Corporate social responsibility (CSR) helps organisations to conduct their business in a way that brings them benefits while also benefiting those who are affected by their activities – their many “stakeholders”.
CSR has a number of strands: economic, environmental and ethical as well as social. The word “social” is sometimes dropped, leading to CR for corporate responsibility, but the scope remains the same. There are other terms too; all imply a duty or compliance focus. But CSR is also about creating opportunities for business in new socially aware markets.
A business needs to satisfy investors of capital, but companies are not just profit-making vessels for shareholders. They have other responsibilities. These include treating employees with respect, limiting damage to the environment, and acting with integrity towards customers. This formula is good for the business and its investors, as well as for society.
Who are the stakeholders?
Stakeholders are any interest group with a direct or indirect stake in the business. They may affect, or be affected by, business operations – i.e. they may either contribute to the success of the business or be impacted (often negatively) by the way the business conducts its trade. The basic list of stakeholders includes:
- the wider community.
Beyond this core group, any particular business will have a wider list of stakeholders. They might include:
- industry regulators
- local media
- retired staff in receipt of a company pension.
All have an interest in how the company behaves. The needs and the potential contribution of such groups are worthy of a company’s thoughtful analysis and engagement.
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