Everyone seems to be talking about CSR, but what is it and do I need a policy for it?
What is it?
Harvard Business School describes Corporate Social Responsibility (CSR) as “a business model in which for-profit companies seek ways to create social and environmental benefits while pursuing organizational goals, like revenue growth and maximizing shareholder value.” It represents a shift away from a pure-profit focus and towards social accountability.
Do I need a policy for it?
The answer is both No and Yes. No, because inherent in CSR is a commitment to the concept and the cause, not just having a policy that gets added to your website and forgotten about, or is only used as part of a ‘greenwashing’ exercise.
Yes, because businesses cannot afford to ignore CSR. Operating in a sustainable and ethical way is a good thing, of course, for the planet and perhaps morally too.
Business benefits of CSR
Committing to CSR doesn’t have to be an entirely altruistic decision. Research has found that businesses with strong commitments to CSR have increased customer loyalty and better employee engagement (and therefore retention). Being socially responsible can also strengthen a business’s brand, helping to attract new investment opportunities.
An EY survey in early 2023 found that 76% of companies with strong sustainability governance were optimistic about their financial performance compared to just 45% of companies with weaker controls in place.
Another 2023 survey, this one by YouGov on behalf of Deloitte found that a third (34%) of consumers stated that their trust in brands would be improved if they were recognised as an ethical/sustainable provider by an independent third party. A similar proportion (32%) claimed that their trust in brands would be improved if they had a transparent, accountable, and socially and environmentally responsible supply chain.
What sort of things does a CSR policy cover?
It isn’t just a question of using a precedent. The areas a CSR policy focuses on will vary from business to business. Management should ensure that stakeholders, particularly employees, are involved in the process of setting the principles that underlie the business’s approach to CSR.
The policy could include goals such as reducing the environmental impact of the business, supporting diversity, fairness and equal opportunities for employees, dealing only with suppliers who have the same high professional and ethical standards, and engaging with the community.
Any policy should be kept under review to ensure that it still reflects the aims and ethos of the business.
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