What is Corporate Social Responsibility?

Corporate social responsibility, often abbreviated "CSR," is a corporation's initiatives to assess and take responsibility for the company's effects on environmental and social wellbeing. The term generally applies to efforts that go beyond what may be required by regulators or environmental protection groups.CSR may also be referred to as "corporate citizenship" and can involve incurring short-term costs that do not provide an immediate financial benefit to the company, but instead promote positive social and environmental change.

There are a few broad categories of social responsibility that many of today's businesses are practicing:

Environmental efforts: One primary focus of corporate social responsibility is the environment. Businesses regardless of size have a large carbon footprint. Any steps they can take to reduce those footprints are considered both good for the company and society as a whole. Philanthropy: Businesses also practice social responsibility by donating to national and local charities. Businesses have a lot of resources that can benefit charities and local community programs. Ethical labor practices: By treating employees fairly and ethically, companies can also demonstrate their corporate social responsibility. This is especially true of businesses that operate in international locations with labor laws that differ from those in the United States. Volunteering: Attending volunteer events says a lot about a company's sincerity. By doing good deeds without expecting anything in return, companies are able to express their concern for specific issues and support for certain organizations.

Corporations can have enormously detrimental effects on the environment. Oil spills are some of the most conspicuous examples, but industries as varied as chemical manufacturing, mining, agriculture and fishing can do permanent damage to local ecosystems. Climate change can also be attributed in large part to corporations. While their responsibility is hard to untangle from that of the consumers who demand electricity and transportation, it is difficult to deny that many corporations have profited from the deterioration of the global environment. In light of this often dark legacy, some areas of corporate culture have begun to embrace a philosophy that balances the pursuit of profit with a commitment to ethical conduct. Google Inc's (GOOG) slogan sums up the idea of corporate social responsibility nicely: "Don't be evil." The same money and influence that enable large companies to inflict damage on people and the environment allows them to effect positive change. At its simplest, a corporation can give money to charity. Companies can also use their influence to pressure governments and other companies to treat people and resources more ethically. Companies can invest in local communities in order to offset the negative impact their operations might have. A natural resources firm that begins to operate in a poor community might build a school, offer medical services or improve irrigation and sanitation equipment. Similarly, a company might invest in research and development in sustainable technologies, even though the project might not immediately lead to increased profitability.

Some think corporate social responsibility is an oxymoron. Others see corporate social responsibility as a distraction of a different sort, that is, from the lawful pursuit of profits. To them, a corporation's sole responsibility is to generate returns for its shareholders, not to try to save the world or to fret over its own impact. Laws and regulations must be followed in all jurisdictions in which the company operates, but management should not go beyond that, as that could hurt its bottom line and violate its duties to the owners. Some counter that this concerned is misplaced, since responsible initiatives can increase brand loyalty and therefore profits. This may become increasingly true as ethical consumer culture gains wider acceptance.

In order to account for the importance of social and ecological considerations in doing business, some organizations advocate the concept of the "triple bottom line": social, environmental and economic – or "people, planet, profit." In 2010, the International Organization for Standardization released ISO 26000, a set of voluntary standards meant to help companies implement corporate social responsibility.

Main goals of businesses are to maximize profit and minimize cost, but we shouldn't focus in here directly. we must also consider the customers and the environment. through corporate social responsibility (csr), we can build a good image for our company that is one way to attract new customers and retain present customers.


Source of some info : http://www.investopedia.com/terms/c/corp-social-responsibility.asp