Corporate social responsibility, or CSR, is a broad term encompassing various actions corporations undertake to make positive social contributions. This is often approached through philanthropy and volunteerism, as well as by modelling good corporate behavior. CSR actions typically address social needs in the areas of environmental stewardship, human rights, fair labor practices, health and safety, and economic development in surrounding communities. Some companies focus on one area, often as a founding principle of the corporation’s business model, while others contribute through a spectrum of actions.

Corporate Philanthropy

Companies exercise philanthropy by making direct contributions to communities, organizations or individuals in need. The retail company Target has a long-standing practice of contributing to the communities where its stores are located by sponsoring educational grants, environmentally sustainable projects and other initiatives. Overall, Target annually contributes 5 percent of its profits to local communities.

Philanthropic contributions also include donations in kind. The footwear maker TOMS Shoes was founded with the objective of helping children in need. For every pair of shoes it sells, the company donates a pair of shoes to a needy child. Since its inception, the company has donated upwards of 10 million pairs of shoes. It is now expanding its philanthropy to provide vision care for children.

Volunteering and Community Involvement

Community involvement through volunteering is a type of corporate social responsibility that ideally extends throughout the corporate hierarchy. For example, Xerox is widely known for its Community Involvement Program, in which employees at all levels are supported as they participate in causes that benefit local communities. Since the program began in 1974, over half a million employees have volunteered for company-sponsored community service projects.

Exemplary Business Behavior

Companies that model exemplary behavior truly “walk the walk” of corporate social responsibility. Small companies as well as corporate giants that use this approach not only serve as models of social responsibility, they also influence social and economic trends that lead to better outcomes for the environment and society as a whole.

For example, Accessibility Partners is a company that tests and reviews information-technology products to ensure that the items are functional and accessible for people with disabilities. In addition to advocating for disability rights, the company models integration by employing workers with disabilities, who amount to 70 percent of the workforce.

Google’s corporate-wide Google Green project uses renewable energy and energy-efficient products in an effort to reduce its carbon footprint. As a result, Google’s energy use in its data centers has declined by 50 percent. The benefits of this initiative extend beyond the company’s bottom line, as Google’s purchasing power boosts demand for renewable energy and energy-efficient products like light bulbs. This makes it more likely that providers will increase investment in these products, which in turn makes green energy more available to all consumers.