Companies have the ability to do more than make a profit. They can implement sustainability practices, speak up against injustice, source materials responsibly, and act in an ethical manner consistent with being a good corporate citizen.
Because customers increasingly support brands that align with their values, corporate social responsibility (CSR) is becoming important for business performance. In 2020, 92% of the companies in the S&P 500 index published a sustainability report—a huge leap from 20% just one decade earlier.
As corporate social responsibility becomes more important, businesses of all sizes can adopt agendas consistent with CSR. You’ll also be able to learn from companies who set an example in the space.
What is corporate social responsibility?
Corporate social responsibility is a business’s efforts to pursue goals that benefit society at large. Companies that practice corporate social responsibility measure their success not only by the profits they generate, but also by their impact on people, communities, and the environment.
CSR initiatives can range from smaller efforts, such as an employee volunteer day to pick up roadside trash in local communities to creating an entire department dedicated to social responsibility efforts. Business campaigns to benefit society generally fall into four major categories: economic, environmental, philanthropic, and ethical.
Economic responsibility
In the CSR business model, financial decisions should have a positive impact not only on the company’s economic development but also on the welfare of society. On a foundational level, responsible fiscal management protects the livelihoods of key stakeholders like employees and suppliers, while ensuring the company can continue to invest in various CSR programs.
Economic CSR practices include engaging in fair competition, contributing to local economic development through job creation and vocational training, promoting pay equity, partnering with suppliers who uphold ethical business practices, ensuring prompt payment of suppliers, hiring artisans in developing countries and paying a premium to fair value for their goods, launching incubators to invest in small and minority-run businesses, and more.
Environmental impact
As the effects of climate change become increasingly apparent, environmental initiatives are now a significant part of the CSR movement. Company initiatives include sourcing of sustainable materials, implementing net-zero carbon footprint goals, reducing energy consumption, shifting to renewable energy sources, enacting recycling programs and carbon-emissions-neutral shipping, adopting eco-friendly technologies, and tracking environmental performance and publicly reporting the results.
Philanthropic initiatives
Philanthropic businesses commit to contributing resources—financial and otherwise—to help improve communities and their residents’ lives. Philanthropic initiatives include donating money, products, or services to disaster relief efforts; employees volunteering their time to social causes; and supporting educational institutions or health care programs.
Ethical practices
CSR companies uphold high integrity in their business operations, beyond mandated legal and compliance minimums. Companies extend their ethical mission across the business’s operations and to all stakeholders—from its employees and contractors to suppliers, investors, and customers.
Ethical CSR efforts may include a commitment to sourcing fair trade materials and products, implementing a companywide minimum wage, avoiding corrupt and anti-competitive practices, paying partners like farmers a premium over fair trade guidelines, partnering with suppliers dedicated to fair labor practices and environmental sustainability, and supporting social causes that align with the company’s values.
Examples of corporate social responsibility
These six companies have taken steps to ensure some degree of social responsibility. You can learn from them how to run a company that prioritizes ethical business practices.
Ben & Jerry’s
Social responsibility has been in the fabric of the Ben & Jerry’s brand from the start—long before CSR was a mainstream term. The Vermont-based ice cream company devotes an entire section of its website to the company’s activism and values, and it’s made headlines for advocating for several causes, including racial justice, fair trade, LGBTQ+ rights, and climate impact.
In 1988, for example, co-founder Ben Cohen established an advocacy group called 1% For Peace, which set a goal of redirecting 1% of the US defense budget to fund initiatives to promote peace—and proceeds from sales of Ben & Jerry’s Peace Pop ice cream sticks went to the group. In 2005, to protest proposed oil drilling in the Arctic National Wildlife Refuge, Ben & Jerry’s made a 900-pound baked Alaska dessert with its Fossil Fuel ice cream and served it on the US Capitol lawn.
Patagonia
California-based outdoor apparel company Patagonia is a longtime values-driven leader in the CSR movement. Its CSR activities—which include ethical practices concerning factories, environmental initiatives, supply chain transparency, and more—began with the company’s founding in 1973. The fledgling brand sought to work with producers who valued quality and integrity. The company later became a vocal advocate of the anti-sweatshop movement and a founding member of the Fair Labor Association, an independent global network promoting workplace human rights.
Patagonia has implemented many other initiatives around social and environmental issues over the decades, culminating in the 2022 announcement that the company’s founder, Yvon Chouinard, had transferred his ownership to entities devoted to fighting climate change. The biggest share of the company, or 98% of the private company’s stock, went to the nonprofit Holdfast Collective—ensuring Patagonia’s profits of about $100 million per year are used to “support thriving communities and fight the environmental crisis.” The remaining 2% went to the Patagonia Purpose Trust, which aims to make sure the company never deviates from Chouinard’s vision of putting profits toward the planet.
Bombas
Sock and clothing company Bombas makes giving back a top priority. Bombas promises to donate an item for every item a customer purchases. The company says that, since its founding in 2013, it has donated more than 100 million items to help people experiencing homelessness. Bombas’s 2022 Impact Report also provides an innovative example of how it communicates its CSR priorities to customers, organizations, and more.
Mate
The Los Angeles–based clothier Mate presents its CSR responsibilities as its chief value proposition. Mate upholds its mission statement, “to provide people everywhere with essentials that are clean from seed to skin,” by listing publicly its company priorities. From making long-lasting styles to treating each part of its supply chain ethically, Mate aims to showcase its sustainability practices for customers.
Tom’s of Maine
Tom’s of Maine is a natural personal care products company best known for its toothpaste—the first natural product of its kind in the US when it launched in 1975. The brand holds itself to a stewardship model with rigorous definitions of “natural,” setting the bar high in selecting ingredients and packaging. The company discloses highly detailed information about each product ingredient, including where the ingredient comes from, what it does, and how it’s made.
This focus on natural, sustainable goods has also spurred innovation. In 2019, the company released a recyclable toothpaste tube, which was recognized by the Association of Plastic Recyclers and can be recycled alongside milk jugs, shampoo bottles, cleaning product containers, and other commonly recycled packaging.
Bumble
CSR initiatives can also go beyond a business’s products, with companies believing they should take a stand for their values and their customers. Dating app Bumble was designed so only women could send the first message, “shaking up outdated gender norms,” according to the company’s homepage. But Bumble aimed to impact online dating beyond its app. Though the app’s mission gave women more control in their online matches, it didn’t eliminate some of the harmful aspects of online dating, including unsolicited lewd photos. A 2018 study that Bumble commissioned found one in three women received sexually explicit photos they did not request.
Bumble leadership found that no legislation existed to penalize this behavior; it was a crime for someone to expose themselves in public, but not digitally. Starting in its home state of Texas, Bumble leadership worked with lawmakers to create legislation, passed unanimously in 2019, to criminalize this type of action. In 2022 a Bumble-backed bill passed in Virginia, establishing a civil penalty for sending non-consensual lewd images.
Corporate social responsibility FAQ
Is CSR limited to large corporations?
Not at all. Large corporations may have more resources and more public recognition, but businesses of all sizes can be driven by CSR principles and participate in social responsibility activities like sustainable solutions and ethical materials sourcing. Even a sole proprietor can take actions like volunteering time in marginalized communities or donating products or money to nonprofit organizations.
Are companies legally obligated to engage in CSR activities?
CSR as an overall concept is voluntary, centered on corporate responsibility activities that go beyond legal and compliance obligations. However, in some industries and countries, legal requirements include aspects of CSR, such as environmental regulations and workplace safety laws.
Who benefits from CSR initiatives?
A socially responsible company can benefit a wide range of stakeholders: communities that may reap economic development, employees who work in a positive and ethical environment, suppliers who receive fair prices for their goods, and the planet, thanks to sustainable development and the reduction of pollution. The business itself may also receive the benefit of a competitive advantage as customers increasingly seek to support brands that align with their values.
