The essential guide to corporate social responsibility

Many businesses recognize the importance of corporate social responsibility (CSR) yet need help to implement it effectively. The solution lies in pinpointing and adopting strategic, authentic practices that align with your company’s core values.

In this article, you’ll learn why CSR can be so powerful for brands and five steps to start reaping its rewards.

What is corporate social responsibility (CSR)?

Corporate social responsibility (CSR) is when businesses take steps to positively impact society beyond just making a profit. It’s a business model that includes acting ethically, supporting communities and protecting the environment.

For example, an energy company may implement CSR by:

• Installing solar panels on all office buildings

• Planting a tree for every new customer

• Donating 5% of annual profits to fund programs that teach about renewable energy and sustainability

CSR ties into the “triple bottom line” theory: profit, people and the planet. The theory states companies should focus as much on social issues and environmental performance as they do on profits.

The triple bottom line measures a company’s success through its profitability as well as its commitment to sustainable development and social responsibility programs.

Corporate social responsibility meaning vs. environmental, social and governance

CSR and ESG are abbreviations often used interchangeably. However, the terms refer to two related yet different concepts.

• Corporate social responsibility (CSR) focuses on a company’s voluntary efforts to positively impact society

• Environmental, social and governance (ESG) is a set of specific criteria investors use to evaluate a company’s long-term sustainability and ethical impact

Here’s how the two compare:

CSR is more about internal values and practices, while ESG is a financially driven external evaluation.

4 types of corporate social responsibility

Business owners and companies can engage in different types of CSR, depending on their industry, mission and values.

Here are the four main types of corporate social responsibility.

1. Environmental responsibility

Environmental responsibility, sometimes known as “environmental stewardship”, refers to companies’ actions to reduce their environmental impact. For example, a clothing company may switch to using recycled product materials and powering its factories with renewable energy.

Retailer Patagonia is a leader in environmental responsibility, donating 1% of its profits to preserving the natural environment.

It now runs a “1% for the Planet” alliance of businesses that pledge the same.

Other sample environmental measures may include:

• Introducing initiatives to reduce your carbon footprint (e.g., cutting down greenhouse gas emissions in your supply chain)

• Designing products for durability to extend their lifecycle and reduce waste

• Implementing waste reduction programs (e.g., recycling or composting) to minimize landfill contributions

Businesses engage in environmental responsibility to protect natural resources and benefit the planet for future generations.

2. Ethical responsibility

Ethical responsibility occurs when companies adopt fair and moral business practices for their employees, customers and suppliers. For example, a food company may source all ingredients from farms that treat animals humanely.

Tech company IBM acts ethically by publishing and adhering to its guiding principles for generative AI.

Its principles state that the technology should benefit wider society, client data belongs to the client and AI training must always be transparent.

Other forms of ethical behavior can include:

• Ensuring safe working conditions and well-being for workers

• Only working with suppliers who are committed to human rights and fair trade

• Implementing non-discriminatory practices in hiring and promotions

In addition to boosting companies’ reputations with employees (by making them enticing places to work), these practices also build customer trust with people who consider these factors when choosing brands to buy from.

3. Philanthropic responsibility

Philanthropic responsibility is when companies donate resources or time to help communities and causes. For example, a financial firm may run free education programs in underprivileged areas.

UK energy company Octopus has donated £1.5 million to nonprofits since setting up its Octopus Giving foundation.

In addition, Octopus encourages employees to volunteer and matches their fundraising efforts up to £500.

Other examples of philanthropic activities can include:

• Offering scholarships or grants to local communities

• Donating a portion of profits to nonprofit organizations

• Helping out at or fundraising for community service projects

Philanthropic companies show that they’re compassionate, which can encourage more community support through direct sales and word-of-mouth marketing.

Communities often support local brands that prioritize societal well-being. These companies tend to align with their values and contribute to causes that matter to them.

4. Economic responsibility

Economic responsibility requires companies to invest responsibly and pay their employees fair wages. For example, a manufacturing company may offer its team competitive salaries and extra work benefits (e.g., half-day Fridays).

Engineering company Bosch’s “circular economy” strategy is another example of economic responsibility. The strategy aims to enhance the sustainability of its products across their entire lifecycle.

Giving products a second life and then recycling demonstrates to stakeholders that Bosch is using resources wisely while keeping prices down for consumers.

Other economic activities that benefit the wider community can include:

• Supporting local small businesses through partnerships and sponsorships

• Funding community development projects (e.g., parks or libraries)

• Reinvesting some profits into local infrastructure

Economic responsibility ensures long-term sustainability for businesses and contributes to keeping the broader economy stable.

What are the data-backed benefits of CSR?

CSR activities don’t just look good on paper. They have tangible advantages for your corporate culture and bottom line.

Here are four data-backed benefits of corporate social responsibility for companies.

1. Improve your brand reputation and build trust

CSR can impact how people perceive companies when they commit to ethical and sustainable practices.

According to Deloitte research, a third of consumers trust brands recognized as ethical or sustainable providers more than those that are not.

A strong, trustworthy reputation can differentiate your brand from your competitors to attract customers and encourage them to stay longer.

2. Attract and retain top talent

Socially responsible initiatives can make your company more appealing to top performers who share the same values.

Edelman reports that “societal impact” is a strong expectation (and even a dealbreaker at times) for almost 70% of prospective hires.

Employees are more likely to join and stay with companies that align with their personal values, increasing retention rates and reducing turnover.

3. Reduce costs with sustainable business practices

Implementing long-term CSR practices (e.g., reducing waste or energy use) lowers operational costs. Saving this money can improve profitability over time while also benefiting the environment.

According to one academic paper, CSR also reduces systematic risk (e.g., economic downturns or regulatory changes) and increases company valuations.

In other words, engaging in responsible and ethical practices can help companies become more resilient to external risks and make them safer investments.

4. Drive more sales

CSR initiatives appeal to the growing market of socially conscious shoppers. According to a joint study from McKinsey and NielsenIQ, consumers spend more on products that claim to be environmentally and socially responsible.

As consumers look for more sustainable brands to shop with, you can highlight your CSR program to encourage higher sales and revenue.

5 steps to become a more socially responsible business

Developing a CSR strategy won’t happen overnight, but taking deliberate actions can set you on the right path.

Here are five steps to becoming a more socially responsible company.

1. Ask customers, employees and stakeholders what’s important to them

When creating CSR initiatives, involve those crucial to your business to ensure the initiatives meet real needs and that people care about them.

For example, eight out of 10 shoppers want to buy environmentally sustainable products. However, they also want brands to make these “greener” choices more available and cost-effective.

While you may think you know what’s important to your stakeholders, it’s a good idea to ask so you don’t spend money on initiatives that don’t resonate or fail to make a meaningful impact.

Collect feedback about the types of initiatives your stakeholders value by:

• Creating and sending out surveys

• Holding focus groups

• Arranging internal group meetings

• Conducting one-on-one interviews

Gathering input directly from those who matter ensures your efforts align with their values and expectations. Taking these assurances, you can expect more substantial support and significant success over time.

2. Set clear CSR goals that align with your company’s values

Clear goals provide direction and keep everyone on the same page. Choose measurable objectives that are relevant to your mission and achievable. Track progress, assess impact and use your findings to make data-driven decisions.

For example, your CSR goals may include:

• Reducing carbon emissions by 25% over the next five years

• Increasing the use of recycled materials in products by 30%

• Contributing 1% of annual profits to community development projects

• Achieving 100% renewable energy usage in all company facilities by 2030

Once you have your goals, choose metrics that align with them to measure progress.

For example, you may use these metrics for the above goals:

Remember to note your benchmarks (starting numbers) to accurately measure your positive or negative impact as you progress.

3. Gather the appropriate tools to set and track CSR initiatives

Now you’ve got your metrics and benchmarks, you need appropriate software to track your journey to improving them. Your company’s tech stack will vary depending on your business’s size, industry and CSR goals.

For example, you may use a customer relationship management (CRM) tool like Pipedrive to store data on customer interactions, feedback and preferences regarding CSR initiatives.

Keeping all this information in one place makes it easier to see patterns and measure the impact of your efforts.

When everything is organized, your team can work together more effectively and make better decisions. Clear data also demonstrates you’re being transparent when reporting progress to stakeholders.

Here are five more examples of CSR software you can use to implement your strategy:

• Project management software can help you coordinate and monitor individual CSR projects (e.g., Forecast or ClickUp)

• Sustainability reporting tools can help you measure and report on environmental impact (e.g., Persefoni or Ecometrica)

• Supply chain management tools can help you ensure ethical sourcing (e.g., SAP Ariba or Oracle SCM)

• Corporate purpose platforms can help you organize volunteer programs and donation collections (e.g., Benevity or YourCause)

• Data analytics tools can help you analyze performance data from CSR initiatives and visualize progress (e.g., Tableau or Power BI)

You can also use integrations or an API to connect your CRM system to different tools, allowing you to run a comprehensive CSR strategy from fewer dashboards.

4. Be transparent about your journey

A crucial part of CSR involves communicating openly about your efforts and progress. When doing so, it’s just as important to detail mistakes and what you’re working to improve alongside successes.

Transparency builds trust with stakeholders. Being honest demonstrates that your company is genuinely committed to making a positive impact rather than only seeking good publicity.

For example, healthcare company Johnson & Johnson regularly publishes CSR-related reports on its efforts and impacts across society.

Despite being a big pharma company, Johnson & Johnson has focused on reducing its impact on the planet for decades.

Aside from dedicated CSR reports, here are four practical ways to be transparent about your corporate sustainability journey:

• Use social media and blogs to provide real-time updates

• Create case studies of projects you undertake

• Arrange Q&A sessions or public forums to engage in open dialogue with anyone who’s interested

• Acknowledge failures publicly and explain the steps you’re taking to improve

Consistently communicating your CSR efforts doesn’t only strengthen your reputation. It also helps you build deeper connections with customers, employees and the wider community, who will appreciate your ongoing commitment to making a difference.

5. Integrate new values into your company culture

To have a positive impact, social responsibility must become an integrated part of business operations (not just an occasional activity).

When your CSR efforts align with your long-term mission and goals, it’s easier to sustain them and consider them during decision-making.

Here are a few ways you can integrate your new CSR values into your company:

• Train employees on how to apply CSR values in their roles

• Ensure business leaders and management consistently demonstrate these values in their actions and decisions

• Recognize and reward employees who embody your company’s values

• Embed CSR goals into performance reviews to align employees with your mission

• Creating committees or initiatives to encourage employee engagement and involvement

Over time, you can bake these values into your mission statement, core principles and company culture. Only when you’re at this level of CSR commitment should you highlight them when hiring.

Honestly integrating social responsibility into your operations builds trust and strengthens your brand. Showing true commitment to your values can also prevent your company from being labeled as “greenwashing”.

4 examples of B2B companies that engage in CSR

Business-to-consumer (B2C) companies like Unilever and Starbucks are known for their CSR efforts. However, many business-to-business (B2B) brands also commit to positively impacting climate change and corporate citizenship.

Here are four corporate social responsibility examples from B2B companies.

1. Pipedrive

Sales software platform Pipedrive is a founding partner of the “Green Tiger Initiative”, a collaboration platform that aims to boost environmental awareness in the technology sector and grow a “green economy”.

For example, Pipedrive uses Small Business Week to showcase small businesses and entrepreneurs driving innovation through sustainable business practices.

Here, Pipedrive introduces innovative construction solutions provider Bao Living.

This commitment has become more critical to Pipedrive as it has evolved. According to Pipedrive’s co-CEO and CTO Sergei Anikin:

Pipedrive also follows an ethical Code of Conduct that details safe supply chain working conditions, respect for all employees and environmentally responsible operations.

2. Accenture

Tech and business service supplier Accenture sets out clear, measurable objectives in environmental sustainability, talent development and social impact.

For 17 years, it has been one of Ethisphere’s “World’s Most Ethical Companies”. It achieves this by reducing its carbon footprint, sourcing responsibly and maintaining ethical business practices.

For example, every employee, business and third party acting on Accenture’s behalf must comply with its Code of Business Ethics.

In addition, its “Skills to Succeed” initiative helps millions get jobs while the development partnerships drive social innovation and support global challenges.

The company also promotes equality, helps communities and refugees in crisis and contributes to the United Nations’ Sustainable Development Goals (SDGs).

3. 3M

Safety goods and equipment supplier 3M aims to reduce environmental impact through innovative products, responsible manufacturing and more efficient energy.

The company breaks down its strategic goals into three areas that anyone can view and track: Science for Circular (solutions that do more with less material), Science for Climate and Science for Community.

For example, here are four of the Science for Climate goals.

These objectives keep the company accountable and help build trust with consumers who see all its good work.

3M also invests in STEM (science, technology, engineering and mathematics) education and supports local communities with its commitment to donate $50 million over five years.

4. Adobe

Adobe is a multimedia software company whose CSR initiatives focus on supporting creators of all ages and backgrounds. In particular, its educational programs and tools aim to make digital experiences more accessible.

Here are three of its Creativity for All programs for creators and filmmakers.

Adobe is also committed to reducing its environmental footprint by implementing sustainable operational and product practices. For example, over 80% of its global office space has a green building certification.

The company also ensures all new AI features comply with accountability, responsibility and transparency principles and fights misinformation in the digital age with its Content Authenticity Initiative (CAI).

Final thoughts

A strong CSR strategy begins with clear goals that align with your company’s mission and customers’ values. After that, you need a seamless tech stack to make achieving those goals possible.

Consider CRM software like Pipedrive, which integrates hundreds of third-party apps and tools to streamline your CSR initiatives. Try it free for 14 days to manage stakeholder relationships, track progress and stay transparent with your data.