What is CSR?

Learn more about the 4 categories of Corporate social responsibility: environmental, philanthropic, ethical, and economic
December 19, 2022
4 minutes

What is CSR?

CSR, or Corporate Social Responsibility, is the integration of socially beneficial programs and practices into a corporation's business model and culture. An effective CSR strategy can help businesses be conscious of the kind of impact they are having on all aspects of society, including economic, social, and environmental. CSR is an umbrella term that involves a broad scope of approaches and initiatives –ranging from philanthropy and community involvement to operational changes.

But in order to find the best practices and advanced methods of measuring the impact of sustainability policies within the organization, the company first needs to be accountable to itself and its shareholders.


What Are The Different Types Of CSR?

There are four main types of corporate social responsibility, however, even though most companies get involved in all 4, the lack of involvement in a specific area does not necessarily mean that a business isn’t socially responsible.

1- Environmental Responsibility

Environmental CSR initiatives are implemented to ensure that the actions of the business have positive social or environmental impacts on the wider community. This includes reducing pollution, waste, and natural resource consumption as well as minimizing emissions through its manufacturing process. From recycling goods and materials to finding alternative ways to distribute products consciously, environmental CSR initiatives focus on improving business efficiency or performance. Companies also often go as far as offsetting negative impacts and reducing your carbon footprint.


2- Ethical responsibility

The demand for transparency is now bigger than ever. That’s exactly why most eco-conscious companies put much emphasis on their ethical responsibility initiatives. From ensuring Fair treatment of all clients no matter their gender age or identity to going out of their way to deal with diverse, local, and socially responsible suppliers and partners, there are many ways for businesses to act in a fair, ethical manner.

It’s also very important to check and verify the positive treatment of all employees and improve workplace diversity, equity, and inclusion, on top of monitoring the health and safety standards within the operation. That’s the most important reason why socially responsible companies develop a code of ethics that clearly showcases their values and eliminates all forms of harassment and mistreatment.

3- Philanthropic Responsibility

These initiatives showcase the way a business contributes to society. There are many ways to help make the world a better place. Companies can donate time and/or money to causes that reflect their values and support employees and the community. This can take the form of charity donations, fundraisers, and more.


4- Financial Responsibility

This is where all the 3 aforementioned initiatives are tied together. Businesses that want to implement environmental, ethical, and philanthropical CSR strategies, have a duty to back up their claims through investments. Whether it’s financial donations, product research, employee training as well as transparent and timely financial reporting.


The Benefits Of Corporate Social Responsibility 

CSR activities can help create stronger relationships between the company and its employees, boost morale, and shape the way clients perceive the organization. As a company engages more in CSR, they are more likely to receive favorable brand recognition which will increase sales and customer loyalty.

For businesses that want to gain a competitive advantage, the implementation of CSR strategies can shape the way investors feel about an organization and how they view the worth of the company. In other words, it will increase investment opportunities.

By cutting down waste and managing resources efficiently, companies can save operational costs and overall have a better financial performance which leads to organisational growth.


Ultimately, Corporate Social Responsibility will not only help make the world a better place, it also gives your business a competitive edge, helps retain customers, saves money, and fosters long-lasting relationships in the process. Ideally you should define your goals, plan your efforts upfront and choose projects that align with your company’s values, as well as those of your stakeholders and community.