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Corporate social responsibility or CSR is the implementation of strategies and initiatives to benefit society by reducing the negative impact of businesses on society, the environment, and their stakeholders.
There are five types of CSR.
Environmental CSR
It works towards the health of the planet, the natural resources that make it up, and how they are used by humans.
Social CSR
It contributes to the well-being of society by creating social goods and services that enhance the quality of life for individuals across all demographics.
Economic CSR
It focuses on improving the financial health of the company by creating financial products and services that directly benefit the company’s shareholders.
Public Benefit CSR
Companies that integrate public benefit into their CSR strategies focus on the creation of social goods and services that have a direct and immediate impact on society.
Public Good CSR
It initiates focus on the creation of public goods and services that benefit society as a whole.
With the digital transformation continuing to accelerate, companies are increasingly turning to the concept of corporate social responsibility (CSR) to drive change and adopt new practices in their operations which goes on to show that businesses cannot be mere revenue generation models. They ought to have conscience.
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CSR was initially motivated solely by the idea of philanthropy, because of which a number of businesses refused to take it seriously. They would often limit themselves to one-time financial grants and then would refuse to commit themselves to other issues. Furthermore, stakeholders were never taken into consideration.
From 1950 to 1980, CSR witnessed a dramatic turn of events. Businesses seemed to understand the philosophy and intention behind the initiative and have taken a more progressive approach towards it. In the post industrialization era (from 1980s), CSR has been implemented successfully.
In recent times, businesses work on assigning a separate department for CSR. It is made sure that the panel is diverse. Unlike earlier times, the focus isn’t on maximising profits but on utilising them. Businesses invest in a range of programs such as healthcare, sanitation, education, etc
Like the dynamic management trends, there have been changes in CSR strategies as well. CSR is no more related to just philanthropic activities. On the contrary, it is seen as an individual social responsibility. Owing to this newly gained status, there is an active participation of the employees.
Furthermore, CSR makes a positive impact in creating a good brand name. It also helps in creating a positive image among the employees and the shareholders. In earlier times, CSR used to function under the Human Resources department; however, it is not the case anymore. These programs are self-driven now. It is said that conscious participation in CSR activities plays a major role in motivating employees and developing a feeling of satisfaction amidst them. Voluntary participation of employees also plays a major role in CSR. When an employee is engaged in CSR projects purely due to personal interest, significant improvements are made. On the contrary, it is advised to not force any employee to partake in CSR activities. The true essence of CSR lies in voluntary engagement of its employees.
Key elements of CSR
o Responsibility
Every business has a responsibility to contribute to the well-being of society. This responsibility extends beyond business operations and encompasses all stakeholders, especially the community in which it operates.
o Equity
Equity requires companies to consider the impact of their activities, the impact of the products or services they provide, and the impact of the financial returns on owners, employees, and customers.
o Transparency
Transparency drives a greater understanding of the business and its impact on stakeholders. Transparency also increases the ability of stakeholders to hold companies accountable for their actions.
o Collaboration
Collaboration between companies and stakeholders is imperative for the success of CSR strategies. Collaboration involves a willingness to share knowledge, experience, and resources.
CSR is no longer identified as a philanthropic program. It is identified as Individual Social Responsibility (ISR).
CSR used to be managed by the HR department earlier; however, a special department overlooks its activities now.
CSR helps in creating a good brand name and boosts confidence of the employees and shareholders.
Conclusion
CSR and blockchain are two emerging technologies having the potential to change the way companies conduct operations by making informed decisions and enabling organizations to make the most of the resources available.
As with any emerging technology, it is important to bring a paradigm shift in CSR implementation. That is, to bring in a more strategic and comprehensive approach to implementing CSR that addresses the opportunities as well as the challenges.
