Corporate Social Responsibility (CSR) Fundamentals

Study Notes

Corporate Social Responsibility (CSR) refers to a company's voluntary efforts to improve societal and environmental well-being, beyond its legal obligations.
CSR has evolved from a focus on philanthropy to a strategic approach integrating social, environmental, and economic considerations into business operations.

Stakeholder Theory: Companies have a responsibility to consider the needs and interests of various stakeholders, including shareholders, employees, customers, suppliers, and the community.
Triple Bottom Line (TBL): A framework that assesses a company's performance based on three dimensions: social, environmental, and economic.
Shared Value: A concept that emphasizes the creation of economic value while addressing social and environmental challenges.

Enhanced Reputation: CSR initiatives can improve a company's reputation and brand image.
Risk Management: CSR helps companies mitigate risks associated with social and environmental issues.
Innovation and Competitiveness: CSR can drive innovation and increase competitiveness by identifying new business opportunities.

Philanthropy: Charitable donations, volunteer programs, and community outreach initiatives.
Environmental Sustainability: Efforts to reduce carbon footprint, energy consumption, and waste, as well as promote sustainable practices.
Diversity and Inclusion: Initiatives to promote diversity, equity, and inclusion in the workplace and supply chain.
Supply Chain Management: Ensuring responsible practices throughout the supply chain, including labor rights and fair trade.

Greenwashing: The practice of making false or misleading claims about a company's CSR efforts.
Cost and Resource Constraints: CSR initiatives may require significant investments, which can be a challenge for small or resource-constrained organizations.
Measuring CSR Impact: Difficulty in quantifying the effectiveness and impact of CSR initiatives.

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