When it comes to corporations, social responsibility may not be the first thing that comes to mind. While some corporations are focused exclusively on the bottom line, many businesses adopt a broader view of their mission. Different models of corporate social responsibility exist, but a common one focuses on four components: economic, legal, ethical and discretionary.
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The four components of corporate social responsibility are economic, legal, ethical and discretionary.
Economic Social Responsibility
Economic social responsibility begins with being profitable. Before a business can give back, it must be sustainable. Sustainability includes making a profit for shareholders, paying its employees an appropriate wage, paying business taxes and meeting other financial obligations. Corporations can show economic social responsibility by being transparent with all stakeholders regarding the financial status of their business.
Legal Social Responsibility
Consumers are more likely to buy products and utilize services from companies they trust. A part of building that trust is abiding by the laws that regulate your business. Paying the required taxes, adhering to labor laws and allowing inspections are all examples of legal social responsibility. It may sound basic, but not being attentive to your legal obligations can lead to your business being sued and can hurt the business’ reputation — and your reputation is vital to your success.
Ethical Social Responsibility
Economic and legal corporate responsibility lay the groundwork for corporations to move into ethical social responsibility, which means doing the right thing at all levels of your business. This ranges from paying employees a living wage to ensuring that the companies you work with and buy materials from are abiding by all labor laws.
In addition to ensuring ethical workplace practices, you should also look at the environmental impact your business makes. If possible, consider using recycled materials and clean energy. Go beyond meeting the minimum environmental requirements and look at how you can exceed those requirements, which gives consumers a good impression of your brand.
Discretionary Social Responsibility
Discretionary social responsibility means using your company’s time and resources to contribute to the community at large in whatever way is meaningful for you and your brand. This may include providing your employees with opportunities to volunteer; donating money, services or products to charitable organizations; or initiating your own charitable organization that ties into your company’s mission and goals. You may want to support multiple organizations or simply focus your efforts on one or two meaningful ones.
Corporate social responsibility shows that your company is about more than just the numbers. It shows that you care about your impact on the world, which appeals to consumers who want to feel good about the products they buy. By making an effort to be socially responsible, you can ensure that your company leaves a lasting, positive impact.