corporate social responsibility research proposal

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• Published: 05 July 2016

Corporate social responsibility research: the importance of context

• Carol A. Tilt 1  

International Journal of Corporate Social Responsibility volume  1 , Article number:  2 ( 2016 ) Cite this article

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There has, in recent times, been an increasing interest in understanding corporate social (and environmental) responsibility (CSR) and, in particular, CSR reporting in developing countries. However, many of these studies fail to investigate fully the contextual factors that influence CSR and reporting in those countries, preferring to rely on theories and hypotheses developed from studies undertaken in the West, particularly the US, UK and Australasia.

It may be argued that this is appropriate as many emerging economies are experiencing growth and moving towards having a more market-based orientation. Notwithstanding this, a large number of these countries have an entirely different socio-political environment, with different political regimes, legal systems and cultural influences. These factors have a significant effect on the applicability of theories such as stakeholder theory, legitimacy theory and accountability theory, which are commonly used to explain the phenomenon of reporting.

In State Capitalist countries, such as China, an important influence on companies is the political ideology that underpins the nation’s government. The nature and impact of ideology and hegemony in China has been under-studied and, therefore, investigating how the ideology, and competing forces that may mitigate its influence, manifest themselves in Chinese reporting are essential. In the Middle East, countries such as Saudi Arabia have no free press, are ruled by a royal family, have a market dominated by the oil industry, and potential religious influences. Such socio-cultural differences mean societies develop different understandings of concepts such as sustainability and social responsibility. Finally, countries such as Sri Lanka have some similarities to other developing countries, but their economy is set against a background of a recent civil war – operating in a post-conflict economy is a factor rarely considered in social and environmental disclosure, yet has important influence on policy in these areas.

This paper discusses three contextual issues that warrant more and improved consideration in CSR research, with particular emphasis on CSR reporting research.

More and more corporations worldwide are involved in corporate social responsibility activities, and as a result are providing more social and environmental information to the public. Following from this, CSR disclosure, or reporting, has become one of the major fields of investigation by accounting scholars (Deegan 2009 ; Mathews 1997 ; Tilt 2001 ). Research that considers both CSR activity and CSR reporting has traditionally focused on companies in more developed economies, predominantly the US, UK, Australia and New Zealand (Burritt and Schaltegger 2010 ; Frost et al. 2005 ; Gray 2006 ; Gurvitsh and Sidorova 2012 ; Othman and Ameer 2009 ; Patten 2002 ; Sahay 2004 ), but recently there has been increasing interest in understanding the phenomenon in developing countries particularly as they experience growth and move towards a more capitalist orientation (Sumiani et al. 2007 ). Of the research that does exist, a number of papers suggest that ‘country’ is a determinant for CSR involvement and for the level of disclosure, but do not go much further.

Many of the studies of developing countries however, choose a framework for their investigation based on those shown to be meaningful for explaining disclosure in developed, capitalist economies. That is, they fail to investigate fully the contextual factors that influence firms and their reporting in those countries that have a different social, political, legal and/or cultural context.

It may be argued that this is appropriate as many emerging economies are experiencing growth and moving towards having a more market-based orientation. However, this is rarely acknowledged or questioned in these papers. Yet, it is reasonable to suggest that these factors have a significant effect on the applicability of theories such as stakeholder theory, legitimacy theory and accountability theory, which are commonly used to explain the phenomenon of reporting.

The majority of the world’s population lives in developing countries and each country experiences its own unique social, political and environmental issues (United Nations 2013 ). These countries are in the process of industrialisation and are often characterised by unstable governments, higher levels of unemployment, limited technological capacity, unequal distribution of income, unreliable water supplies and underutilised factors of production. As a result of rapid industrial development, policies are pursued that aim to attract greater foreign investment, and the investors are often keen to start benefitting from fiscal incentives and cheap labour. While these strategies make economic sense, they have adverse social and environmental effects, including the use of child labour, low or unpaid wages, unequal career opportunities, occupational health and safety concerns, and increased pollution.

In a review of the literature on determinants of CSR reporting (Morhardt 2010 ), reports that research on the impact of different variables in different regions is inconclusive due to the lack of enough studies. Factors that may influence CSR disclosure practices fall broadly into internal and external (Fifka 2013 ; Morhardt 2010 ), but are commonly classified further as (Adams 2002 : p224):

Corporate characteristics, such as size, industry group, financial/economic performance and share trading volume, price and risk;

General contextual factors, such as country of origin, time, specific events, media pressure, stakeholders and social, political, cultural and economic context; and

Internal contextual factors, including different aspects of corporate governance.

While CSR reporting has been studied by a large number of scholars, only a few fall into the second of the categories above, and consider context in detail. This is particularly relevant when considering developing countries. A few papers have specifically reviewed studies on developing countries. For example, (Belal and Momin 2009 ) categorise the work on developing countries into three groups: studies of the volume or extent of reporting; studies of the perceptions of CSR reporting by managers; and studies of the perception of CSR reporting by stakeholders. In all the studies reviewed there is little discussion of the context, other than a description of the country, and no real thought about the theoretical assumptions being made.

This paper presents a discussion of the different contextual issues or factors that show some evidence or potential to influence CSR and reporting in developing countries. It focusses on three specific issues and provides a research agenda for future consideration of the influence of context in CSR reporting research. The paper is structured as follows. The next section introduces some broad contextual factors that warrant consideration in the literature on CSR reporting. Next, three specific contextual issues are examined: the role of political ideology and hegemony; the influence of cultural understandings; and the impact of historical economic context. Finally, by way of conclusion, some recommended areas for further research are suggested.

Contextual considerations

Adams ( 2002 ) talks about the social, political, cultural and economic context, so some consideration of what this might mean is needed as each of these concepts themselves cover a variety of aspects, and indeed overlap. While papers may talk about the ‘social context’ in which the companies being examined operate, this is not well defined and little consideration is given to what this means. Some things that could be more explicitly considered include, inter alia : the role of the press; the status of women; the legal/justice system; the level of corruption; the level of government control, cultural understandings; and so on. This paper chooses to highlight three of these areas, and these are discussed briefly below in broad terms, followed by a discussion of some specific aspects of each identified as providing fertile grounds for future research.

Political system

Assumptions are often made about capitalist systems, whether explicit or implicit, as the vast majority of work on CSR reporting has been done in the Western context. However, there is little research looking at CSR reporting in socialist or communist countries. Some work has been undertaken on China (Dong et al. 2014 ; Gao 2011 ; Situ and Tilt 2012 ), but this work often applies the same conceptual frameworks as Western studies. What about the influence of ideology, and hegemony?

Sociocultural environment

Human beings have “distinctive cultural (learned) characteristics, histories and responses to their environment” and the term ‘sociocultural’ is commonly used in anthropological research to describe these and the “interactions and processes” that this involves (Garbarino 1983 : p1). Some general studies of culture and CSR using Hofstede exist (Silvia and Belen 2013 ), but an in-depth analysis of different understandings and conceptions of terms such as CSR as a result of sociocultural influences is lacking. The work that does examine specific factors often suggests that the Western concept of CSR does not fit these contexts (Wang and Juslin 2009 ).

The majority of work that considers sociocultural factors has looked mainly at religious aspects of CSR, most commonly by reviewing reporting by Islamic organisation, such as Islamic banks (Maali et al. 2006 ; Siwar and Hossain 2009 ; Sudarma et al. 2010 ). The teachings of many religions focus on social responsibility, the relationship with the natural environment, treatment of others, fairness, justice, etc., so there is a natural expectation that religion-based organisations may be more likely to engage in CSR and CSR reporting. A more nuanced consideration of how this manifests itself in different societies would improve understanding of the drivers and motivations of these activities. Similarly, other sociocultural factors, such as national identity, values, social organisation and language, could be incorporated.

Stage of development

The emerging literature on CSR reporting outside the Western world examines countries that are ‘developing’ (Belal and Momin 2009 ; Momin and Parker 2013 ), but little depth is included about where they are in their development journey and how the potential conflict between economic and social goals impacts CSR or CSR reporting. Rostow’s ( 1962 ) Stages of Economic Growth model suggests there are five stages (traditional society, preconditions for take-off, take-off, drive to maturity, and age of high or mass consumption), yet most literature on CSR classifies countries only into developed or developing. The ‘developing’ classification potentially includes countries that are in Rostow’s first, second or third stage which may have an impact on their response to CSR issues. In addition to economic variables however, the United Nations also produces a Human Development Index (HDI) which considers life expectancy, education and income to measure how social, as well as economic, development (UNDP 2015 ). Both these concepts are important for consideration of CSR.

Importantly, consideration of just one or two aspects of these three broader contextual issues may result in misinterpretation of the results. Often these things interact, for example, social issues often cross over with cultural and religious impacts, or even with political influence where the regime is more hegemonic. It is thus important to consider, or at least acknowledge, the holistic nature of the context of the phenomenon being examined.

It is beyond the scope of this paper to discuss all of the issues raised here although this would be an important part of a larger research program. Therefore, three particular contextual issues, and three specific contexts, are the focus of this paper: the role of political ideology and hegemony (China); the influence of cultural understandings (Middle East); and the impact of historical economic context (Sri Lanka).

Politics, ideology and state control

Ideology is a set of common beliefs that are shared by a group of people, and is “the fundamental social beliefs that organize and control the social representations of groups and their members” (Van Dijk 2009 : p78). Countries such as China provide a fertile research setting to examine the influence of ideology, and hegemonic approaches of influencing CSR, which have been missing from most CSR research in the region.

The Chinese political model has some unique characteristics. Among these is the dominance of ‘the party state’, which exercises control in different forms over most aspects of the economy that is unmatched when compared to other state capitalist economies. Political leaders use a variety of tools (Bremmer 2010 ) and it is the combination of three particular tools that sets apart the Chinese system: the exercise of control as a dominant shareholder, the ability to appoint key positions in major firms, and the means to influence decision-making via ideology. First, the party exerts shareholder power over state-owned enterprises (SOEs). Chinese SOEs play an instrumental role in society (Du and Wang 2013 ) and make up around 80 % of the stock market (Economist T 2012 ). As protecting the environment is a major part of the guiding ideology and the nation’s policy, SOEs are likely to be keen to provide CER. Second, the party exercises power over the appointment of the senior leadership in SOEs (Landry 2008 ). This has resulted in control as they are “cadres first and company men second. They care more about pleasing their party bosses than about the global market” (Economist T 2012 : p6). Third, party control is exercised through ideology. The party has cells in most larger firms, whether private or state-owned, which influence business decisions made at board meetings. Given that China considers the Marxist-Leninist-Maoist ideology as crucial this distinguishes it most significantly from other varieties of state capitalism that have a more liberal-democratic flavour.

There is some evidence that the first form of party control has been declining in recent times with the number of SOEs under the SASAC’s control halving over the last decade (Mattlin 2009 ). Similarly, since 1999, the share of SOEs in the economy has declined from 37 % to less than 5 %. This results in greater use of regulation and ideological hegemony to achieve its aims, yet most CSR research still uses state-ownership as a proxy for all types of state control.

Even after economic reform, ideology in China was still pervasive (Lieber 2013 ). Lieber ( 2013 ) argues that ideology is widely used to signal loyalty and the government is good at using ideology to “control and direct key vocabularies… (and) vague ideological language can create a climate of uncertainty thus increasing the range of a control regime” (Lieber 2013 : p346). However, the prevailing ideological themes in China are dynamic. In particular, most recently, new ideological themes have developed to respond to the changes in society. When economic reform began, “building up a socialist market economy with specific Chinese characteristics” was the guiding ideology (Zhang 2012 : p25). As such, economic growth was the country’s priority, but in 2005, “building up a harmonious society became the prevailing ideology” (and CSR is a key element of this resolution).

Ideology is used by the Chinese government to exert control over businesses. Traditionally, the government has “been considered a source of moral authority, official legitimacy and political stability…and …political language has been vested with an intrinsic instrumental value: its control represents the most suitable and effective way first to codify, and then widely convey, the orthodox state ideology” (Marinellin 2012 : p26). The language “developed and used by party officials … consists of ‘correct’ formulation, aims to teach the ‘enlarged masses’ how to speak and, how to think” (Marinellin 2012 : p26). The idea of the importance of a ‘Harmonious Society’ is the “re-contextualized discourse in response to the emergent issues in the changing social stratification order” (Zhang 2012 : p33). As a result, Chinese companies have been noticeably adopting the language of social concern and environmental protection.

It may therefore be suggested that CSR reporting in China is directly a response to the government’s ideological hegemony. However, the story is not as straightforward as it may first appear, for two reasons. First, despite a great deal of commitment to social and environmental regulation in China, implementation of these regulations has been limited. Second, as China enters a phase of continued economic development, Western influences may begin to have a moderating effect on the strength of the ideology.

The Chinese economy has grown rapidly in terms of gross domestic product (GDP) (World Bank 2016 ). The economic reforms that took place over the past decades were motivated substantially by the Chinese central government, and recent scholars have noted the positive role that ideology played in driving those reforms, notwithstanding that economists historically view ideology as “distorting… knowledge, judgment and decision making” (Lieber 2013 : p344).

With economic reform however, has come substantial environmental degradation which in turn has led to poor health outcomes for much of society generally. This led to a high level of commitment to environmental regulation in particular from as early as the 1990, followed by the release of even more rigorous regulations on environmental protection in the 2000s. However, despite the high commitment made by the Chinese central government, implementation of these policies is quite poor (Bina 2010 ). In terms of environmental regulation, for example, the implementation problems stem from a number of areas, including: the position of environmental protection agencies in the political framework; conflict between central and local governments; and supervision issues. The system of supervision of local environmental departments is a key problem (Bina 2010 ). When an environmental department is set up in the central government, corresponding environmental departments are set up in local governments. Ideally, these local departments should be agencies of the central department, deliver the central environmental department’s strategies, and supervise local environmental protection implementation. In reality, the local environmental departments are subservient to the local rather than central governments. All their financial support and staff appointments come from local governments. Therefore, rather than supervising local environmental protection implementation, the local environmental departments become “rubber stamps” for local governments (Zheng 2010 ). Therefore, it is unlikely that there will be efficient enforcement of environmental laws, regulations and policies at the local level (Bina 2010 ; Zheng 2010 ).

Finally, as China heads towards a market economy, government intervention becomes a policy choice, and markets function as a tool of national interest (Zhao 2011 ). However, as Chinese firms become more involved with foreign trading partners and markets, their reporting activity is also influenced by foreign and global organisations, leading to potential tension between demonstrating commitment to state ideological goals and meeting the requirements of global stakeholders.

Given the complexity of the context, research into CSR reporting in China needs to take into account the specific aspects of Chinese politics and culture in order to provide a nuanced understanding, and ultimately an improvement, of CSR reporting activities. However, a review done of the literature on CSR in by Chinese showed that it is very descriptive with little depth and much of the CSR literature is conceptual, descriptive, or argumentative in nature (Guan and Noronha 2013 ). The authors noted proper research methodologies are not systematically applied in some studies, and supporting theories are lacking. In the non-Chinese studies on China, there is also a predominance of papers on determinants and volume of reporting (Situ and Tilt 2012 ), with very few considering broader contextual factors, other than a few that look at specific cultural attributes (e.g., Rowe & Guthrie 2009 ).

Sociocultural understandings

Notwithstanding a move towards a market orientation of many developing countries, such as in China as outlined above, conceptions of CSR by management of companies in these countries may be quite different to those in the West (Wang and Juslin 2009 ). These differing conceptions may be a result of differing values and attitudes, language, religion or identity. Even specific elements of CSR are conceived of differently, for example in China, the main understanding of sustainability is in terms of environmental protection (Situ et al. 2013 , 2015 ). These socioculturally derived understandings are inevitably reflected in their reporting.

In another example, in the Middle East, the predominant perception of CSR is that it simply means philanthropic donations. In this region, the issue of social responsibility is relatively new, and as such the number of studies of CSR and CSR reporting in the Gulf region is growing (Al-Khatar and Naser 2003 ; AlNaimi et al. 2012 ; Emtairah et al. 2009 ; Mandurah et al. 2012 ; Marios and Tor 2007 ; Minnee et al. 2013 ; Nalband and Al-Amri 2013 ; Naser et al. 2006 ; Naser and Hassan 2013 ; Qasim et al. 2011 ; Sangeetha and Pria 2012 ). Many of these studies do not consider the cultural context to a very great extent as the research is emerging and focusses on perceptions. For example, Mandurah et al. ( 2012 ) and Emtairah et al. ( 2009 ) explored managerial perceptions of the concept of CSR in Saudi Arabia and found that managers are aware of the concept, but there is little connection between the managerial level perceptions and firms’ workforce. The authors describe CSR as being in its infancy phase, which limits the understanding of the concept to the view that CSR simply means being philanthropic. This indicates a different, and perhaps less developed, understanding of the concept in the region compared with the West, but the reasons for this, and the consequences for CSR reporting, are under-explored. Some authors suggest the narrow use of the term is because of the religious obligations towards society, (Visser 2008 ). There is only minimal evidence of any CSR practices other than philanthropy-based or any strategic approaches to CSR for long-term benefits (Visser 2008 ), but the trend is increasing and the forms that philanthropy takes is expanding.

It has also been argued that politics plays a significant role in increasing the awareness of CSR in the Arab world. Avina ( 2013 ) suggests that the perception of CSR in the Middle East changed after the Arab spring event, for both local and international firms. The term CSR more than a decade ago had little meaning to the public (Visser 2008 ) but since the Arab spring, the sense of social responsibility among civil society and the corporate sector has increased Avina 2013 ). Firms realised that they play a role in social responsibility, not just governments, and recognised that CSR should go beyond just donations to charitable causes (Avina 2013 ). Ronnegard ( 2013 ), however, predicts that CSR in the Middle East will not mimic the Western concept because of the strong influence of culture and religion in the region. Moreover, the influence of stakeholders in the Middle East is considered to be limited due to there being a lack of free press, few lobby groups and the different cultural attributes of employees and consumers. Some studies in Gulf countries have however, suggested that stakeholders, such as government and charitable organisations, may have an impact on firms’ behaviour (Emtairah et al. 2009 ; Naser et al. 2006 ). Others suggest that CSR may have developed as a concept due to the increase of foreign direct investment into Arab countries, the trend of shifting family and government owned firms into the public domain, and the globalisation of the region’s large national firms.

From the limited studies that have been undertaken, there is evidence of CSR reporting by Gulf country companies, with human resources and community involvement being the dominant themes in may reports Abu-Baker and Naser 2000 ). Thus, understanding of motivations for CSR reporting is not yet well developed and few existing studies consider the different level of stakeholder pressure in the region. This suggests that more research is needed on the formation of notions of CSR within specific contexts. This region is of particular interest because, according to the Human Development Report (HDI 2013 ), countries in the region are classified as high, or very high, in human development. That is, they are not only trying to develop and improve their economy, but are also trying to improve the quality of life of their citizens (Ramady 2010 ). The overall outlook of these countries indicates that they are performing well, however, Fadaak ( 2010 ) notes that identifying poverty lines is a challenge because of a lack of a clear definition of poverty in the region. There are no official reports considering poverty or other social problems and no GCC (Gulf Cooperation Council) countries were found in the list of the World Bank Database in relation to the poverty rate.

Similarly, in other developing countries the importance of local economic, cultural, and religious factors that shape the business environment, and understandings of charity and philanthropy, need to be taken into account. Empirical work in this area is lacking (Lund-Thomsen et al. 2016 ). In Sri Lanka, for example, “the most common arguments used to ‘sell’ the business case for CSR and CP [Corporate Philanthropy], for example an improved brand image, increased market or customer share, employee retention, mitigated regulatory risks, and reduced tax burden, are considered mostly irrelevant” (Global Insights 2013 : p1). Business leaders engage in CSR for a range of business, humanitarian, social, religious, and political reasons. Key amongst them is a belief that ‘giving back’ to society discharges religious obligations to the poor, and an awareness that being seen to contribute to national development goals is important (Global Insights 2013 ). Hence, the conception of CSR in this region is culturally determined, but also shaped by the economic environment.

• Economic development

As well as government control, culture and political factors, the stage of economic development a country is in is also an important contextual factor that may impact CSR reporting. In China, as discussed above, the drive for economic reform led directly to environmental impacts which needed to be addressed. A number of other developing countries have been examined for their reporting on CSR issues, particularly from the Asian region (Andrew et al. 1989 ; Elijido-Ten et al. 2010 ), India (Mishra and Suar 2010 ; Raman 2006 ; Sahay 2004 ), and Bangladesh (Belal and Owen 2007 ; Belal and Roberts 2010 ; Khan 2010 ; Muttakin et al. 2015 ).

While these countries are classified as developing (IMF 2015 ), Bangladesh and India score only medium for human development. Another country in the region, Sri Lanka, has a high rating on the HDI, and has been exhibiting extensive growth since the end of a 30-year war (WPR 2015 ). Thus, exhibiting both economic and social growth aspects makes it an interesting case for studying CSR.

Sri Lanka has a population of over 20 million and foreign companies have increased their investments with one billion US dollars in direct foreign investments in 2013 alone ( BOI ). Classified as a middle income developing country, the challenge for Sri Lanka is to achieve high economic growth without causing irreversible damage to the environment and while continuing to eliminating social issues such as poverty, malnutrition and poor workplace ethics (Goger 2013 ). In addition, Sri Lanka also has a long history of corporate philanthropy, largely led by individuals whose values and actions stem from religious and cultural views (Beddewela and Herzig 2013 ) but has recently seen an increase in private firms offering development-related initiatives. Public infrastructure projects have been the main element of post-war economic planning, but there still remains rural poverty in the country. Thus, the primary motivation for CSR and philanthropy in Sri Lanka is poverty reduction, particularly for children and youth, social welfare organisations like orphanages and elderly homes, hospitals and health services, and veterans’ charities (Global Insights 2013 ). Thus, the economic, cultural, and political context means that these poverty rates have fallen (data indicates that the rate went from approximately 20 % in 2000 to under 9 % in 2013) and that inflation has slowed (Wijesinha 2014 ), so opportunities for private businesses to contribute to infrastructure abound. However, these private, development-orientated, CSR initiatives have often failed to deliver their aims and there is considered to be a danger that they may in fact perpetuate the causes of poverty and ethnic and religious conflict given their ties to particular ethnic groups (Global Insights 2013 ).

Notwithstanding this environment, the topic of CSR reporting in Sri Lanka has received relatively little research attention compared to other parts of the world (see Belal and Momin 2009 , for a review). In terms of motivations for CSR, there is some evidence that firms in which senior management have a positive outlook towards social and environmental practices tend to disclose more on these aspects, as compared to other firms (Fernando and Pandey 2012 ). However, reporting on CSR initiatives is not mandatory thus it is likely that any voluntary reporting by Sri Lankan firms will vary significantly. One study of reporting was conducted by Senaratne and Liyanagedara ( 2012 ) who examined the level of compliance with Global Reporting Initiative (GRI) guidelines in the disclosures of publicly listed companies, selected from seven business sectors. The authors conclude that the level of compliance with the GRI is low and that disclosures vary significantly amongst the companies, potentially reflecting varying commitment to CSR. Similarly, a longitudinal study across five years (2005–2010) was carried out by Wijesinghe ( 2012 ) to identify trends in CSR reporting in Sri Lanka and the study identified an increasingly positive trend, predicting similar levels of disclosures provided by companies in developed countries. The few studies that have been conducted examining the predominance of reporting in Sri Lanka, mostly examining multinational companies, conclude that CSR reporting is gaining momentum in Sri Lanka but is still emerging as the concept of CSR itself emerges (Beddewela and Herzig 2012 ; Hunter and Van Wassenhove 2011 ).

Conclusion and a future research agenda

As more and more research on CSR in developing countries emerges in the academic literature, it is important to ensure that appropriate consideration is given to the context in which the research takes place. Examination of CSR and CSR reporting practices without contextualisation could perpetuate flawed understandings that are based on evidence from research in the developed world. Different political, social, cultural and economic environments impact on the both the development of, and reporting of, CSR activities and consequently impact on the value of these activities to benefit society and the natural environment.

A suggested agenda for future research, that considers context in more depth, includes:

Consideration of ideological and hegemonic regimes and their attitude towards CSR. This research would consider potential positive and negative impacts of the political and governance system. In China, for example, the potential for Communist Party ideology to increase environmental protection and improve social conditions is vast, and is starting to be seen to have a strong impact on firm behaviour. Examination of this over time will provide an important contribution to understanding the role of government beyond the more common analysis of environmental protection regulation.

Greater examination of sociocultural variables in different countries, beyond analysis of religious influence, and beyond the use of Hofstede. Understandings of concepts such as CSR in countries in Asia, the Middle East and the Asian sub-continent, are known to differ from those in the West, so understanding their potential to lead to better (worse) CSR outcomes is important. The variety of variables that could be included is vast, but some clearly important issues include: language, secularism, freedom of the press, access to information, homogeneity of values and attitudes, and the existence of a national figurehead or identity.

Longitudinal examination of the process of economic development. Countries where the economy is developing rapidly, such as China and the Middle East; and countries where the historical economic context differs dramatically, such as in Sri Lanka where the need for development is borne out of conflict, provide rich backgrounds to consider how CSR is developing alongside economic developments.

A comprehensive framework for examining these, and other, potential factors that influence CSR and CSR reporting in developing countries does not exist, but Table  1 attempts to provide a preliminary outline of some factors that could comprise such a framework, and be used to guide future research. As mentioned earlier, it is important to note, however, that these variables are not discreet and are likely to interact with each other. This is noted in the table as a reminder that the classifications are somewhat artificial and that acknowledgement of a more holistic consideration is important.

These are clearly only a selection of opportunities for CSR research on developing nations and emerging economies. Calls for more work on these factors have continued since Adams’ ( 2002 ) original call, but there is still vast scope to improve our understanding of CSR practice throughout the world (Fifka 2013 ), where much of the social and environmental damage is taking place.

Importantly, research of this kind must be transdisciplinary as perspectives from areas such as political science, philosophy and economics are essential. Only with in-depth, contextualised understandings can improvements to the nature of CSR activity be implemented.

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Acknowledgements

It is important to acknowledge that this paper provides an overview of a larger research program currently being undertaken by a team of doctoral students at Flinders University and the University of South Australia. Credit must be given to Ms Hui Situ (Flinders University) who is researching environmental reporting in China, Mr Abdullah Silawi (Flinders University) who is researching social responsibility reporting in the Gulf region, and Ms Dinithi Dissanayake (University of SA), who is researching environmental disclosure in Sri Lanka.

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Exploring the factors affecting the implementation of corporate social responsibility from a strategic perspective

• Chao-Chan Wu   ORCID: orcid.org/0000-0002-3891-310X 1 ,
• Fei-Chun Cheng 2 &
• Dong-Yu Sheh 1  

Humanities and Social Sciences Communications volume  10 , Article number:  179 ( 2023 ) Cite this article

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In general, the objective of a company is to pursue higher returns for its shareholders. Corporate social responsibility (CSR) is an ethical practice that seems to be contrary to the objectives of companies; as a result, companies lack sufficient motivation to implement CSR. Academics and practitioners have recently begun considering CSR from a strategic perspective. However, the definition and scope of strategic CSR have not been clearly defined or discussed in previous studies. This study uses the strategic triangle perspective as a theoretical basis to explore the key factors affecting the implementation of strategic CSR. Three main factors and ten sub-factors were summarized to form a hierarchical network structure based on a literature review. The weights of each factor and sub-factor were then prioritized using the analytic network process (ANP). The results of this study show that “company” is the most important main factor, while “corporate image”, “innovation ability”, “reputation risk”, “financial capacity”, and “investment intention” are the top five important sub-factors. The hierarchical network structure and critical factors suggested in this study contribute to implementing strategic CSR. The findings of this study will also help the theoretical development in the field of CSR.

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Introduction.

The purpose of businesses is to produce products or services that meet consumer demand. However, with the depletion of resources and environmental pollution, people have gradually realized the importance of sustainable development. Furthermore, with better living standards, people pay attention to social issues such as health and human rights. Various factors have led to higher expectations regarding the role of businesses in society (Huang, 2014 ). In addition to their growth, companies need to consider the overall well-being of society and make moral contributions beyond economic and legal aspects. Enterprises are not only economic entities that operate for profit but also exist to create an ideal society (Carroll and Shabana, 2010 ). Therefore, corporate social responsibility (CSR) has become an important research topic in recent years (Yuan et al., 2020 ).

The motivation for CSR implementation changes with the social environment (Bergquist, 2017 ). The goal of an enterprise is to make profits and maximize shareholder value. Thus, it is necessary to establish formal regulations to enforce the implementation of environmental protection and social issues by enterprises. Nevertheless, if CSR is merely a response to legal requirements, companies will not realize the value and benefits of this action. For organizations such as businesses that pursue economic benefits, implementing CSR may be viewed as a cost. This reactive motivation prevents companies from effectively implementing CSR (Bansal, 2022 ).

Social responsibility and corporate benefits do not conflict. This means that companies should not treat CSR as an expense incurred by contributions to fulfill public interest. Instead, companies should transform CSR from an ethical practice to one of their strategies (Porter and Kramer, 2006 ). If CSR is combined with a company’s strengths and strategies, its potential will maximize the benefits to society and the company (Branco and Rodrigues, 2006 ; Yuan et al., 2020 ). A strategic vision of CSR will allow companies to avoid seeing it as a cost or expense when implementing CSR, but will instead consider the relationship between CSR and the company’s core business and how to help the company achieve its strategic goals (Lepoutre and Heene, 2006 ; Manasakis, 2018 ). Strategic CSR can help companies achieve a win-win situation regarding economic benefits and social responsibility.

To implement strategic CSR, companies must identify the capabilities and resources that influence their social responsibility (Branco and Rodrigues, 2006 ). In addition, resources are limited to businesses, so selection and prioritization are important parts of strategic thinking (Porter, 2008 ). Identifying the key factors affecting the implementation of strategic CSR and recognizing the relative importance of these factors will help companies plan their strategic CSR activities. Therefore, it is important to explore the key factors that influence the implementation of strategic CSR. According to the strategic triangle perspective proposed by Ohmae ( 1982 ), the strategic thinking of a business is mainly based on company, customer, and competitor aspects. From the company aspect, the main description is the importance of internal resources in implementing a strategy. The customer aspect focuses on how a company uses its resources to provide attractive products and services to satisfy its customers. The principle of the competitor aspect is that a company should create as much competitive advantage as possible to enable it to compete with its competitors (Ohmae, 1982 ; van Vliet, 2009 ). The strategic triangle perspective can be used to develop a conceptual framework for strategic CSR.

This study aims to explore the key factors affecting the implementation of strategic CSR. Based on a literature review of the CSR concept and the strategic triangle perspective, this study identifies the main factors and sub-factors affecting the implementation of strategic CSR and establishes a hierarchical network structure for these factors. This study then uses the analytic network process (ANP) method to prioritize the relative weights of each factor and sub-factor in the hierarchical network structure. The results of this study contribute to determining the important factors that influence the implementation of strategic CSR to plan relevant strategies.

Literature review

This study examines the key factors influencing companies’ implementation of strategic CSR. In this section, we first review the general altruistic view of CSR. Second, the essence of corporate strategy was discussed within the framework of the strategic triangle. Then, we explain how to incorporate the strategic triangle perspective into the CSR concept to form strategic CSR. Finally, factors affecting the implementation of strategic CSR were selected to build a hierarchical network structure.

The concept of CSR

With the rise in sustainable development, CSR has become a popular topic. CSR means that enterprises are responsible for promoting social interests while pursuing their benefits (Carroll and Shabana, 2010 ; Josiah and Akpuh, 2022 ). The concept of CSR is a company’s response to social welfare and its responsibility to stakeholders affected by its development (Chang et al., 2014 ). CSR is strongly related to customers, investors, the government, and other stakeholders. Companies with social responsibility balance the needs of the company and stakeholders when making decisions so that they can contribute to society and stakeholders while pursuing profits (Hopkins, 2012 ). CSR mainly focuses on the positive actions of enterprises on social and environmental issues while paying attention to the rights and interests of stakeholders. However, it is difficult to link the ethical behavior of these companies to their own operations (Sheh, 2022 ). The traditional concept of CSR focuses on public interest but ignores the necessity of continuous profitability of companies (Matytsin et al., 2023 ). Companies must learn to integrate CSR actions into their operations rather than viewing CSR as additional philanthropy (Zollo, 2004 ). The current meaning of CSR is that companies must voluntarily incorporate social and environmental issues and interactions with stakeholders into their operations (Commission of the European Communities, 2001 ). Therefore, companies must consider both social responsibilities and operational performance, as well as their complementary strengths.

Strategic perspective and CSR

The purpose of strategy is to efficiently achieve the specific goal of an individual or organization, given the resources and capabilities. Strategic thinking integrates internal and external resources to achieve a competitive advantage in an uncertain and high-risk environment (Khalifa, 2020 ). In other words, the execution of strategy considers not only the current state within the company but also the situation of the external environment to choose the most appropriate way to achieve the goal (Hambrick and Fredrickson, 2005 ). Furthermore, Ohmae ( 1982 ) suggests a strategic triangle perspective and indicates that enterprises should focus on three factors when formulating their strategies, including the company, customer, and competitor. Companies must consider their own conditions and customer needs to provide products or services that are consistently better than those of their competitors and consider the interrelationships among the three factors.

In general, companies play a passive role in CSR implementation (Lindgreen et al., 2009 ). The main reason is that companies lack the motivation to implement CSR. The altruistic behavior of a company does not necessarily bring benefits to the company, and even the implementation of CSR conflicts with corporate profitability (Sprinkle and Maines, 2010 ). In this context, CSR is more of a moral act implemented by a company based on social expectations after making a profit. Even when CSR is linked to business operations, companies do not know how to convert it into business value and competitive advantage. If long-term investment in CSR does not give a company a competitive advantage, CSR will likely be seen as the cost of doing business. Companies tend to lack the motivation to implement CSR, which is not conducive to long-term sustainable development. In fact, companies rarely implement social responsibility purely from an altruistic perspective (Wang et al., 2016 ). The core concept of a company is to pursue performance; therefore, companies should rethink CSR through strategic thinking and select social issues or goals that enable them to fully utilize their core competencies to implement CSR (Porter and Kramer, 2006 ). In this way, companies can turn social responsibility issues into business opportunities, creating more benefits and competitive advantages (Drucker, 1984 ; Padgett and Galan, 2010 ; Manasakis, 2018 ).

Previous studies have mentioned that it is necessary to use a strategic perspective to examine CSR (Porter and Kramer, 2006 ; Wang et al., 2016 ). When thinking strategically, companies usually need to consider how they are positioned against their competitors and how they can use their resources and capabilities to achieve their goals (Porter and Kramer, 2002 ). In other words, companies must assess their internal resources and capabilities, evaluate the stakeholders and competitors involved, and develop appropriate strategies to achieve the desired CSR outcomes (Husted and de Jesus Salazar, 2006 ). Nevertheless, strategic CSR remains a relatively abstract concept requiring further exploration of its specific elements and components.

Therefore, the strategic triangle perspective can be used to establish the structure of strategic CSR and to form a precise concept. From a strategic triangle perspective, companies must take stock of their core competencies and resources, and then consider how to meet the needs of their customers. By integrating this perspective into CSR, strategic CSR can impact customers and stakeholders related to the company. Based on the above discussion, this study explicitly focuses the concept of strategic CSR on three main factors, including company, stakeholder, and competitor. The company factor refers to the resources and assets owned by the company, the stakeholder factor refers to stakeholders who interact with the business, and the competitor factor refers to the competitive advantage over competitors (Husted and Allen, 2007 ). The three main factors that affect the implementation of strategic CSR and the sub-factors within these main factors were discussed below.

From a strategic triangle perspective, the resources within a company can be considered the basis for strategy execution. According to the resource-based theory, valuable resources are the main source of a company’s competitive advantage (Barney, 1991 ). Promoting CSR is not only the responsibility of senior management or specific departments but also the recognition and participation of all employees in the company. Hence, human resources play an important role in CSR implementation (Arnaud and Wasieleski, 2014 ). Adequate professional manpower is a condition for companies to implement CSR (Meyer, 1999 ; Cohen et al., 2010 ). It ensures that sustainability-related strategies and proposals are sufficiently driven to help organizations achieve their goals and ultimately improve their effectiveness (Paillé et al., 2014 ; Voegtlin and Greenwood, 2016 ).

In addition to human resources, companies with sufficient financial resources to support the execution of operational strategies can significantly increase their likelihood of achieving their goals. Similarly, CSR implementation requires sufficient financial capacity (Branco and Rodrigues, 2006 ; Lepoutre and Heene, 2006 ). Moreover, the Fortune 500 spent $19.9 billion on CSR-related activities (Business Backs Education, 2015 ). This not only shows the importance that companies attach to CSR but also reflects that the implementation of CSR requires considerable financial resources.

On the other hand, corporate image is more abstract than other tangible resources because it is an overall performance composed of many factors related to a company (Moon, 2007 ). It is most widely defined as the reputation of a company, the overall impression of the company in the public’s minds (Agyei et al., 2014 ; Huang et al., 2014 ; Li et al., 2022 ). A great corporate image can be built based on a company’s ability, that is, the reputation that a company has built by consistently providing high-quality products or services. Thus, corporate image can also be derived from a company’s contribution to CSR (Vo et al., 2019 ). The image formed by CSR refers to the subjective feelings, attitudes, and evaluation of the public towards the social responsibility implemented by the company (Berens et al., 2005 ; Pérez and Rodríguez del Bosque., 2013 ). By engaging in charitable activities, such as protecting the environment, caring for community issues, and making charitable donations, a company can strengthen its public perception. A company’s image can be used as intangible capital for future public relations strategies to help it gain a competitive advantage.

Accordingly, human resources, financial capacity, and corporate image were adopted as sub-factors within the main factor of company in this study.

Stakeholder

In conventional business operations, a company operates by meeting its customers’ needs, and the results are ultimately reflected in its performance. As the external environment becomes more complex, the actual operation of a company will involve not only customers but also individuals or groups such as investors, media, and governments, all of whom will be affected by the company’s actions or influence its decisions (Freeman, 1984 ). In general, business strategy mainly focuses on the customer aspect, but strategic CSR affects a wider group of people than traditional strategies. According to previous studies, CSR has a significant relationship with corporate performance and stakeholder responsiveness (Alniacik et al., 2011 ; Ansu-Mensah et al., 2021 ). This means that companies can communicate with more stakeholders through CSR implementation (Manasakis, 2018 ). Several stakeholders that may influence CSR implementation, such as consumers, inventors, media, and governments, were discussed below.

First, Bhattacharya and Sen ( 2004 ) suggest that consumers consider a company’s actions towards the environment and society when making purchase decisions and state that CSR actions can increase consumers’ willingness to purchase a company’s products or services. When a company focuses on and contributes to a specific issue, consumers will likely translate their support for the issue into a willingness to buy its products (Thi et al., 2020 ; Zhang, 2022 ). Companies can choose to invest in CSR because consumers will respond to their efforts on social and environmental issues with a higher willingness to buy (Bhattacharya and Sen, 2004 ; Walker et al., 2021 ).

Second, investors must consider various factors when selecting investment targets. The reason why investors are willing to invest their capital in a company depends mainly on its profitability (Lin et al., 2018 ). Companies that contribute to CSR can manage their relationships with employees, suppliers, and other stakeholders, resulting in more stable operational and financial performance (Platonova et al., 2018 ). Moreover, companies that do not integrate environmental and social issues into their business models have a higher chance of being sanctioned by the government or law, including fines and litigation dilemmas, as well as loss of profits due to revelations of corporate misconduct or the outbreak of major industrial and environmental accidents (Brown, 1997 ). A Company that integrates CSR into its business strategy is less susceptible to negative events, convincing investors that it is a better investment target than its competitors.

Third, with the boom in information technology and media, the public has much faster and easier access to information than in the past, and both positive and negative news can be disclosed at the first opportunity (Dhëmbo et al., 2021 ; Fortunato and Pecoraro, 2022 ). The more prestigious a company, the more likely it is to receive media attention and be maliciously attacked by negative media. Companies that are good at preventing reputation risks use the media as a stakeholder to avoid damaging their reputation and improve their ability to respond to external events by voluntarily implementing CSR (Diageo, 2005 ; Unerman, 2008 ). In addition, by evaluating the results of their investments in social and environmental issues, companies can diagnose the potential risks that may arise in their operations and formulate timely improvement plans to avoid reputational damage (GRI, 2002 ).

Finally, the government is an important stakeholder that can force companies to implement CSR (Zueva and Fairbrass, 2021 ). From a strategic perspective, CSR is more than a passive response to regulatory pressure. By proactively engaging in CSR, companies can build bridges and maintain good relationships with the public sector, thereby increasing their influence on public decision-making. CSR increases trust between businesses and the government; helps companies obtain licenses, permissions, and other official documents faster and more smoothly; and avoids redundant bureaucratic costs (Mathis, 2008 ).

Based on these arguments, this study includes purchase intention, investment intention, reputation risk, and government relations as sub-factors within the main factor stakeholder in the hierarchical network structure.

According to the strategic triangle perspective, companies achieve superior financial performance by leveraging their strengths to satisfy their customers while creating a relative advantage over their competitors (Ohmae, 1982 ). In the competitor aspect, the factor that affects a company’s profitability is the price of product relative to the competitor. CSR is an important evaluation criterion for consumers when making purchases. Companies can make consumers perceive that they are concerned about social issues through CSR, which affects consumers’ perceptions of products (Bhattacharya and Sen, 2004 ). Even though not everyone is willing to pay a higher price for the products of companies that implement CSR, for advocates of social and environmental issues, paying a price premium can symbolize their concern and support for a particular issue and serve as a reward for responsible companies (McGoldrick and Freestone, 2008 ). Accordingly, companies can use this feature to set higher product prices (Danko and Nifatova, 2022 ).

Companies that have already established positions in a specific industry must protect themselves from potential competitors and maintain their market share. From a traditional strategic perspective, companies usually adopt cost-cutting strategies to take advantage of price wars to defeat competitors or invest more resources in research and development to build barriers to entry into the industry (Porter, 2008 ). Furthermore, Buccella and Wojna ( 2017 ) suggest that incumbent companies in the industry can regard CSR as a moat against potential competitors and turn it into a weapon to maintain their market position.

On the other hand, a company’s growth is driven by the continuous development of new products or the improvement of existing business models. Innovation ability has become one of the most important strategic considerations in companies’ decisions (Chkir et al., 2021 ). Innovation ability is the driving force behind the implementation of CSR if companies can integrate CSR thinking into their products (Padgett and Galan, 2010 ). Companies that implement CSR are better able than their competitors to use efficient processes for product development and manufacturing (Husted and Allen, 2007 ).

Based on the above points, this study summarizes price premium, entry barrier, and innovation ability as sub-factors within the main factor competitor.

Methodology

The hierarchical network structure.

When applying ANP, the decision problem needs to be clearly structured, and the interrelationships between the factors must be presented in a network manner. The hierarchical network structure can be established mainly through the literature review and the opinions of experts in the field, which contains goal, main factors, and sub-factors (Saaty, 2005 ). This goal indicates that a decision problem must be resolved. The main factors, sub-factors, and interdependencies among factors can be obtained by reviewing the literature and collecting expert opinions on the decision problem (Saaty, 2004 ).

This study aims to identify the factors that may affect the implementation of strategic CSR. Based on the literature review, three main factors and ten sub-factors were obtained to construct the hierarchy. The main factors contain company, stakeholder, and competitor. Company consists of three sub-factors, including financial capacity, human resources, and corporate image. Stakeholder has four sub-factors, including purchase intention, investment intention, reputation risk, and government relations. Competitor has three sub-factors, including entry barrier, price premium, and innovation ability. Then, this study collects expert opinions on the interdependence of factors through questionnaires to form a network structure based on Ngeru et al. ( 2011 ). To ensure that the experts are sufficiently professional and to improve the quality of the data collected, they were selected from among professionals with experience in the field of CSR. A total of twelve experts have an average of 10 years of experience in public relations, consulting, manufacturing, and financial industries, and they are all engaged in CSR-related work in these industries. Twelve questionnaires were distributed and collected, with a 100% return rate. Finally, a hierarchical network structure, including the interrelationships among factors, was established, as shown in Fig. 1 . The operational definitions of the three main factors and ten sub-factors were described in Tables 1 and 2 .

It includes three main factors, ten sub-factors, and the interdependence of factors.

The procedure of ANP

ANP is a scientific approach to decision-making when factors have dependencies and feedbacks, and is an extension of analytic hierarchy process (AHP) (Saaty, 2004 ). One of the assumptions of AHP is that the factors are independent of each other (Stein and Ahmad, 2009 ). However, in reality, many decision problems cannot be structured hierarchically because elements in the hierarchy involve many interactions and interdependencies. Therefore, the structure of ANP usually includes many networks of elements with interdependent relationships, which makes analysis results more realistic (Lee and Lee, 2012 ). The reason for adopting ANP in this study is that it addresses the complexities of implementing strategic CSR and provides best possible outcome for decision-making. The specific steps of ANP were shown as follows (Chung et al., 2005 ).

Step 1: Constructing the pairwise comparison matrix

In this step, a series of pairwise comparisons were conducted to determine the relative importance of factors. Paired comparisons are two-by-two comparisons of factors based on ANP questionnaire, which uses a scale of one to nine as proposed by Saaty ( 2005 ). As shown in Table 3 , a score of 1 means that two factors are equally important to each other, while a score of 9 means that one factor is extremely important compared to the other. And then, the experts in the given field were asked to judge the relative importance between factors in the questionnaire.

The pairwise comparison matrix was obtained by the judgments of experts using ANP questionnaire. If pairwise comparison matrix M is an n  ×  n matrix, then n ( n  − 1)/2 ratings should be calculated. The matrix M was established as below (Saaty, 2004 ).

where b ij is the comparison value of factor i and factor j for one expert, b ij  > 0; b ji  = 1/ b ij ; i, j  = 1, 2,…, n .

Step 2: Calculating priority vector and eigenvalue

The priority vector (also called eigenvector) and eigenvalue of each pairwise comparison matrix in ANP can be derived as in AHP by solving the following formula (Saaty, 2005 ).

where M represents a pairwise comparison matrix, w is the priority vector (eigenvector), and λ max is the largest eigenvalue of M . The priority vector w and the eigenvalue λ max can be computed by the following sub-steps (Al-Harbi, 2001 ).

Step 2-1: Dividing each comparison value of matrix M by the sum of its column to produce the normalized pairwise comparison matrix.

Step 2-2: The priority vector w can be calculated by dividing the sum of each row in the normalized pairwise comparison matrix by the number of factors in the matrix.

Step 2-3: Firstly, multiplying matrix M by priority vector w to generate the vector Mw . And then, divide the values of the vector Mw by their respective values of priority vector. Finally, the eigenvalue λ max can be calculated by averaging the values generated above.

Step 3: Consistency test

The consistency test must be implemented to ensure that there are no logical fallacies in the judgments. The consistency index (CI) and consistency ratio (CR) can be utilized to check the consistency of each matrix. The CI was formulated as follows (Saaty, 2005 ).

where n is the number of factors.

And then, the CR of each matrix can be computed as below (Saaty, 2005 ).

where the random index RI represents the random consistency of various size of matrices. The values of RI were shown as Table 4 . If CR is less than a threshold value, then the matrix has acceptable consistency. The thresholds value proposed by Saaty ( 2005 ) is 0.1.

Step 4: Building the supermatrix

To address the dependencies between factors in the research framework, ANP uses supermatrix to calculate the relative weights of factors. A supermatrix consists of a combination of sub-matrices, each of which contains dependencies of elements within each cluster and is compared cross-cluster with elements from other clusters. If there is no correlation between the elements, the pairwise comparisons in the sub-matrices are equal to zero (Saaty, 2005 ). In this study, the main factors represent clusters and the sub-factors represent elements.

As shown in Eq. ( 5 ), W ij is the eigenvectors generated by comparing the element in cluster i with the element in cluster j . If the cluster j has no effect on the cluster i , the value is equal to zero. The structure of supermatrix is generated based on this logic (Saaty, 2004 ).

The standard form for a supermatrix was shown in Eq. ( 6 ) (Saaty, 2004 ). In general, each column of this matrix is not normalized or equal to one, which makes this matrix an unweighted supermatrix.

where C h is the cluster of a decision system; h  = 1, 2,…, n , and each cluster h has m h elements, denoted by e h 1 , e h 2 ,…, e hmh .

The supermatrix needs to be column-stochastic in order for convergence to occur. To achieve this, the weighted supermatrix W’ was established after the normalization (Saaty, 2004 ). Furthermore, it is necessary to raise the weighted supermatrix to exponential powers in order to reach stabilization or convergence. The resulting matrix is called limit supermatrix W limit , as shown in Eq. ( 7 ) (Saaty, 2005 ). The form of limit supermatrix is the same as the weighted supermatrix, but each column of the limit supermatrix is the same. Finally, the global weight of each factor can be obtained in the limit supermatrix.

where k is an arbitrarily large number.

This study examines the important factors for companies to implement strategic CSR. As companies consider many aspects in practice, and each factor may be related, ANP was used to obtain the relative weight of each factor. The weights of factors in the hierarchical network structure were generated according to the steps proposed in the methodology section.

In step 1, a series of pairwise comparisons were conducted to construct pairwise comparison matrices. Paired comparisons are two-by-two comparisons of factors based on ANP questionnaire using the scale of 1 to 9 shown in Table 3 . The experts were asked to make three levels of pairwise comparisons in the questionnaire, including the comparisons between main factors, comparisons between sub-factors within each main factor, and comparisons of dependencies for main factors or sub-factors. A total of fifteen experts working in the field of CSR were selected to fill out the questionnaire. These experts have an average of 12 years of CSR-related experience, with ten from industry and five from academia, as shown in Table 5 . After collecting fifteen questionnaires, the data were imported into Excel to form the pairwise comparison matrix of each expert. Next, the pairwise comparison matrices of fifteen experts were integrated into the aggregated pairwise comparison matrices using the geometric mean method, and then imported into Super Decisions V3.2 software for subsequent analysis. Table 6 presents the aggregated pairwise comparison matrix of main factors. Table 7 , Table 8 , and Table 9 describe the aggregated pairwise comparison matrices of sub-factors within each main factor, respectively.

In step 2, the priority vector and eigenvalue λ max of each pairwise comparison matrix was computed by Eq. ( 2 ) using Super Decisions V3.2 software. And then, CR value of each matrix was calculated by Eqs. ( 3 ) and ( 4 ) in step 3. The priority vector and CR value for each matrix was also shown in Table 6 , Table 7 , Table 8 , and Table 9 . Since all CR values are less than 0.1, the consistency of each matrix is acceptable (Saaty, 2005 ). Finally, the limit supermatrix was generated based on Eqs. (6) and ( 7 ) in step 4 and shown in Table 10 . Considering the dependencies among factors and sub-factors, the global weights of sub-factors were computed using Super Decisions V3.2 software.

Table 6 shows the relative importance of three main factors without considering dependencies. “Company” has the highest weight (0.4992), “stakeholder” has a weight of 0.3310, and “competitor” has a weight of 0.1698. Tables 7 to 9 present the relative importance of sub-factors within the main factors of company, stakeholder, and competitor, respectively, regardless of the dependencies. In the “company”, the sub-factor “financial capacity” possesses the highest weight (0.4650). Within the main factor “stakeholder”, “purchase intention” is the most important sub-factor (0.4125). In the main factor “competitor”, the most critical sub-factor is “innovation ability” (0.4783).

The global weights of sub-factors were listed in Table 11 . “Corporate image” has the highest weight (0.1779), followed by “innovation ability” at 0.1653, while “reputation risk”, “financial capacity”, and “investment intention” also have higher weights at 0.1282, 0.1264, and 0.1237, respectively. These five sub-factors are key elements that companies need to consider when implementing strategic CSR. In addition, the three sub-factors at the “company” level account for 0.4028 (0.1264 + 0.0985 + 0.1779) of the global weights. The weights of sub-factors in the “stakeholder” adds up to 0.3766 (0.0944 + 0.1237 + 0.1282 + 0.0303). It can be seen that main factors “company” and “stakeholder” account for nearly 80% of the weight, and these two factors have a significant impact on the implementation of strategic CSR.

This study aims to identify the key factors affecting the implementation of strategic CSR. First, the main factors and sub-factors affecting the implementation of strategic CSR were selected based on a literature review. Subsequently, a hierarchical network structure was constructed for these factors. The ANP method was then utilized to prioritize the relative weights of each main factor and sub-factor in the hierarchical network structure. Based on the results of analysis, this section discusses three aspects of company, stakeholder, and competitor.

“Company” has the highest weight among all main factors in this study. In this main factor, “corporate image” and “financial capacity” are among the top five sub-factors with the highest weights. Primary, “corporate image” has the highest weight among all sub-factors. This finding confirms previous research that corporate image is an important factor related to CSR (Arendt and Brettel, 2010 ; Vo et al., 2019 ). The public’s overall opinion of a company is key to its sustainable operation, and intangible assets such as corporate image can provide the basis for strategic planning. Therefore, building a corporate image is an inevitable incentive for operators when planning CSR strategies.

Furthermore, “financial capacity” is ranked fourth in weighting among all sub-factors. This highlights that the financial resources available to companies impact the implementation of strategic CSR. The result is consistent with previous studies that have made similar arguments about CSR, company size, and financial situation (Branco and Rodrigues, 2006 ; Choi et al., 2018 ). Large enterprises typically have more resources, stable financials, and mature business models than start-ups; therefore, they do not need to worry about the impact of implementing CSR on their financial performance, and their solid foundation increases the likelihood that they will invest in CSR (McGuire et al., 1988 ; Brammer and Millington, 2006 ). Companies should reserve appropriate budgets for CSR strategies in advance according to their financial situation and formulate corresponding CSR strategies based on the available resources.

External groups are one of the factors that influence companies when planning CSR strategies. In this study, “stakeholder” is given secondary weight in all main factors. Among all sub-factors, “reputation risk” within the main factor “stakeholders” has the third highest weight, indicating that companies view CSR as a way of risk management. Avoiding reputational damage is one of the main motivations for enterprises to implement CSR (Branco and Rodrigues, 2006 ; Choi et al., 2018 ). The reason is that if a company’s long-established reputation is destroyed by media coverage, it will cause a great loss to the company. The best way to deal with this risk is to review and improve the company’s negligence in business processes through CSR so that the media cannot criticize the company’s reputation.

“Investment intention” has the fifth highest weighting of all sub-factors. This indicates that when a company pursues its CSR outcome, it is expected to be seen by investors as a company with greater growth potential and ultimately creates higher value for shareholders. This feature allows companies to obtain more capital from investors to support their operational activities and strategic planning (Malik, 2015 ). In fact, CSR investment has already made its mark on the financial market. Investors prefer to invest in responsible companies (Brown, 1997 ; Msiska et al., 2021 ).

Corporate strategy aims to gain a competitive advantage. The second highest weight is given to “innovation ability” among all sub-factors. The result supports the idea that a company’s ability to innovate helps implement CSR strategies and develop more business opportunities by considering the connection to environmental and social issues (Husted and Allen, 2007 ; Padgett and Galan, 2010 ). There is already a precedent for companies combining corporate innovation with social responsibility. Toyota launched a range of innovative vehicles with hybrid fuel and electric engines to address growing environmental concerns and vehicle emissions through product innovation (Iyer and Soberman, 2016 ).

Conclusions

This study integrates the strategic triangle perspective with the concept of CSR to generate strategic CSR and identify the key factors that affect the implementation of strategic CSR. The strategic CSR proposed in this study emphasizes that companies should take the initiative to integrate social responsibility with their own goals and core business while considering internal resources, stakeholders, and the competitive environment to formulate the most appropriate strategic plan. This enables companies to achieve their strategic goals while fulfilling CSR.

This study has several important managerial implications. First, by integrating strategic thinking into CSR, the scope of social responsibility is not only to fulfill the civic duties of enterprises to benefit society but also to maintain relationships with stakeholders and gain competitive advantages. Second, the hierarchical network structure proposed in this study can help CSR practitioners think about strategic CSR from a holistic perspective so that the concept of CSR can be better integrated into business strategies and become an issue to be considered when companies conduct strategic planning.

Third, the findings of this study will enable CSR practitioners to understand the relatively important factors that influence the implementation of strategic CSR and to invest resources and effort in areas related to these key factors. This enables strategic CSR to be implemented more efficiently and ultimately has the greatest impact. Finally, these results help companies comprehend how the implementation of CSR relates to their own goals and performance, and the benefits it can bring them. In this way, CSR will no longer be seen as a cost or expense but as a strategy that can help companies achieve their goals. From this perspective, companies will be more motivated than ever to fulfill their CSR, leading to better social and economic development.

Concerning its methodological contributions, the ANP method has some advantages. Primarily, ANP is an appropriate technique for solving multi-criteria decision-making problems in which there are dependencies among factors. This can simplify complex problems and effectively identify the key factors that affect the implementation of strategic CSR. Next, by applying the ANP method, which combines both qualitative and quantitative information, a precise hierarchical network structure was proposed to systematically examine these factors. Finally, because ANP uses pairwise comparisons derived from the judgments of experts, accurate weights of the main factors and sub-factors can be generated based on professional considerations.

Nevertheless, this study has some limitations that should be examined in future research. Primarily, the main factors and sub-factors were selected from the literature review, which may have confined the range of factors that could be selected. Future research could combine a literature review with other methods, such as focus group, nominal group technique, and in-depth interviews, to identify additional factors. Furthermore, this study uses ANP as a single method to establish a hierarchical network structure for determining the key factors influencing strategic CSR implementation. Future research could further consider the ambiguity associated with the judgments of experts and incorporate fuzzy numbers into the ANP method to evaluate the relative weights of factors.

Data availability

The datasets generated during and/or analyzed during the current study are available from the corresponding author on reasonable request.

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Chao-Chan Wu & Dong-Yu Sheh

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C-CW conceived the study and was responsible for the design and revision of the manuscript. C-CW, F-CC, and D-YS were responsible for collecting data, analyzing data, interpreting results and writing the draft of the manuscript.

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Wu, CC., Cheng, FC. & Sheh, DY. Exploring the factors affecting the implementation of corporate social responsibility from a strategic perspective. Humanit Soc Sci Commun 10 , 179 (2023). https://doi.org/10.1057/s41599-023-01664-4

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Research Proposal: A sensemaking approach of Corporate Social Responsibility

2019, s csmc sm c

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The nail that sticks out: corporate social responsibility and shareholder proposals

• Published: 12 December 2022
• Volume 29 , pages 1575–1618, ( 2024 )

Cite this article

• Michael L. Barnett 1 ,
• Valentin Dimitrov 1 &
• Feng Gao   ORCID: orcid.org/0000-0003-1081-9696 2  

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We investigate whether shareholders consider firms’ performance in corporate social responsibility (CSR) when submitting proxy proposals. We find that shareholders are more likely to propose governance changes when a firm has more CSR strengths and more CSR concerns. The results hold across popular proposal types, different sponsors, and different categories of CSR. We find similar results for social proposals. Although CSR strengths and concerns are not associated with the percentage of votes received in favor of a proposal, the higher likelihood of receiving shareholder proposals translates into a higher likelihood that at least one shareholder proposal receives majority support at the meeting. Our results suggest managers may avoid distinctively strong (and weak) CSR performance to reduce the costs of standing out.

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Corporate Social Responsibility (CSR) Implementation: A Review and a Research Agenda Towards an Integrative Framework

Corporate Social Responsibility (CSR): The Role of Government in promoting CSR

Mandatory CSR and sustainability reporting: economic analysis and literature review

Data availability.

All data used in the paper are publicly available.

Companies publicize their corporate social responsibility (CSR) initiatives in their annual reports and on their websites. For Pepsico, see https://www.pepsico.com/sustainability/overview . For Kimberly-Clark, see https://www.kimberly-clark.com/en-us/esg .

ExxonMobil climate change controversy (Wikipedia), Amazon's biggest, hardest-to-solve ESG issue may be its own workers (cnbc.com) .

We choose a linear probability model because of the well-known incidental variables problem in nonlinear models with fixed effects (Neyman and Scott 1948 ; Greene 2004 ). We also find robust results with logit regressions without fixed effects (Table 3 , Panel C).

MSCI also provides corporate governance ratings. To avoid any mechanical relationship between CSR and the likelihood of corporate governance proposals, we do not include governance ratings in our analysis.

The average firm has a market cap of $6.4 billion, an ROA of 2.6%, a cash flow of 7.6% of the total assets, and a leverage of 21.4%.

The figure is similar when we use three or four knots instead.

The standard deviation of Strengths is 2.000, and the standard deviation of Concerns is 1.498 (see Table 1 Panel C). The change in the likelihood of receiving at least one governance proposal for a one standard deviation change in Strengths is 0.021*2.000 = 0.042. The change in the likelihood of receiving at least one governance proposal for a one standard deviation change in Concerns is 0.032*1.498 = 0.048.

These results are available upon request.

E-index includes four provisions that restrict shareholders’ ability to vote (i.e., staggered boards, limits to shareholder bylaw amendments, supermajority requirements for mergers, and supermajority requirements for charter amendments) and two antitakeover provisions (i.e., poison pills and golden parachutes) (Bebchuk et al. 2009 ).

Another popular governance proposal is to allow shareholders to call for a special meeting. We do not examine this proposal type because it is difficult to ascertain which firms already have this provision in their charters.

A shareholder proposal must gain the support of at least 3% of shareholders to appear in the proxy a second time, 6% for a third, and 10% thereafter.

One standard deviation of relative strengths (concerns) is 1.960 (1.340). A change of this magnitude would increase the probability of a firm receiving at least one proposal by 1.960*0.007 = 0.0137 (1.340*0.027 = 0.0362).

Unconditional probabilities of receiving at least one proposal of a certain type are tabulated at the bottom of Table 5 .

In untabulated results, we also distinguish between proposals made by institutional investors with or without a CSR focus. We consider an institutional investor to have a CSR focus if its website mentions an SRI/ESG criterion for portfolio selection. The results for both types of institutions resemble the ones reported in the paper for all institutional investors.

For a one standard deviation change in CSR strength in community, diversity, and environment, the likelihood of a firm receiving at least one governance proposal is increased by 4%, 2.4%, and 2.3% respectively. For a one standard deviation change in CSR concerns in products, environment, and community, the likelihood of a firm receiving at least one governance proposal is increased by 3.8%, 3.3%, and 2.5% respectively.

For AdjStrengths , this effect is calculated as 1.96*0.006 = 0.012 (1.2%). For AdjConcerns , it is calculated as 1.34*0.010 = 0.013 (1.3%).

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Acknowledgements

We appreciate the constructive comments from Peter Easton (editor) and two anonymous reviewers. We also thank Renee Adams, Divya Anantharaman, Alex Edmans, Fabrizio Ferri, Samir Ghannam, Wei Jiang, Darius Palia, and seminar participants at Rutgers Business School-Newark and New Brunswick, Baruch University, Fordham University, Temple University, 2018 European Accounting Associations Conference in Milano, and 2019 Journal of Accounting, Auditing & Finance Conference in Santiago, Chile, for many helpful suggestions. Ankita Shinde and Zhiwei Xu provided excellent research assistance.

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Appendix 1: Examples of shareholder governance proposals

Example 1 (sponsor unspecified):

SHAREHOLDER PROPOSAL

REPEAL CLASSIFIED BOARD

BE IT RESOLVED, that the stockholders of Spectrum Brands, Inc. request that the Board of Directors take the necessary steps to declassify the Board of Directors and establish annual election of directors, whereby directors would be elected annually and not by classes. This policy would take effect immediately, and be applicable to the re-election of any incumbent director who term, under the current classified system, subsequently expires.

SUPPORTING STATEMENT

We believe that the ability to elect directors is the single most important use of the shareholder franchise. Accordingly, directors should be accountable to shareholders on an annual basis. The election of directors by classes, for three-year terms, in our opinion, minimizes accountability and precludes the full exercise of the rights of shareholders to approve or disapprove annually the performance of a director of directors.

In addition, since only one-third of the Board of Directors is elected annually, we believe that classified boards could frustrate, to the detriment of long-term shareholder interest, the efforts of a bidder to acquire control or a challenger to engage successfully in a proxy contest.

We urge your support for the proposal to repeal the classified board and establish that all directors be elected annually.

Example 2 (an individual sponsor):

PROPOSAL 2 – CUMULATIVE VOTING

Nick Rossi, P.O. Box 249, Booville, CA 95415, claiming beneficial ownership of 500 shares of common stock, submitted this proposal.

RESOLVED. Cumulative Voting. Shareholders recommend that our Board adopt cumulative voting. Cumulative voting means that each shareholder may cast as many votes as equal to number of shares held, multiplied by the number of directors to be elected. A shareholder may cast all such cumulated votes for a single candidate or split votes between multiple candidates, as that shareholder sees fit. Under cumulative voting shareholders can withhold votes from certain nominees in order to cast multiple votes for others.

Cumulative voting won 54%-support at Aetna and 56%-support at Alaska Air in 2005. It also received 55%-support at GM in 2006. The Council of Institutional Investors www.cii.org has recommended adoption of this proposal topic. CalPERS has also recommended a yes-vote for proposals on this topic.

Cumulative voting encourages management to maximize shareholder value by making it easier for a would-be acquirer to gain board representation. Cumulative voting also allows a significant group of shareholders to elect a director of its choice – safeguarding minority shareholder interests and bringing independent perspectives to Board decisions. Most importantly cumulative voting encourages management to maximize shareholder value by making it easier for a would-be acquirer to gain board representation.

Please encourage our board to respond positively to this proposal.

Cumulative voting –

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Barnett, M.L., Dimitrov, V. & Gao, F. The nail that sticks out: corporate social responsibility and shareholder proposals. Rev Account Stud 29 , 1575–1618 (2024). https://doi.org/10.1007/s11142-022-09739-4

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A step-by-step template on starting a purpose-driven CSR program

by Lindsay Nash | Oct 7, 2022 | Article

In this article

• What is corporate social responsibility (CSR)?

The benefits of CSR are innumerable

Step 1: write down a proposed csr strategy or purpose statement, step 2: review any existing csr activities, step 3: finalise your csr strategy with your team and stakeholders, step 4: launch your csr program.

• Step 5: Measure your CSR performance
• Step 6: Iterate and improve to continuous drive impact

“To do good, you actually have to do something.” – Yvon Chouinard

The founder of Patagonia, Yvon Chouinard, stunned and inspired the world recently when he gave away his company to combat climate change and protect undeveloped land across the globe. 

For a half-century, Chouinard and his outdoor apparel company established themselves as the de facto leader in what we now call corporate social responsibility, giving away one percent of its sales for decades, mostly to grassroots environmental activism. 

In his latest move, he’s transferred his ownership of Patagonia, valued at $3 billion, to a trust and nonprofit organisation to ensure the company’s annual profits of some $100 million are used to combat climate change. 

“Instead of ‘going public,’ you could say we’re ‘going purpose,’” Chouinard said in a statement from Patagonia. 

Corporate social responsibility and “corporate purpose” are on the rise, and pioneering leaders like Chouinard are bringing the movement to new heights. Let’s take a look at why CSR matters and how it can impact our business and our world.

Beyond the buzzword: What is corporate social responsibility (CSR)?

Corporate social responsibility and purpose-driven corporate giving programs are not new. In fact, they have been around for centuries. 

In the early 1800s, the advent of purpose clauses began to appear in corporate charters from European churches, colonial and early American municipalities, and business corporations to establish the growing separation between church and state. A shift began to emerge where corporations found new ways of expressing their values and purposes outside of the formal legal charter.

The following Industrial Revolution in the mid-to-late 1800s then heralded new concerns about worker wellbeing. There were growing criticisms of the emerging factory system, which was linked to social ills such as poverty and labour unrest. Labour relations became an important topic at the same time as the emergence of philanthropy, especially in the United States, when business magnates Andrew Carnegie and John D. Rockefeller began donating tremendous portions of their wealth to educational, religious and scientific causes.

In a nutshell, industrialisation could both help and harm society, and corporations began to realise they had a responsibility to positively impact society.  

In our current corporate landscape, corporate social responsibility has been defined as a management concept in which companies integrate social and environmental concerns in their business operations and interactions with their stakeholders. Another way to put it: CSR places the responsibility of impact on the company.

It’s also known as “ the triple bottom line ,” referencing a business’s impact on the three “Ps”: people, profits and the planet. 

Governing bodies such as the United Nations , the European Union and the ISO 2600 on social responsibility have developed frameworks to help guide corporations on purpose-driven initiatives, making corporate social responsibility programs–on any scale–more accessible than ever before.

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Why is corporate social responsibility important? Why should your business or organisation give it any thought? The United Nations explains it perfectly:

“A properly implemented CSR concept can bring along a variety of competitive advantages, such as enhanced access to capital and markets, increased sales and profits, operational cost savings, improved productivity and quality, efficient human resource base, improved brand image and reputation, enhanced customer loyalty, better decision making and risk management processes.”

But, really, it’s about more than a corporate competitive advantage. There is a growing propensity worldwide, and especially prevalent for millenials , to better care for our world, foster environmental sustainability and directly confront the soaring challenges facing humanity. 

More and more, corporations are looking to partner with nonprofit organisations to help increase their social impact. This makes it easy for corporations to hit the ground running with a trusted partner that aligns with their own values.

“While there are many benefits for nonprofits, I have also seen the benefits of corporate groups engaging in such programs,” said Molly Heggeland, with Rise Against Hunger , a nonprofit that engages with corporate partners and their employees to support their mission to end hunger.

“Especially in today’s environment, creating an engaging corporate culture is very important, and by partnering with nonprofits through corporate giving and CSR programs, corporations can make an impact on those they are serving and their employees alike,” Heggeland said. 

“I have been able to see the direct benefits of corporate programs through corporate volunteers packaging millions of meals for children in school feeding programs, employee giving campaigns providing supplies for disaster relief, cause marketing campaigns creating community gardens, and more.”

A step-by-step template for starting a CSR initiative 

As Chouinard tells us, to do good, you actually have to do something . We can talk about CSR and what an impactful initiative it is all day. But you simply have to start it. Your program can be as small as a new purpose statement or as revolutionary as Patagonia’s CSR strategy. It’s up to you, and the first step is simply to get started! It doesn’t have to be perfect to be good. Most of your learnings will be along the way. 

Our world cannot wait.

Here are some steps to help you get started.

This is where you bring together your community and ask what’s important. It’s an excellent time to look through the frameworks mentioned above from the United Nations, the EU, the ISO 2600, or countless other online resources to help you decide what’s most important to your organisation, your community and your stakeholders. 

It should align with your company mission and values, and pull focus to what’s important to you, whether it’s environmental, ethical, economical or philanthropic initiatives. 

It’s likely you’ve practised some form of corporate giving in the past, whether it’s offering employees paid volunteer days, participating in a company-wide GivingTuesday or offering a donation match for philanthropic initiatives. This could also include small, random acts of goodness you see across your team, such as recycling initiatives or small bake sales for a favourite charity in the community. Nothing is too small to consider and include. 

Create a list of what you currently do, and solicit feedback from your team. What promotes engagement? What does your team and company care about? 

Decide what works, and what doesn’t. What provides impact? What doesn’t?

You’ve done your research and defined what’s important to your organisation in driving social impact. Now, it’s time to formalise your plan and present it to your team. This includes stakeholders such as a board of directors, the organisational management team and relevant members of your organisation and community. 

By including your stakeholders from the onset, you’ll enjoy early adoption and excitement over the CSR initiatives. 

Now it’s time for the fun part! This is also the most important step—when you get to the business of actually doing something. Whether your CSR is small or big, this is where you take those first steps. Remember: it doesn’t have to be perfect. 

A few considerations for managing your program successfully: 

• If you are funding various projects, consider corporate giving management software to help you manage your opportunities effectively. With software like Good Grants, you can free up your time and money to focus on making your corporate giving the best it can be.
• Communicate often with your team, shareholders and community on your CSR initiatives. Use social media, newsletters and your website to share your goals, any program updates, and any opportunities for people to get involved.
• Share your CSR successes. Use the power of storytelling to connect with your community. Dig into the data. Share the compelling stories, details and results to drive engagement and increase impact. 
• Involve your employees. “Empower employees to take ownership of the program. Create a CSR committee or sub-committees based on different causes that employees can engage in,” said Heggeland. “Empowering employees to have a say in the nonprofit partners and engagements will increase event participation, employee giving and advocacy. 

Step 5: Measure your CSR performance 

Like any new initiative, it’s important to set up measurable goals for your program so you can evaluate the positive impact along the way. Your stakeholders will want to see any outcomes, and it’s important to provide regular insights and data into the CSR program’s performance.

From community investments to business innovations and social impact, it can be challenging to determine what you want to measure, and how. And this mostly depends on your own CSR goals and initiatives. 

But, there are frameworks that can guide you, including the B4SI framework which works to help companies understand the impact their contributions make to business and society.

Look at what’s measurable in your CSR program. This could be the amount of funding you provide, employee engagement and participation and even your bottom line, including revenues and profits. 

In some countries, it’s mandatory for corporations to publish CSR reports annually. The release of an online CSR report is both great for marketing and public relations and for providing accountability to your stakeholders. 

Step 6: Iterate and improve to continuously drive impact

Your program won’t be perfect out the gate. You’ll have learnings along the way. To drive continuous improvement for your CSR initiatives, solicit feedback from internal and external stakeholders. Create surveys and ask for feedback. It will only help your program in the long run. 

Remember, it takes time to create social impact. Don’t be discouraged if your CSR program doesn’t look like Yvon Chouinard’s at Patagonia. Yes, dream big. Yes, think about the long-term. But, to do good, you actually have to do something. And it all starts with taking that first step.

Learn about our CSR initiatives at Creative Force , the parent company of Good Grants. 

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Related articles, leading the change: fostering dei in nonprofit boardrooms, the pros and cons of dafs for nonprofits , 5 giving trends for earth day 2024.

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5 Examples of Corporate Social Responsibility That Were Successful

• 06 Jun 2019

Business is about more than just making a profit. Climate change, economic inequality, and other global challenges that impact communities worldwide have compelled companies to be purpose-driven and contribute to the greater good .

In a recent study by Deloitte , 93 percent of business leaders said they believe companies aren't just employers, but stewards of society. In addition, 95 percent reported they’re planning to take a stronger stance on large-scale issues in the coming years and devote significant resources to socially responsible initiatives. With more CEOs turning their focus to the long term, it’s important to consider what you can do in your career to make an impact .

Access your free e-book today.

What Is Corporate Social Responsibility?

Corporate social responsibility (CSR) is a business model in which for-profit companies seek ways to create social and environmental benefits while pursuing organizational goals, like revenue growth and maximizing shareholder value .

Today’s organizations are implementing extensive corporate social responsibility programs, with many companies dedicating C-level executive roles and entire departments to social and environmental initiatives. These executives are commonly referred to as a chief officer of corporate social responsibility or chief sustainability officer (CSO).

There are many types of corporate social responsibility and CSR might look different for each organization, but the end goal is always the same: Do well by doing good . Companies that embrace corporate social responsibility aim to maintain profitability while supporting a larger purpose.

Rather than simply focusing on generating profit, or the bottom line, socially responsible companies are concerned with the triple bottom line , which considers the impact that business decisions have on profit, people, and the planet.

It’s no coincidence that some of today’s most profitable organizations are also socially responsible. Here are five examples of successful corporate social responsibility you can use to drive social change at your organization.

5 Corporate Social Responsibility Examples

1. lego’s commitment to sustainability.

As one of the most reputable companies in the world, Lego aims to not only help children develop through creative play, but foster a healthy planet.

Lego is the first, and only, toy company to be named a World Wildlife Fund Climate Savers Partner , marking its pledge to reduce its carbon impact. And its commitment to sustainability extends beyond its partnerships.

By 2030, the toymaker plans to use environmentally friendly materials to produce all of its core products and packaging—and it’s already taken key steps to achieve that goal.

Over the course of 2013 and 2014, Lego shrunk its box sizes by 14 percent , saving approximately 7,000 tons of cardboard. Then, in 2018, the company introduced 150 botanical pieces made from sustainably sourced sugarcane —a break from the petroleum-based plastic typically used to produce the company’s signature building blocks. The company has also recently committed to removing all single-use plastic packaging from its materials by 2025, among other initiatives .

Along with these changes, the toymaker has committed to investing $164 million into its Sustainable Materials Center , where researchers are experimenting with bio-based materials that can be implemented into the production process.

Through all of these initiatives, Lego is well on its way to tackling pressing environmental challenges and furthering its mission to help build a more sustainable future.

Related : What Does "Sustainability" Mean in Business?

2. Salesforce’s 1-1-1 Philanthropic Model

Beyond being a leader in the technology space, cloud-based software giant Salesforce is a trailblazer in the realm of corporate philanthropy.

Since its outset, the company has championed its 1-1-1 philanthropic model , which involves giving one percent of product, one percent of equity, and one percent of employees’ time to communities and the nonprofit sector.

To date, Salesforce employees have logged more than 5 million volunteer hours . Not only that, but the company has awarded upwards of $406 million in grants and donated to more than 40,000 nonprofit organizations and educational institutions.

In addition, through its work with San Francisco Unified and Oakland Unified School Districts, Salesforce has helped reduce algebra repeat rates and contributed to a high percentage of students receiving A’s or B’s in computer science classes.

As the company’s revenue continues to grow, Salesforce stands as a prime example of the idea that profit-making and social impact initiatives don’t have to be at odds with one another.

3. Ben & Jerry’s Social Mission

At Ben & Jerry’s, positively impacting society is just as important as producing premium ice cream.

In 2012, the company became a certified B Corporation , a business that balances purpose and profit by meeting the highest standards of social and environmental performance, public transparency, and legal accountability.

As part of its overarching commitment to leading with progressive values, the ice cream maker established the Ben & Jerry’s Foundation in 1985, an organization dedicated to supporting grassroots movements that drive social change.

Each year, the foundation awards approximately $2.5 million in grants to organizations in Vermont and across the United States. Grant recipients have included the United Workers Association, a human rights group striving to end poverty, and the Clean Air Coalition, an environmental health and justice organization based in New York.

The foundation’s work earned it a National Committee for Responsive Philanthropy Award in 2014, and it continues to sponsor efforts to find solutions to systemic problems at both local and national levels.

Related : How to Create Social Change: 4 Business Strategies

4. Levi Strauss’s Social Impact

In addition to being one of the most successful fashion brands in history, Levi’s is also one of the first to push for a more ethical and sustainable supply chain.

In 1991, the brand created its Terms of Engagement , which established its global code of conduct regarding its supply chain and set standards for workers’ rights, a safe work environment, and an environmentally-friendly production process.

To maintain its commitment in a changing world, Levi’s regularly updates its Terms of Engagement. In 2011, on the 20th anniversary of its code of conduct, Levi’s announced its Worker Well-being initiative to implement further programs focused on the health and well-being of supply chain workers.

Since 2011, the Worker Well-being initiative has been expanded to 12 countries and more than 100,000 workers have benefited from it. In 2016, the brand scaled up the initiative, vowing to expand the program to more than 300,000 workers and produce more than 80 percent of its product in Worker Well-being factories by 2025.

For its continued efforts to maintain the well-being of its people and the environment, Levi’s was named one of Engage for Good’s 2020 Golden Halo Award winners, which is the highest honor reserved for socially responsible companies.

5. Starbucks’s Commitment to Ethical Sourcing

Starbucks launched its first corporate social responsibility report in 2002 with the goal of becoming as well-known for its CSR initiatives as for its products. One of the ways the brand has fulfilled this goal is through ethical sourcing.

In 2015, Starbucks verified that 99 percent of its coffee supply chain is ethically sourced , and it seeks to boost that figure to 100 percent through continued efforts and partnerships with local coffee farmers and organizations.

The brand bases its approach on Coffee and Farmer Equity (CAFE) Practices , one of the coffee industry’s first set of ethical sourcing standards created in collaboration with Conservation International . CAFE assesses coffee farms against specific economic, social, and environmental standards, ensuring Starbucks can source its product while maintaining a positive social impact.

For its work, Starbucks was named one of the world’s most ethical companies in 2021 by Ethisphere.

The Value of Being Socially Responsible

As these firms demonstrate , a deep and abiding commitment to corporate social responsibility can pay dividends. By learning from these initiatives and taking a values-driven approach to business, you can help your organization thrive and grow, even as it confronts global challenges.

Do you want to gain a deeper understanding of the broader social and political landscape in which your organization operates? Explore our three-week Sustainable Business Strategy course and other online courses regarding business in society to learn more about how business can be a catalyst for system-level change.

This post was updated on April 15, 2022. It was originally published on June 6, 2019.

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