The 4 Types of Corporate Social Responsibility Initiatives
It is a widely known fact that social responsibility is good for all businesses. While many organisations understand the basic aspects of social responsibility such as it being an optimal conduit to give back to society or to show their appreciation to their customers, ramping up their focus on this cause requires much more comprehension of what it encompasses. Being an extremely broad concept, each company has to implement it in their own unique way so that the company’s operations are optimised rather than impacted and the initiatives taken are indeed beneficial for society. This means taking the time to understand the underlying idea of corporate social responsibility (CSR) and the types of CSR is important.
What Exactly is Corporate Social Responsibility?
Before diving into each category of the various CSR initiatives that your business can take, what exactly does social responsibility in today’s world mean? CSR is one of the key ways that companies can demonstrate that they are acting in a socially responsible way and are taking things such as social and environmental impacts seriously. Expressed through initiatives such as donating to a worthy cause or not purchasing resources that lead to child labour, each of these strategies is highly dependent on an organisation’s overall business philosophy, values, and goals.
So, what are the four types of CSR for businesses and what do they look like in action?
1. Environmental Responsibility
As its name suggests, environmental responsibility is all about taking steps to keep the Earth safe by reducing pollution and mitigating the impact of climate change. This means that businesses should run their organisation in environmentally-friendly ways as much as possible. A company that embraces environmental responsibility does not only follow the 3Rs – Reduce, Reuse, and Recycle. Rather, being a part of causes such as planting trees, funding research, increasing the use of renewable energy or reducing water consumption are all things that businesses can do to take ownership of their impact on the environment. Of course, this depends on the size of the business and the industry. For smaller businesses, simple acts such as implementing a company-wide recycling programme often suffice.
2. Ethical Responsibility
In Indonesia, efforts have been taken to eliminate the worst forms of child labour. As a matter of fact, Indonesia has remained committed to eliminating all forms of child labour by 2022. But what does Indonesia’s fulfilment of its global development goal pledge have to do with CSR? This is where ethical responsibility comes into the picture. All about operating an organisation fairly and ethically, this type of CSR covers everything from providing staff with a higher minimum wage to not supporting child labour.
3. Philanthropic Responsibility
The next category of CSR is that of philanthropic responsibility which emphasises the importance of businesses actively seeking ways to make the world, society and the immediate community a better place. Therefore, in addition to acting ethically and in an environmentally-friendly way, organisations should also directly give back to the community. This could be sponsoring a non-profit organisation or hosting a fundraiser for a cause they believe in – whichever best aligns with their missions and visions.
4. Economic Responsibility
The last and final type of CSR is economic responsibility, which is all about making financial decisions based on what is best for the economy and not just boosting the bottom line of just their enterprise. While this can be a hard one to achieve and embrace fully, this type of CSR is often interwoven with the above-mentioned types of CSR. It can take on the simple form of fairly compensating employees instead of paying minimum wage just so that the business can maximise profits.
How They Look Like in Action
Be it environmental, philanthropic, economic, or ethical responsibility, whatever type of CSR venture a company attempts to take, embracing any of them is a win for both the business and the society. Taking charge and putting your foot into humanitarian projects such as making donations to ensure that communities get better access to medical care or closing gender pay gaps, will increase brand value. After all, proving to the public that the business is accountable and plans on effecting social change is a great way to stay at the forefront of any competitive landscape.
Investing in Corporate Social Responsibility Initiatives to Make an Impact
There are multiple ways for an organisation to establish a socially conscious image. Committing to specific socially responsible practices, whether they focus on one or all four types of CSR, will undoubtedly impact employee satisfaction, customer retention, and public respect.
Constantly thinking of bettering the future and helping communities in Indonesia, Gunung Prisma has CSR at the forefront of how the business is run. Adding to this, Liwa states “I believe that a successful business looks beyond how much profit is made and how many clients are acquired. In order to become a leader in any competitive industry, embarking on socially responsible missions and initiatives is a must. And that is exactly what I and Gunung Prisma have been doing to spark the much-needed change that we all yearn to see in the world today.”