Breaking Down the 4 Types of Corporate Social Responsibility | Pacific Oaks College

A business’s measure of success goes beyond the bottom line. In today’s world, how a company gives back to its community, positively impacts the environment, and acts for the greater good—not just a greater profit—is critical. That’s where the corporate social responsibility of a business comes in.

What is corporate responsibility? Corporate social responsibility, also known as CSR, is the concept that a business has a responsibility to do good. CSR means that a company should self-regulate its actions and be socially accountable to its customers, stakeholders, and the world at large. But what does this really mean in practice?

Read on to discover the four types of corporate social responsibility of business and how they look in action.

Environmental Responsibility

For companies committed to CSR, it’s important for businesses to engage in environmentally friendly practices. Corporations can be significant contributors to greenhouse gas emissions, pollution, waste, and natural resource depletion—but by committing to environmental responsibility, a business takes ownership over its impact on the environment.

Depending on a business’s size and industry, environmental responsibility can take many different forms. For some companies, it means using alternative energy sources and sustainable materials. For others, it means enacting a company-wide recycling program or donating to and volunteering for local environment-focused organizations.

Ethical Responsibility

Being ethically responsible means ensuring a business engages in fair business practices across the board—including treating all employees, stakeholders, and customers ethically and with respect.

This type of CSR can also take a lot of different forms. Some common examples of ethical responsibility include setting a higher minimum wage, guaranteeing all materials are ethically sourced, and ensuring that all employees receive competitive pay and comprehensive benefits as well as treated with respect.

Philanthropic Responsibility

In today’s world, it’s almost expected for businesses to give back to the communities they exist in and donate to causes that align with their company mission. When businesses do this, they’re following through with their philanthropic responsibility.

This philanthropic responsibility can be as small scale as sponsoring a local nonprofit’s annual fundraiser or as large-scale as donating a percentage of a business’s annual earnings to a prominent cause.

Economic Responsibility

When a business is acting with economic responsibility in mind, it is making financial decisions that prioritize doing good, not just making more money. This means that this type of CSR is intertwined with the other types above.

For example, this could mean that a business signs a contract with a supplier that uses sustainable materials—even if it costs more. Another example of economic responsibility is when a company commits to a transparent salary system that fairly compensates all employees and makes up for past gender and race pay gaps.

The Benefits of CSR

When a business commits to socially responsible practices, it positively impacts its employee satisfaction and retention. It’s also great for brand identity because CSR initiatives help bolster customer trust and public respect.

And, of course, the CSR initiatives themselves have a ripple effect of positive good. With every new sustainable business practice and every company committed to fair pay and ethical employee treatment, more positivity is brought into the world.

Here at Pacific Oaks, we believe that the measure of a successful business goes beyond the profit that it makes. If you’re interested in becoming a business leader that drives innovation and socially responsible missions, explore Pacific Oaks College’s B.S. in Business Administration or its M.A. in Organizational Leadership and Management programs. Learn more about our Leadership Scholarship available to students in these programs.

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