Newsroom / Career / Why should you care about corporate social responsibility?

Why should you care about corporate social responsibility?

February 16, 2021 · 2 min read · By ASU CareerCatalyst

As an entrepreneur, profits should no longer be your sole focus. Socially responsible companies and business leaders care about making a positive impact on society and the environment. Lecturer Brent Scholar and Assistant Professor Elizabeth Castillo at Arizona State University’s College of Integrative Sciences and Arts share their expert opinions on corporate social responsibility in today’s modern business landscape.

What is the definition of corporate social responsibility (CSR)?

Corporate social responsibility, also known as corporate citizenship, corporate responsibility or responsible business, is an ethically oriented business model whereby organizations self-regulate operations to have a positive impact on economic, environmental and social factors. Socially conscious and ethical business practices focus on benefitting the firm, its stakeholders and the local community.

The practice of corporate social responsibility enables business leaders and companies to take ownership of the positive or negative effects of their operations on customers, suppliers, employees, shareholders, communities and the environment. Basically, organizational strategies and outcomes should strive to have a positive impact on society as a whole.

“The purpose of corporate social responsibility is two-fold: to create sustainable long-term value for the firm and its stakeholders and to strengthen the systems in which the firm is embedded,” said Elizabeth Castillo, an instructor of online ethics and corporate responsibility courses in ASU Continuing and Professional Education and assistant professor in the College of Integrative Sciences and Arts.

Castillo believes corporate social responsibility reduces systemic risk by creating shared patterns of moral behavior and trustworthiness. This helps make ongoing commercial exchange viable.

What are the social responsibilities of a business?

All businesses require a social license to operate. The social licence confirms the business will obey laws, pay taxes and create value for customers and the community in which the business resides.

“The social responsibilities of a business are to engage respectfully with its multiple stakeholders and to produce goods and services that create perpetual value for these stakeholders,” said Castillo.

According to Brent Scholar, an instructor of online social responsibility business courses in ASU Continuing and Professional Education and lecturer in the College of Integrative Sciences and Arts, corporate social responsibilities typically fall in one of four different categories. These include economic responsibility, environmental sustainability, ethical business practices and philanthropy.

Economic responsibility:

While earning profits is one of the most fundamental responsibilities of a business, organizational leaders have to find ways to maximize their profitability to create economic value. Economic responsibility challenges business owners to improve operations and generate revenue to progress the economy for clients, stakeholders and society as a whole.

An example of a win-win scenario for a business and society includes modernizing manufacturing processes with recycled materials to lower costs incurred during the production process while benefitting society by consuming fewer resources.

Environmental sustainability:

The health of the environment is a priority in the corporate social responsibility framework. As such, businesses need to make environmentally conscious investments and decisions.

An example of an environmental sustainability initiative is focusing on conservation and sustainability, such as mitigating climate change by reducing your corporate carbon footprint. Since most businesses have a large carbon footprint, any efforts to reduce the harmful impacts to the environment are considered a benefit for the business and society.

Ethical business practices:

Business ethics play an important role in the practice of corporate social responsibility. Ethical business practices serve as the lighthouse for moral behavior. They promote trust, respect and cooperation while guiding how a business treats employees, society and the environment.

Examples of ethical business practices include delivering what is promised through marketing efforts, maintaining a high level of integrity, obeying laws and treating everyone with respect.

Philanthropy:

Businesses can demonstrate corporate social responsibility by embracing philanthropy and volunteering in the local community. Whether donating money to a social cause or participating in a team-building volunteer project, businesses of all sizes have the resources to benefit non-profit organizations and local community programs.

“A socially responsible business also tracks and transparently reports its performance and impacts using multiple indicators, such as those used by Benefit Corporations in the areas of governance, workers, community and environment,” said Castillo. “Social accounting frameworks such as Integrated Reporting are also helpful for demonstrating accountability and developing socially responsible business strategies.”

Why should businesses care about corporate responsibility?

According to Scholar, businesses should care about ethics and corporate social responsibility because there is more to business than earning a profit.

“By following a code of ethics and creating a positive impact on society through best business practices, organizations can create a legacy that does good for all and not just for a few,” said Scholar. “For more information on creating ethical and socially responsible organizations, please contact your local Conscious Capitalism chapter.”

Castillo adds many studies have found a strong association between a business’ socially responsible behavior and its long-term performance. As such, corporate social responsibility is increasingly recognized as a very effective business strategy.

“Investors are beginning to recognize corporate social responsibility, leading to their growing call for Environment, Social and Governance criteria and reporting on a company’s operations,” said Castillo. “By explicitly using ethical behavior and corporate citizenship as foundations and drivers of strategy, businesses can ensure their ongoing relevance and value creation capacity.”

Develop the skills to succeed at every career stage.

You’re one step closer to leaving your footprint on the world. Request information today and we will be in touch with you shortly.

First name

Last name

Phone number

Area of Interest

Select an area of interest

By completing and submitting your information to ASU, you consent to:

ASU using this information to contact you regarding information as you requested and send information about degree programs, scholarships, opportunities, events, and admission through email, direct mail, SMS/texting and digital platforms. You can unsubscribe at any time by clicking the unsubscribe link at the bottom of any email or by contacting careercatalyst@asu.edu.
The terms of ASU's Privacy Statement.
If you are in the European Union or another country or state that has adopted the GDPR (General Data Protection Regulation) or similar privacy protection, please also read the ASU European Supplement to ASU's Privacy Statement.