage while involving the customer. The company encourages customers to repair equipment and clothing so that purchases only happen when necessary. Patagonia’s target is to educate customers to take responsibility for the environment and community.
CSR Ties to Philanthropy
CSR allows companies to make a difference in the community. They use some of the funds from profits for CSR programs. They invest the funds in the nonprofit sector to promote positive changes within the community. Corporations have higher funding than nonprofits. They can become change agents because they influence the economy.
Companies also benefit from CSR because they get more profits when consumers feel they sell ethically-sourced products. Sustainable practices attract business and key stakeholders. Social responsibility directly links the business world to Philanthropy, and the company’s bottom line improves in the process.
Importance of CSR to Corporations
CSR and sustainability are vital to companies for various reasons. Companies engage in corporate social responsibility to gain one of the following.
- Public image
- Social power
- Money and wealth
Companies should think about the stakeholders who will be impacted when making decisions about CSR and sustainability. They should incorporate local communities, employees, and nature when planning environment-based CSR. All of them are stakeholders representing many areas that directly affect sustainability.
Employees are significant stakeholders because they undertake sustainable practices. Social change to reduce, design new products, share information, or anything else starts with workers.
Local communities, too, are stakeholders because they are direct beneficiaries of an organization’s impact through CSR. They are also likely to be supportive consumers.
Nature becomes a stakeholder in CSR practices like Patagonia’s model because the environmental practice can help or harm it.
A CSR program enables a company to make more impact in a community and get more business. CSR programs remain sustainable when companies accommodate stakeholders in decision-making.