“Corporate Social Responsibility”, abbreviated to “CSR”, is a term that originated in large companies but is relevant to companies of all sizes. The term is used to describe the social responsibility of companies towards society. Your company does not stand isolated in society, but is integrated into it. Therefore, society expects your company to take responsibility for the effects of its actions voluntarily and beyond legal requirements.
With an integrated concept, your company can not only assume this responsibility, but also communicate about it in a targeted manner. You position your company in its markets and in society not only through market performance, but also through how responsibly you treat natural resources including people, and our environment to deliver this market performance and how advantageously you communicate with groups interested in your company (stakeholders).
In practice, you can implement CSR with the following topics: Compliance with laws, safety standards and human rights, as well as fair payment for labor; sustainable use of natural resources, including in countries where there are no sharp legal regulations; and charitable and philanthropic commitment. CSR principles are already rooted in the guiding principle of the honorable merchant. But with globalization, companies are drawn towards some temptations that warrant a fresh, vigilant look at CSR.
CSR-compliant behavior can strengthen your image and reputation with your customers, your suppliers, your employees and the public. Making a commitment through a published CSR statement from your company can help to actually meet the claims. Many companies that are known for their CSR-compliant operations are preferred suppliers, find qualified employees more easily, can push through higher prices and thus benefit economically from their socially and environmentally compatible actions. Measures to consolidate corporate social responsibility can contribute to a positive image and promote the willingness of attractive companies in your environment to cooperate with your company. Through successful CSR measures, you can also strengthen the trust of commercial banks and investors in your brands and your company and positively influence the value of the company. You will make your company more attractive to shareholders and may be able to sell shares at a higher price.
However, also be aware that any action that does not comply with the voluntary commitment can call your credibility into question and damage your reputation. Pure CSR propaganda with no real background is likely to be exposed as “greenwashing.” The damage may then be greater than if you had never implemented CSR measures.
You may encounter CSR advocates who believe that companies that are CSR compliant should not make a profit because they are depriving their business partners, especially their suppliers and their customers, of that profit. However, this view is misleading. Rather, an important component of the CSR concept is that companies should be able to sustain themselves so as not to be a burden on the community. Profit is thus an essential requirement of CSR-compliant behavior.
The ISO 26000 standard “Guidance on Social Responsibility” can provide useful guidance on how to conduct business in a socially and environmentally responsible manner.