What does Corporate Social Responsibility Mean?
Social impact. Purpose-driven. Corporate social responsibility. These buzzwords are becoming more prevalent as more and more companies are incorporating these concepts but what do they actually mean?
According to Knowledge at Wharton High School, “Social impact is the effect an organization’s actions have on the well being of the community.” Edge, a sustainability consulting firm, describes purpose-driven businesses as those who “deliver services and products that align with their values; values that are usually linked to human or planetary betterment.” Purpose-driven companies have the mission of making a long-term, positive social impact.
Financial Times defines corporate social responsibility (CSR) as a “movement aimed at encouraging companies to be more aware of the impact of their business on the rest of society, including their own stakeholders and the environment” and a “business approach that contributes to sustainable development by delivering economic, social and environmental benefits for all stakeholders.”
In 2010, the International Organization for Standardization, an organization that develops international standards that support innovation and provide solutions to global challenges, published ISO 26000, a set of voluntary guidelines for CSR. The goal of ISO 26000 is to help any organization of any size behave in a more socially responsible way to thereby contribute more to sustainable environmental, social, and economic development.
ISO 26000 divides social responsibility into seven principles:
- Ethical behavior
- Respect for stakeholder interests
- Respect for the rule of law
- Respect for international norms of behavior
- Respect for human rights
It also defines seven core subjects and issues of social responsibility:
- Organizational governance
- Human rights
- Labor practices
- The environment
- Fair operating practices
- Consumer issues
- Community involvement & development
So far, more than 80 countries worldwide have adopted ISO 26000 as a national standard and more than 20 countries are in progress.
Is purpose the same as corporate social responsibility? Forbes contributor Dan Pontefract argues that the two concepts are different in that purpose is inclusive of CSR. CSR deals with sustainable development in daily operations. Purpose is what your organization or business stands for, but should include CSR strategies.