What are the four main types of corporate social responsibility?

CSR can be broken down into numerous types. The four key areas of responsibility to focus on are: environmental, ethical, philanthropic and economic. Let’s take a closer look at these.

1. Environmental responsibility: in light of growing environmental concerns, a commitment to the environment lies at the heart of many companies’ CSR strategies. Sustainable practices can be implemented at each step in the business, from supply chains to the point of sale or service. There are many ways you can achieve this, such as:

• reducing waste, pollution and the use of non-renewable resources in the manufacturing process
• reducing and/or offsetting carbon emissions
• implementing recycling programmes
• using renewable energy like solar power wherever possible
• taking advantage of government offerings like the Workplace Charging Scheme for electric vehicles
• cutting down on packaging and ensuring products are recyclable
• creating initiatives that encourage employees to choose sustainable transportation
• supporting environmental projects and charities

2. Ethical responsibility: this pillar refers to your commitment to making sure human rights are upheld at every stage of the supply chain and that employees and customers are treated fairly and equitably. Some ethical concerns you can focus on include:

• working toward supply chains that are transparent and free from exploitative or harmful practices
• aiming to provide fair pay and benefits for employees and liaising with suppliers to ensure that they are doing the same
• looking out for and addressing any wage or opportunity gaps that may affect different groups of employees
• offering transparent communication and open dialogue to employees, stakeholders and customers, especially when issues arise

3. Philanthropic responsibility: one way companies may show their commitment to the communities your company services and wider society is through philanthropic actions. This is typically done with financial actions like donations and sponsorships as well as raising awareness. Large companies often set up their own foundations or trusts as a way to give back. You can also involve employees and customers in your charitable efforts. For example, you could set up volunteering opportunities for employees or offer them extra leave days to do charitable work, and you can encourage customers to support relevant causes through donation-matching or micro-donations, like rounding up purchases. Your company can also speak out about causes it’s passionate about and let the public know where they can learn more or how they can assist.
4. Economic responsibility: this pillar encapsulates elements of the previous three; economic responsibility involves how your company uses its funds to follow through on its commitments to doing good. This could look like:

• investing in long-term solutions that drive sustainability and reduce your carbon footprint
• developing educational programmes for employees or the community
• allocating time and resources so recruitment follows consistent, role‑related processes in line with your organisation’s policies and current guidance
• funding local charities and sponsoring events or investing in start-ups

Economic responsibility extends to how your company handles its finances. This includes transparent and prompt financial reporting as well as basics like making sure employees are paid on time and can easily access their benefits when needed. Having systems in place to catch and resolve any errors or issues quickly is also advantageous.

What are some other types of corporate social responsibility?

In addition to the four key types we have explored, there are other areas in which you can make CSR commitments, particularly within the workplace.

1. A culture of education: Professional communication norms: leaders can set expectations for respectful, professional communication and constructive collaboration across teams. Some organisations share general learning resources or optional forums on effective teamwork and communication, consistent with company policies.
2. Employee wellbeing and engagement: wellbeing involves actively promoting a healthy work-life balance and creating a working environment where this is possible. This includes offering competitive benefits (and perhaps even extra perks), and for employees who work in the office, a welcoming and attractive workplace. Organisations can foster a culture of engagement by hosting events where employees can socialise and network and offering opportunities for learning and growth, like talks, seminars, team-building exercises and optional workshops or courses.

Benefits of corporate social responsibility

Alongside the benefits of operating in ways that align with ethical or sustainability goals, your company can reap many other benefits from CSR practices. Below are some key ones.

• Increase employee satisfaction and make your company more desirable to potential applicants
• Help retain existing customers and attract new ones who care about making conscious purchases, thereby increasing profits
• Garner positive press and greater media coverage
• Improve the company’s reputation and brand value
• Help build better relationships with stakeholders and investors and encourage further investment
• Reduce the likelihood of reputational or operational issues that could impact your company’s performance
• Encourage greater employee engagement and motivation, which can lead to better overall productivity
• Give you a competitive advantage and can help you stand out from similar companies, particularly in saturated markets

Challenges of corporate social responsibility

Ensuring that social responsibility goals are met is not always easy and can come with challenges and obstacles along the way. Some of these include:

• Lack of established frameworks: because CSR is so broad, it can be difficult to know where to begin or what steps to take along the way.
• Difficulty in getting everyone on board: from insufficient communication between teams to lack of employee enthusiasm, larger companies often struggle to ensure their CSR actions align with their goals. Meticulous planning and a culture where management remains open to and welcoming of feedback can help your company overcome this potential pitfall.
• Lack of public trust or negative media coverage: public reaction to different CSR initiatives can vary, and some may attract more scrutiny than others. This is often the result of a social landscape where topics such as environmental issues or social-impact initiatives can sometimes be perceived differently by audiences. Additionally, the public can be suspicious that a company’s aims are truly altruistic, often assuming that financial motivations trump values or integrity – this makes transparency a vital component of CSR strategies.
• In a similar domain to media controversy, companies who commit to certain initiatives can fall victim to boycotts or other protest behaviours. Although this is not yet very prevalent in the UK, there have been several recent examples in the USA. There, several well-known US brands have faced public pushback related to certain initiatives after launching certain customer-focused inclusion initiatives. Related: Twelve tips for employers on how to overcome communication barriers in the workplace

Examples of corporate social responsibility in action

There are many companies in the UK that provide strong examples of CSR, from public services to supermarkets, beloved chain eateries and more.

1. NatWest

NatWest bank is an enthusiastic participant in the global charity day known as Giving Tuesday, donating large sums of money annually to charities since the campaign’s inception in 2014. Employees and customers are encouraged to make donations, which the bank then matches in varying amounts. The company offers 14 charities to choose from, so participants can select the causes most meaningful to them.

2. Greggs

The pastry franchise, perhaps best known for its much-loved sausage rolls, runs a raft of philanthropic initiatives, many under its own Greggs Foundation. One such programme is the Greggs Breakfast Club, which helps feed disadvantaged school children. Greggs also launched The Greggs Plege in 2021 where they set out ten commitment to help make the world a better place.

3. Tesco

One of the UK’s largest supermarket chains, Tesco has made significant strides in CSR by reducing food waste, improving sustainable sourcing and the transparency of supply chains and supporting local communities through various initiatives. One example is their commitment to fighting food poverty by encouraging customers to buy products for people in need that can be donated in-store.

Corporate social responsibility represents a holistic approach to business that’s about bettering society while maintaining a competitive edge. By focusing on environmental, ethical, philanthropic and economic commitments and initiatives, you can contribute to improving key metrics like employee morale, customer satisfaction, brand image and profits.