Types Of Corporate Social Responsibility (CSR)

Corporate Social Responsibility (CSR)

What is CSR and why are companies concerned?

Corporate Social Responsibility is a business policy sometimes referred to as “Plan A”, “corporate responsibility” or “building a sustainable business”. It encompasses a wide range of possible activities and companies find it difficult to decide on a focal point.

CSR is often made up of three broad layers, the first being traditional corporate philanthropy – the giving of profits to worthy causes. The second layer helps companies to manage risks by committing to a more transparent reporting of information, as well as to set common rules, spread the risk and share opinions within the industry. Thirdly, CSR helps to create value in the company by showing how

Instead of focusing within the base country, companies assign younger staffs to work on projects in developing countries.
Employees are now more keen to contribute to CSR efforts and this has allowed CSR to go beyond the idea of donating excess profits to foundation and charities.

CSR has also extended to green initiatives by cutting carbon footprints, waste and prudent use of resources. Companies can benefit from this policy as expenses are reduced.

Consumers are also aware of purchases that may contain more carbon footprint over the other. They are often driven to go green and companies must be mindful of the products they sell.

CSR in different countries

The idea of CSR in developed countries such as Japan, USA and the UK are commonplace and most companies make a conscious effort to display CSR.

Given the changing market conditions and the myriad of traditions and priorities in different countries, there is probably no one-size-fits-all approach in implementing

Thus, a solution would be to spread the risk by agreeing on codes of conduct within and across industries with NGOs, governments and key stakeholders.

But, does CSR actually work?

There are several criticisms about how CSR is often just a smokescreen. Critics have objected on 3 main points – 1. The works of CSR should be the government’s responsibility, 2. It distracts attention from what companies should really be doing, 3. It involves the use of shareholders’ money

What CSR has done is to place a foothold on companies to establish their own rules when dealing with issues such as ecological disasters and human rights issues abroad. Governments are willing to let businesses deal with it because the costs are absorbed by them and they take action much faster. However, it becomes difficult to manage such issues when other parts of the world are regulated differently, where corruption or conflict would mean companies are left to free will and conduct.

Some critics argue that companies should focus on generating profits that will create jobs and contribute taxes that support the local government instead of being distracted by the do-good of