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Sustainability and CSR

"Corporate social responsibility", or CSR for short, is about a company's responsibility for society in the sense of sustainable business practices.

CSR: Background

CSR refers to a company's responsibility for its impact on society. This includes social, environmental and economic aspects, as for example outlined in the internationally recognised reference documents on CSR, chief among them the fundamental ILO declaration on multinational enterprises and social policy, the OECD Guidelines for Multinational enterprises, the UN Guiding Principles on Business and Human Rights, the UN Global Compact and ISO 26000. More specifically, CSR for example involves fair business practices, staff-oriented human resource management, economical use of natural resources, protection of the climate and environment, sincere commitment to the local community and also responsibility along the global supply chain.

Definitions: CSR, sustainability, CR or corporate citizenship?

In practice, many companies use the terms CSR and sustainability interchangeably. For example, some companies have sustainability strategies and a sustainability report, while others have CSR strategies and a CSR report.

A few years ago, many companies also started using the term corporate responsibility (CR) as a synonym for CSR. When discussing CR, some authors put more of an emphasis on the economic dimension of sustainability as well as on questions of corporate governance than when looking at CSR, others prefer CR in an effort to avoid confusion. That is because in German the "social" in CSR is often misunderstood to mean “supporting the socially-disadvantaged", wrongly reducing its meaning to too narrow a concept. Consequently, German companies have been using the term corporate responsibility more often over the past few years than CSR.

Corporate citizenship, on the other hand, only refers to those activities of a company that go beyond its business activities. In other words, it describes a company's civic engagement. By and large, corporate citizenship is limited to sponsoring, donations and the activities of a corporate foundation.

Core business anchoring

The concrete shape CSR takes varies from company to company. The CSR activities of a manufacturer will be different from those of a retailer, publicly-listed companies are confronted with other challenges than a family-run SME with deep roots in its region.

But all companies successfully implementing CSR have one thing in common: there is no way around anchoring CSR in the company's business activities. Companies which see their CSR activities as an add-on having nothing to do with their business model and core business fall short of the mark. Be it occupational safety and health, employee satisfaction, energy efficiency or responsibility along supply chains - many CSR fields have a huge bearing on a company's business success.