What is corporate social responsibility and why it matters for your future employees
The author is a university student majoring in industrial engineering and management and minoring in circular economy.
As the world keeps getting increasingly conscious of the problems and threats facing our planet and societies, many companies worldwide have developed a sense of responsibility towards the community and environment in which they operate. In an era where the promise of sustainability has become a considerable source of competitive advantage, we must remember to critically evaluate who is living up to their promises and what companies we support with our choices, including consumption, employment and partnerships.
Unfortunately, the most profitable business processes are often the ones that abuse our ecological and social environment. Pursuing economic growth brings us buying power and technological development, but the consumption of resources and other production factors cannot grow at the same pace. This notion of separating economic growth from resource use – decoupling – has been widely discussed as one of the primary goals of corporate social responsibility (CSR). CSR is defined as the social accountability of a company to itself, its stakeholders, and the public, as well as consciousness of the impact the company has on the economic, social and environmental aspects of society [1].
CSR is a frequently discussed concept in the modern corporate world and adhering to its philosophy is paramount to create sustainable development and ethical business. As a young engineer, I give great importance to following the principles of CSR. After all, many ecological and social threats could be realized during my lifetime if we continue our old habits. To take the green transition as an example, our oil reserves are predicted to run out in 30 years, gas in 40 years and coal in 70 years [2]. Immediate and systematic action is thus required to ensure our capacity to meet the future energy needs of my generation, not to mention future generations.
To entice actors to be more responsible, the question becomes: How do we make ethical businesses more profitable? In other words, how can CSR be made more attractive to companies? I would like to present three key courses of action that I believe to be fundamental to answer this question and increase sustainable and responsible business. These key elements are also an important motivator for me to work for a company committed to building a better future.
The first course of action is to develop innovative ideas, processes and technologies to make ethical business more efficient. Following a concept of separating economic growth from resource use, innovations can make the most of the resources used. Whether it's new technologies like artificial intelligence helping people do their jobs quicker while maintaining their well-being or new processes keeping materials in circulation for longer, new ideas are needed so that ethically produced goods can be offered to customers at a price that doesn't outweigh the emotional value gained from making the more responsible choice. The will to contribute to these disruptive ideas makes me want to work for a company that strives to improve the resource use of itself and the broader value chain.
The second key course of action stems from consumers' and buyers' power when purchasing anything. Purchases have traditionally been evaluated on the price-quality axis, but I believe an ethical dimension should be mixed into the equation. When consumers and industrial buyers require responsible production for the goods and services they purchase, unethical producers inevitably fall behind in market competition. It is thus our collective responsibility to make ethical choices whenever possible. Following the same logic, selecting an employer is also a choice that holds power. With this powerful choice, I want to support a company that respects the future of its community and environment. Delightfully, the recent, noticeable rise of sustainability-related marketing efforts has shown that buyers have already started to require responsibly produced goods. According to a report published in August 2023 by the Chartered Institute of Marketing (CIM), two-thirds of consumers (63%) believe that companies need to be more vocal about the sustainability of their products and services. Marketers have reacted: according to the report, over half (55%) of marketing professionals recognize that sustainability is an increasing priority [3]. However, greenwashing is a notorious threat to the power of the buyer. Therefore, the third course of action is to evaluate ethical claims critically. I, for one, am very skeptical whenever I come across sustainability marketing.
How do we differentiate genuine efforts from empty words? The mention "read more about our efforts here" is a good sign. Still, the information should not be available solely in some 400-page sustainability report filled with small print and technical jargon. Instead, information about the company's sustainability efforts should be democratized. For this purpose, companies like Upright Project present clear and understandable data about our societal and environmental impacts. As covered by the Upright model, there are many ways for a company to contribute to sustainability. These include, for example, producing helpful technology or monitoring the environmental and social effects of operations, by-products, and partnerships. The best way to identify greenwashing is thus to work with these subjects and learn to critically look at the big picture and analyze the company and its value network for oneself.
Keeping these three courses of action in mind, I hope we can collectively navigate towards a sustainable economy and create satisfactory working and living environments for mine and future generations.
References
[1] https://www.investopedia.com/terms/c/corp-social-responsibility.asp
[2] https://mahb.stanford.edu/library-item/fossil-fuels-run/
