CSR stands for Corporate Social Responsibility. It is a concept that companies work with to contribute to a better society. This is done by working with social and environmental responsibilities. More so, it is common that this type of work is in, or in relation to, a developing nation. Generally, this is also were these issues are the most visible.
CSR springs from the idea that a company should take responsibility. This is reflected in social and environmental initiatives, as well economic ones. Therefore, one can split up the responsibilities in 3 parts: financial-, environmental- and social. Today, these parts align perfectly with the sustainability goals of the UN (the so called SDGs). Partly due to this, CSR has become a normalized and somewhat expected part of any sustainable business.
Another important dimension of CSR is the ethical responsibility. Other examples are human rights, labor rights and corruption. When a company works actively with some of the mentioned parts, they are addressing their Corporate Social Responsibilities. In other words, they are developing their business models to align with a more sustainable world.
As mentioned, there are 3 main parts of CSR: social, environmental and economic responsibility. The social responsibility tackles the sometimes negative effects that a company can have on people. There are various international agreements and conventions that guide this work. Two examples are the Universal Declaration of Human Rights and the ILOs agreements on employee rights.
The environmental responsibility regards how a company works with the environment. For instance, a goal could be to reassure that the business has as little impact on the environment as possible. This can be achieved by reducing the greenhouse gas emissions. Another aspect considers the ability to avoid hazardous chemicals in any kind of production. Or reviewing every section of a products transportation. Since transport contributes to high emissions as well.
The financial responsibility is about the company’s way of doing business. Naturally, it is crucial for the business to be profitable to enable social and environmental responsibility. Corruption is a common issue within this subject.
Other relevant facts
For more information, larger companies, such as TNCs (transnational companies), tend to offer official CSR reports on their websites. This is to enable customers an insight into their business. For example, Oatly released a report in 2019.
Finally, CSR is voluntary is most nations. The best known exception is India, were CSR is a mandatory part of all larger companies. This was established in 2014 and means that larger companies are required to spend 2 % of their income on Corporate Social Responsibility.