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Corporate social responsibility (CSR) is when a business takes account of the economic, social and environmental impact of the way it operates, over and above its minimum legal requirements.

Examples of CSR activity include:

  • Waste reduction and sustainability
  • Sourcing suitable suppliers
  • Improvement of working standards and conditions
  • Employee volunteering
  • Socially responsible investment
  • Development of employee and community relations.
How does CSR impact employees and employers? 

A CSR strategy is something that business leaders need to consider carefully, and what better way to do that than to involve their employees? Giving your employees a voice can create greater employee engagement, which in turn can boost talent attraction and retention and create employee buy in.

People are a significant part of every business, from the employees to the customers, so it’s important to build a CSR strategy that considers environmental sustainability as well as supplier relationships, business ethics and anti-bribery efforts. When CSR becomes an integral part of a business, it can be built into job descriptions, business objectives and the people strategy.

Why should employers be promoting CSR?

There is more pressure than ever on businesses to demonstrate that they consider their economic, social and environmental impact on the entire value chain. From the raw materials they put in, to the final product they put out (and the packaging they put it out in if applicable), encouraging consumers to also act responsibly is an essential part of good CSR.

Take supermarkets, for example. First, they cut down on plastic carrier bags and the plastic content in their packaging. Then, many went even further and encouraged their customers to bring their own containers to transport their produce home.

Consumers are more aware than ever of the impact businesses have on global warming, and of the efforts of larger businesses to lower their carbon footprints and environmental impacts. According to a poll carried out by Gallup, 67% of people aged 18 to 29 said global warming is a real, man-made, serious threat – compared to 49% of those aged 30 to 49.

As millennials are a significant part of a business’ employee or market base then it is important for a business to showcase a CSR programme of environmental sustainability.

By confirming their CSR approach and practices in a stated policy, businesses can:

  • Demonstrate their values
  • Engage with their employees
  • Show the public how they operate, and
  • Demonstrate how they’re trying to ensure a sustainable future.

At a time when trust in the boardroom and transparency are vital, the impact of the business on the environment must be a key focus of any CSR strategy.

Corporate social responsibility and the law: what are the rules?

There is various legislation concerning the social and environmental aspects of business, including:

  • Working Time Regulations 1998
  • Equality Act 2010
  • Maternity and Parental Leave Regulations 1999
  • Modern Slavery Act 2015
  • Gender Pay Gap Reporting Regulations 2017

Much of the legislation is mandatory for all businesses but some applies only to certain companies. The Gender Pay Gap Reporting Regulations, for example, are only mandatory for employers who have a headcount of 250 or more on the snapshot date of any given year.

However, some employers who are not required to comply with the regulations have opted to voluntarily assess their gender pay gap and even voluntarily publish their figures. This gives their employees a sense of openness and emphasises the importance the company has placed on CSR.

Similarly, the Modern Slavery Act applies only to businesses who supply goods and services in any part of the UK and have a total turnover of at least £36 million per year. Organisations that meet these requirements must prepare a statement for each financial year to show what they’ve done to ensure that slavery and human trafficking is not taking place in its business or supply chains. However, many businesses that do not meet the requirements are still publishing a statement to show the actions they’ve taken.

Assessing the benefits of good CSR

The potential benefits of having good CSR awareness and a robust policy include:

  • Better brand reputation, which can lead to increased sales, better supplier relationships, and improved customer loyalty
  • Cost savings, as reducing resource use, waste and emissions helps to save money as well as the environment
  • Greater ability to attract and retain staff, as people are more likely to want to join and stay with a responsible, sustainable business
  • Growth, as your focus on doing what’s right for people and planet can help open up new business opportunities, particularly around innovative technology.


Author: Rebecca Finlinson, HR Consultant, RSM UK

[email protected] 

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