Types of Corporate Social Responsibilities to Exercise
Corporate social responsibility is the moral responsibility of the business to society. During the past few decades, many scholars and practitioners have attempted to define corporate social responsibility and citizens’ expectations on how they would like businesses to behave in society.
However, there remains an ongoing debate about whether CSR is possible, given the inevitable tension between moral obligations and financial performance. Here are the types of corporate social responsibilities to be aware of.
Environmental Responsibility
Also known as environmental stewardship, environmental responsibility refers to corporations’ commitment to protecting the natural environment, minimizing waste and pollution, and ensuring that any environmental impacts are compensated.
This responsibility is driven by changing public opinion in developed countries, pushing companies toward cleaner or more “green” production methods. To achieve this, a company can be more mindful of its waste management strategies and look for favorable skip sales, size-appropriate bins, and recycling options.
Philanthropic Responsibility
Giving back to the communities in which a business operates is the second type of corporate social responsibility. Philanthropic responsibility requires a company to invest some of its resources or goods and services to improve society without expecting any direct return on investment.
A corporation may prioritize one area of particular concern, such as child health care, due to its history with children or its connection with health care providers. To effectively achieve its philanthropic responsibility goals, a company should understand the community’s needs and match them with its marketing strategy.
Economic Responsibility
Economic responsibility aims to strike a balance between the company’s financial success and the economic prosperity of its employees, suppliers, customers, stakeholders, and the larger community. Businesses may take concerted action to improve the skills of their worker or supplier base by investing in education.
Empowering the community cushions the company from relying too heavily on a small number of employees and suppliers. Doing so could cause significant problems in the event of an economic downturn or business restructure. Companies can:
- Support the economic development of suppliers, customers, and smaller stakeholders within its community.
- Hold annual or bi-annual meetings with local stakeholders to discuss their business concerns and growth strategy.
- Launch initiatives that support the education and well-being of stakeholders like employees, consumers, and suppliers.
- Share regular updates about its ongoing impact and progress with stakeholders via email or other means.
Ethical Responsibility
Companies are obligated to operate ethically and fairly. It means that a company should work within an agreed framework of moral values and behaviors while adhering to the laws that govern its day-to-day operations.
A company can demonstrate ethical responsibility by improving its image with business partners, customers, employees, suppliers, and other stakeholders through fair trade practices. To achieve this goal, companies should expect to offer the same ethical treatment they would like to receive.
There is no one single way to achieve social responsibility making it very personal for each business. However, there are some general guidelines that every company should be aware of when balancing its stakeholder responsibilities. Doing so ensures that the company’s interests are protected while also upholding its ethical obligations to society.
