Last Updated on September 5, 2022

What are the benefits of corporate social responsibility?


Corporate social responsibility of a company is an approach of it to be responsible towards its customers, shareholders, and the mass in general, for the social and environmental impact of its business operations. CSR or corporate social responsibility limits not only in donating money or printing double pages to save the trees. It relates to the health and overall wellbeing of society. Being ethical and transparent in business operations is the first step of corporate social responsibility. Besides improving a community corporate social responsibility can be beneficial for your business too. Here are some benefits of corporate social responsibility for your business and community.

What is corporate social responsibility?

CSR is a broad business concept. It describes the commitment of a company to carry out its business ethically.

This means that every decision the company takes will be keeping in mind its social, environmental, and economic impacts on society.

Corporate social responsibility includes a lot of CSR activities like-

  • Environmental management; recycling of materials, waste reduction, and sustainability.
  • Socially responsible investments
  • Employee volunteering
  • Improvement for employees and community relationships
  • Responsible sourcing i.e. using only fair and legal trade ingredients
  • Improvement in the working conditions and working standards
  • A contribution to social, educational, and public health-related programs

With your company’s CSR activities you can make positive impacts on different stakeholder groups.

The stakeholders are the ones who have an interest in your business and invest in it.

Your different CSR activity can make you get positive opinions of different groups of stakeholders.

  • Consumers: You can get the attention of your consumers through fair and open business practices. By increasing good customer relationships you can retain customers and boost your business.
  • Suppliers: While choosing the suppliers you need to look at their health, labor, safety, and environmental practices.
  • Communities: By sponsoring local events, volunteering, and taking part in charity initiatives you can acquire a good image in the society.
  • Employees: By leading and motivating your staff, by implementing incentive schemes, and by controlling staff turnovers you can get a positive impression from your employees.

What is the need for corporate social responsibility?

Your business needs to operate in a way that showcases social accountability to the community.

Although it does not have any legal requirement, yet it has many ethical values.

This ethical practice and social responsibility are important for your company’s success.

By taking positive actions for social and ecological issues you will make a good image of your company in front of the world.

The 2015 study on CSR by Cone Communications or Ebiquity Global shows that almost 91% of the worldwide customers want businesses to act responsibly and address social environmental issues.


And a majority of them try to look to find out liable products as much as they can.

This statistic shows that consumers are gradually getting more conscious of the need for corporate social responsibility.

They are actively choosing products from the company that act ethically.

The CSR demonstrates to the mass that your company has interests in wider global issues and not just for the issues that bring you profit.

What are the benefits of corporate social responsibility?

There are numerous advantages of CSR both in business as well as in public life.

A CSR society, in which every big organization cares for normal people, is an ideal society.

Here are some of the benefits of corporate social responsibility that has its effects in every organization.

Increased brand value and recognition

Your social activities will make your company’s name recognizable for all.

Besides your business customers, general people can also recognize your organization.

People will take your brand as one with good ethical values.

People will trust your brand.

They will organically spread your name to others.

This is a sort of marketing too.

Here you do good acts to win the hearts of common people.

And next time when they need any service they will recall you or recommend your name to others.

Thus your name will be spread to more and more people as a benefit of corporate social responsibility.

An edge over rivals

By considering social and environmental issues important and by taking serious steps for it you get one step ahead of your competitors.

Along with good products or services if you develop good impressions among the consumers and investors then nobody can beat you.

While your competitors will struggle to get profit to beat you, you get more recognition with your constant acts of corporate social responsibility.

Promotes personal and professional growth

CSR activities like involving your employees on extra skillful acts, teaching, and learning curriculum will develop their working capability.

As a result, CSR activities will benefit your business by teaching your employees new skills that they can use in the workplace.

These CSR activities will bring freshness to their daily routine.

They get the opportunity to contribute a little to society and also get relaxation from their daily work responsibilities.

As a result, they feel more passionate about their work because they are learning something new and also developing society.

Thus the employees will connect more with the organization, and they will enrich their perspectives as well.

Thus corporate social responsibility helps in the professional and individual growth of the employees involved in it.

Supports you to be a preferred employer

CSR helps you to become a preferred employer for the jobseekers and your employees.

Moreover, it depends on the company’s ability to attract new talents and retain those high-skilled employees.

Some CSR approaches like working conditions, flexibility in work, behavioral guidelines, promotion schemes, incentive schemes, etc will make you a preferable employer.

An educated and socially responsible job seeker will seek a workplace that has values for its employees, has ethics, and perform social practices.

Supports public value outcomes

Public value is nothing but the value that an organization contributes to society.

With a perfect corporate mindset and an effective robust CSR framework, only a company can truly deliver public value to society.

This initiative of making a positive difference in society happens often indirectly.

Here one organization helps the other to contribute to the community.

On the other hand, change can happen directly by the company’s activities like philanthropy and volunteering.


If you take the initiatives like using less packaging, using recycled materials, using recyclable materials, then you can use it for more than one time.

This will lessen your production costs surely.

If you reduce the dependency on coal energy and focus more on solar energy then it will result in a profit, in the long run, both environmentally and financially.

Plastic is cheap and durable but it causes incurable damage to our environment.

Thus if you use jute bags for packaging it will show your concern for nature and contribution for its betterment to your consumer.

People will appreciate your goodwill and you will get double profit in no time.

The negative effects of corporate social responsibility on business:

Instead of having so many benefits, corporate social responsibility can cause some negative effects too-

It can conflict with the profit motive

Some experts believe that it can be an exercise in futility.

This is because even a large company finds the cost of implementing CSR as an obstacle.

The responsibility of a company is to double up the profit to the shareholders.

But CSR opposes this fiduciary duty of the company’s management.

A manager can lose his job if he forsakes profit in favor of some benefits to society.

A business’s first and primary motive is to earn a profit.

Thus the famous Nobel-Prize winner Milton Friedman writes his article with the title named “The Social Responsibility of Business is to Increase its Profits”.

Implement takes a lot of money

The main disadvantage of it is that its cost falls disproportionally on small businesses.

A big company can afford to allocate a separate budget for this purpose but it is not possible for a small business with a limited workforce to do that.

Social media can help to a certain extent for the promotion of the CSR policy to the customers and the local community but it takes time.

It takes extra input for monitoring changes and requires hiring extra employees that small businesses cannot afford sometimes.

Customers can detect pretensions

There is a term called Greenwashing.

It happens when a company pretends to be environmentally responsible but does not include or change anything on their business policy.

For instance, a product may be labeled as “all-natural” yet has nothing natural in it.

The term organic is very popular nowadays.

You can see it everywhere.

But with a little bit of concentration, you can find that a lot of brands are simply using the term without using anything organic at all.

These types of pretentious activities can engage customers for some time.

But one cannot befool a sincere consumer.

The bottom line

Thus corporate social responsibility is a healthy practice and the duty of every company towards society.

But this activity will only be successful if one takes it truly for a good purpose.

The motive should be noble, honest, and clear to all.

With a positive mindset and a positive approach for the betterment of society CSR thus can be a beneficial activity for all companies.

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