CSR

Business, Legal & Accounting Glossary

Definition: CSR




Full Definition of CSR


Corporate social responsibility (CSR) is a recognition by businesses that they must look after their social, environmental, ethical and philanthropic relationships.

The World Business Council for Sustainable Development, in its publication “Making Good Business Sense”, defines corporate social responsibility as follows:

“Corporate social responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large.”

This is close to the traditional European model is much more focused on operating paternalistically. Social responsibility is integrated into the wealth creation process. However, it should be noted that it has generally been practised by the higher-margin industries (e.g.: chocolate manufacturing in nineteen century England).

In many parts of the world today, socially and environmentally responsible investing is the fastest-growing segment of the financial services industry. One of the primary reasons for this astounding growth is the competitive financial performance from screened investments along with growing public awareness of the link between responsible business and a viable future.

In the United States, the emphasis has historically been on corporate philanthropy. The dominant libertarian free-market philosophy expects companies to make profits, unhindered except by fulfilling their legal duties. Then they donate a certain share of the profits to charitable causes. This can be seen as a very pure form of charity since typically a company would not donate to a cause from which the company would receive any direct benefit.

Underlying all business activities is the addition of value to raw materials. This is more significant in the case of manufacturing, but even services consume and convert materials. The management of the supply chain, processes and waste disposal was the first area modern environmental activists targeted since the effects are obvious, easily understood and visible. The impending “end-to-end” EU legislation and fact that ISO standards now require environmental process management shows how far individuals, organisations and companies have accepted that businesses are responsible for their environmental impact.

Environmental CSR tends to focus on large-scale projects related to but external to the company. Classic examples are paying for the reforestation of an area close to a large-scale manufacturing plant and supporting company volunteers to clean up a natural wilderness close to the company’s home town.

Philanthropy

In the United States, the emphasis has historically been on corporate philanthropy. The dominant libertarian free market philosophy expects companies to make profits, unhindered except by fulfilling their legal duties. Then they donate a certain share of the profits to charitable causes.

This can be seen as a very pure form of charity, since typically a company would not donate to a cause from which the company would receive any direct benefit.

However, corporate philanthropy has, in recent years, developed into an interest-focused activity. For example, technology companies donate products and training, as well as cash, in line with the company’s worldview. Thus, elements of CSR, including image management, are starting to be blended with corporate philanthropy.

In Europe, there is a long tradition of interest-focused philanthropy, although it has tended to be more disengaged from the business and more directed by the owner or management.

Resource Management

Underlying all business activities is the addition of value to raw materials. This is more significant in the case of manufacturing, but even services consume and convert materials. The management of the supply chain, processes and waste disposal was the first area modern environmental activists targeted since the effects are obvious, easily understood and visible.

The impending “end-to-end” EU legislation and fact that ISO standards now require environmental process management shows how far individuals, organisations and companies have accepted that businesses are responsible for their environmental impact.

Resource management has a number of aspects, ranging from waste disposal to supply chain management, and from process engineering to recycling. The common thread is the factoring of environmental impact on business decisions.

Companies involved in CSR

  • HSBC
  • DHL
  • Starbuck’s Coffee
  • Johnson & Johnson
  • Sodexho
  • Sonae Sierra

Synonyms For CSR


Corporate social responsibility

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Definition Sources


Definitions for CSR are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 28th March, 2020 | 4 Views.