Definition: Corporate Social Responsibility

Corporate Social Responsibility

Definition: Corporate Social Responsibility

Understanding Corporate Social Responsibility (CSR) for Small and Medium Businesses


For many consumers, CSR, or corporate social responsibility, is a concept they associate mostly with big businesses, but it goes well beyond the ranks of the Fortune 500. Corporate social responsibility applies to small and medium-sized businesses as well. The EU defines CSR as, “a concept whereby companies integrate social and environmental concerns in their business operations and in their interactions with stakeholders on a voluntary basis. It is about enterprises deciding to go beyond the minimum legal requirements and obligations stemming from collective agreements in order to address societal needs.

What does that mean for SME (Small and Medium Enterprises) businesses, though? Actually, there are numerous considerations here. For instance, a small business might worry about sourcing from a large enterprise eventually revealed to be participating in something unethical or unsavory (such as unsafe labor conditions or child labor). Small businesses also need to worry about their carbon footprint. Environmental protection and responsibility were once “bonuses” for businesses, but today’s customers expect it, and if they don’t see it, they are likely to take their business elsewhere.

The drive to reduce resource consumption, source locally and be involved in sponsoring local events, charities and more should spur small business owners to improve their corporate social responsibility efforts. Small business owners have several advantages over larger companies here, including the fact that while enterprise-level organizations must answer to stakeholders and then consumers, the customer is the immediate stakeholder for a small company. That fosters significantly better transparency and, in turn, builds better loyalty.

CSR also encompasses a small business’s efforts to support the local area through sponsorship of local sports teams, involvement in local charitable events and a great deal more. If you’re not practicing good corporate social responsibility, your customers will notice, and that notice will come with ramifications.

Another simple way to define Corporate Social Responsibility is to think about a Triple Bottom Line (TPL), often know as People, Planet, Proft. This simple idea is based on the focus most (for profit) firms have on achieving a strong profit. New thinking tells us that that profit is only sustainable and appropriate if the firm also achieves a people and planet “profit”, meaning a positive contribution.

A good way to show your commitment to CSR is to use a carbon footprint calculator and share your carbon footprint. That is to show how you are achieving carbon neutrality. You can do the same with paper usage, care for water and many more things.



Photo by Benjamin Child on Unsplash

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