Corporate Social Responsibility guides the decisions of impact-conscious businesses around the globe. While businesses may exist for the sake of earning profits, many go beyond this and use their operations to benefit society – or at least do what they can to mitigate any detrimental consequences of their actions. There are many types of efforts that a company can take in order to carry out CSR, and they can be roughly broken down into four main forms, listed below.

Economic Responsibility

This first type of CSR encourages companies to financially support their good intentions – meaning that they exist as a company not only to make money but to also do good. Decisions are made not to maximize profits but to minimize harmful consequences. A business may choose to purchase materials at a higher cost from a supplier who uses more sustainable materials, treats their workers fairly, or reinvests into the community. While sacrificing a portion of their profits, this business is choosing the more responsible option and backing that decision with its financial resources. In this way, economic responsibility is linked to, and perhaps the foundation of, the three remaining forms of Corporate Social Responsibility.

Ethical Responsibility

Ethical Responsibility means that a business is committed to operating in a fair, respectful, and ethical manner. There are a number of ways a company can implement this type of CSR. Ethical businesses typically ensure that employees earn livable wages and may set a higher minimum wage than that mandated by the state or federal government. Similarly, a company is likely to source materials from suppliers which do not utilize any form of slavery or child labor in their manufacturing process. An ethical business treats everyone – from shareholders and employees to customers and suppliers, with respect, dignity, and fair practices.

Environmental Responsibility

Businesses, especially large corporations, have a major impact on the state of the natural environment, leading to the prevalent opinion that these companies have a responsibility to operate in a way which reduces harm. Environmental stewardship involves a vast array of eco-friendly initiatives such as reducing pollution, turning to renewable energy sources or offsetting emissions, purchasing materials from sustainable sources, recycling instead of wasting byproducts, conserving resources like water, and contributing to planting trees or other environmental restoration projects.

Philanthropic Responsibility

This final type of Corporate Social Responsibility is centered around a company’s efforts to give back. Some businesses contribute a portion of their profits to charitable causes or societal needs, while others may set up their own organization or charitable trust. By the willingness to part with some of its earnings, a business is buying into the future and success of their community and of society as a whole.

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Note: Socially responsible businesses often utilize multiple – or all – forms of Corporate Social Responsibility. The companies and organizations chosen as examples may engage in many of these forms of CSR, but they have been listed under the main, foundational form of CSR that defines their business model. Click on the examples to read their Case Studies and learn more about what they do and how they operate responsibly.

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