43 - What is Corporate Social Responsibility

Corporate responsibility, also known as corporate social responsibility (CSR) or corporate citizenship, refers to a company's commitment to addressing and managing its impact on society and the environment. Integrating social, environmental, and ethical considerations into a company's business practices and decision-making processes.

Corporate responsibility extends beyond the pursuit of profit and encompasses a broader set of responsibilities towards stakeholders, including employees, customers, communities, suppliers, and shareholders. It recognises that businesses have a role in contributing to sustainable development, fostering positive social outcomes, and minimising negative environmental impacts.

Critical areas of corporate responsibility often include:

 1. Environmental Sustainability: Companies are expected to adopt practices that minimise their environmental footprint, such as reducing greenhouse gas emissions, conserving resources, promoting renewable energy, and implementing waste management and recycling initiatives.

 2. Ethical Business Practices: Conducting business with integrity, transparency, and fairness. Companies must adhere to ethical standards, combat corruption and bribery, and ensure responsible governance.

3. Social Impact and Community Engagement: Companies are encouraged to engage with and positively contribute to the communities in which they operate. This can include supporting local initiatives, investing in education and healthcare, promoting diversity and inclusion, and respecting human rights throughout their supply chains.

 4. Employee Well-being and Development: Ensuring employees' well-being, safety, and fair treatment is an essential aspect of corporate responsibility. This involves providing a safe working environment, fair wages, equal opportunities, and supporting employee development and work-life balance.

 5. Stakeholder Engagement and Dialogue: Companies must engage in open and transparent dialogue with their stakeholders, including customers, investors, employees, and communities. This helps build trust, allows for feedback, and enables companies to understand and respond to societal expectations and concerns.

6. Responsible Supply Chain Management: Companies ensure that their supply chains operate ethically and sustainably. This includes monitoring suppliers for compliance with labour and environmental standards and addressing any issues.

 Corporate responsibility is not only driven by ethical considerations but also by the recognition that responsible business practices can lead to long-term financial success. It can enhance a company's reputation, attract and retain talented employees, strengthen customer loyalty, and mitigate risks associated with environmental and social issues.

Many companies now publish sustainability reports or CSR reports to communicate their commitments, goals, and progress in these areas, allowing stakeholders to assess their performance and hold them accountable. Additionally, various frameworks and standards, such as the Global Reporting Initiative (GRI), the United Nations Global Compact, and the new IFRS (International Financial Reporting Standards) Sustainability Disclosure Standards S1 are the general requirements for the disclosure of sustainability-related financial information and S2 climate-related disclosures which came into effect 1 January 2024.