Businesses can do more than just generate profits. They can adopt sustainable practices, speak out against injustice, source responsibly, and consistently act ethically as good corporate citizens. As customers increasingly support brands that align with their values, corporate social responsibility (CSR) is becoming more important to business performance. In 2020, 92% of companies in the S&P 500 Index published a sustainability report, up from just 20% a decade ago.

As corporate social responsibility becomes increasingly important, businesses of all sizes can adopt an agenda that aligns with CSR. They will also have the opportunity to learn from companies that are leading the way in this area.

What is Corporate Social Responsibility (CSR)?

Corporate Social Responsibility (CSR) refers to the efforts of companies to pursue goals that benefit society as a whole. Companies that practice CSR measure their success not only by profit generation, but also by the impact they have on people, communities, and the environment.

CSR initiatives range from small-scale efforts, such as employees volunteering to pick up litter along the roadside in their local community, to larger efforts, such as creating a department dedicated to social responsibility. Corporate campaigns to benefit society can generally be divided into four main categories: economic, environmental, charitable, and ethical.

Economic responsibility

In a CSR business model, financial decisions should have a positive impact not only on the company's economic development but also on the well-being of society. Essentially, responsible financial management protects the livelihoods of key stakeholders such as employees and suppliers, and ensures that 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 wage equality, forming partnerships with suppliers who adhere to ethical business practices, ensuring prompt payment to suppliers, hiring artisans in developing countries and paying a premium above fair value for goods, and establishing incubators to invest in small and minority-owned enterprises.

Environmental impact

As the impact of climate change becomes more apparent, environmental initiatives have become an important part of the CSR movement. Corporate initiatives include sourcing sustainable materials, implementing net carbon emissions targets, reducing energy consumption, switching to renewable energy, implementing recycling programs and carbon-neutral shipping, adopting green technologies, and tracking and publicly reporting environmental performance.

Charity work

Charitable organizations are committed to improving the lives of communities and their residents by contributing financial and other resources. Charitable initiatives include donations to disaster relief efforts, product or service donations, employee volunteering for social causes, and support for educational institutions or medical programs.

Ethical Practice

CSR companies maintain high ethical integrity beyond the minimum standards of legal and regulatory compliance. Companies extend their ethical mission to all aspects of their business operations and to all stakeholders—employees, contractors, suppliers, investors, and customers.

Ethical CSR efforts may include a commitment to sourcing fair trade materials and products, introducing a company-wide minimum wage, avoiding corruption and anti-competitive practices, paying partners such as farmers a premium above fair trade guidelines, working with suppliers committed to fair labor practices and environmental sustainability, and supporting social causes that align with the company’s values.

Examples of social responsibility

• Ben & Jerry's
• Patagonia
• Bombas
• Mate
• Tom's of Maine
• Bumble

The following six companies are practicing some level of social responsibility. You can learn how to run a company that prioritizes ethical business practices.

Ben & Jerry's

Ben & Jerry's has embraced social responsibility as a core value since the brand's inception. The company has been practicing these values ​​long before CSR became a mainstream term. The Vermont-based ice cream company devotes an entire section of its website to its social work and values , and has been recognized for its support of issues such as racial justice, fair trade, LGBTQ+ rights, and climate impact.

For example, in 1988, co-founder Ben Cohen founded the advocacy group 1% For Peace, which set a goal of allocating 1 percent of the U.S. defense budget to initiatives promoting peace. Proceeds from the sale of Ben & Jerry's Peace Pop ice cream sticks were donated to the group. In 2005, to protest proposed oil drilling in the Arctic National Wildlife Refuge, Ben & Jerry's created a 900-pound Baked Alaska dessert and served it on the lawn of the U.S. Capitol.

Patagonia

Patagonia , a California-based outdoor apparel company, is known as a values-driven leader in the CSR movement. Patagonia’s CSR activities include ethical practices in factories, environmental initiatives, and supply chain transparency, and have been around since the company was founded in 1973. As an early brand, Patagonia sought to partner with producers who valued quality and integrity. The company has since become a vocal advocate for the movement, becoming a founding member of the Fair Labor Association , a global human rights network.

Patagonia has been embracing a number of initiatives focused on social and environmental issues for decades, culminating in founder Yvon Chouinard’s announcement in 2022 that he would transfer ownership of the company to a group fighting climate change. The majority of the company’s stake, 98%, will be donated to the nonprofit Holdfast Collective, which will use Patagonia’s roughly $100 million in annual profits to “support thriving communities and combat the environmental crisis.” The remaining 2% will be donated to the Patagonia Purpose Trust, ensuring the company never strays from Chouinard’s vision.

Bombas

Bombas, a sock and apparel company, is making giving back a priority. Bombas pledges to donate one item for every item a customer purchases . Since its founding in 2013, the company says it has donated more than 100 million items to help people experiencing homelessness. Bombas’ 2022 Impact Report also provides innovative examples of how the company communicates its CSR priorities to customers, organizations, and more.

Mate

Mate, a Los Angeles-based clothing company, puts CSR responsibility at the forefront of its value proposition. Mate publicly lists its priorities , stating that it “provides clean essentials to everyone, from seed to skin.” Mate emphasizes sustainability practices to its customers, including creating long-lasting styles and ethically sourcing every part of its supply chain.

Tom's of Maine

Tom's of Maine is a natural personal care company, especially known for its toothpaste. First launched in the United States in 1975, it was the first natural product at the time. The brand has a strict definition of 'natural' and adheres to a care model that maintains high standards in the selection of ingredients and packaging. The company discloses detailed information about each product ingredient , including where it comes from, what it does, and how it is made.

This focus on natural, sustainable products has also spurred innovation. In 2019, the company launched a recyclable toothpaste tube, which has been recognized by the Plastic Recycling Association as being recyclable alongside milk bottles, shampoo bottles, cleaning product containers and other commonly recycled packaging.

Bumble

CSR initiatives can extend beyond a company’s products, and companies believe they should take a stand for their values ​​and their customers. The dating app Bumble was designed to “shake up old-fashioned gender norms” by allowing only women to message first. But Bumble wanted to impact the online dating landscape beyond its own app. While the app’s mission was to give women more control over their online matches, it didn’t completely eliminate the harmful aspects of online dating, such as unsolicited sexually explicit photos. A 2018 study commissioned by Bumble found that one-third of women had received unsolicited sexually explicit photos.

Bumble executives found that there were no laws to punish this behavior. Exposing oneself in public was a crime, but not digitally. Starting in Texas, Bumble executives worked with legislators to enact a law criminalizing this behavior, which passed unanimously in 2019. In 2022, a bill sponsored by Bumble passed in Virginia that would impose civil penalties for nonconsensual transmission of sexually explicit images.

Corporate Social Responsibility FAQs