Corporate social responsibility (CSR) has been a frequent buzz word in the corporate world for a while now. The concern about social impact by businesses can be traced back to the 1930s, but what really propelled it to the modern era of CSR is a book written in the 1950s by Howard R. Brown, “Social Responsibilities of a Businessman”. So, it has been more than 60 years and we have seen many companies, big and small, jumping on the bandwagon implementing CSR initiatives in many different forms.
Exploring Corporate Social Responsibility
Rise of Ethical Consumerism
Although one might argue that no spending or business decision is based on morals alone, however, over the last 20 to 30 years, corporates have also observed that business and buying based on some form of ethical and morality is on the rise. This can be seen in consumer expectations, for example, wanting to only consume chicken that are killed humanely, drive vehicles that does not pollute the environment, or deal with corporates that only practice fair-trade. This has resulted in corporates changing business processes, developing different products to meet this evolving ethical demand of consumers through CSR initiatives.
What exactly is Corporate Social Responsibility?
Investopedia defines it as “a corporation’s initiatives to assess and take responsibility for the company’s effects on environmental and social wellbeing”, financial times defines it as, “A business approach that contributes to sustainable development by delivering economics, social and environmental benefits for all stakeholders”. While it is defined as “Ethical principle that an organisation should be responsible for how its behaviour might affect society and the environment” in Wikipedia.
It is clear that CSR is a broad term describing corporates’ attempt to align themselves through initiatives such as philanthropic activities, community volunteering, promotion of some cause, or changing the way they do business, to positively and sustainably impact on the environment and society whilst creating economic benefits.
What is the difference between Charity and CSR?
To most people, Charity and CSR is the same and this essentially is because the intent of doing good is the same, however, there are stark differences between them. Charity can be defined as a generous act or donation to aid beneficiaries without the expectations of any benefits in return. According to Tohpr.com, they summarised the difference of CSR vs Charity as follow,
CSR is seen to be an initiative that promotes sustainable changes or impact to the beneficiaries (including the donor, through continuous involvement and interaction with the recipient) whereas charity benefits the beneficiaries within a finite time with finite resources. There is an old Navajo saying that you give a man a fish, you will feed him a day, but if you teach him how to fish, you feed him a lifetime. So which approach are you taking?
Telvin Goh, Senior Sales Manager