- Corporate social responsibility (CSR) is the concept that businesses are part of the society and communities in which they operate and have a responsibility to contribute to it.
- CSR drives positive impacts in each organization: This includes and is not limited to supporting nonprofits, caring for the environment, fostering diversity, equity, and inclusion and employing ethical practices.
- Companies with a CSR program can not only help the communities around them, but they can also increase employee engagement and strengthen client trust and loyalty.
Corporate social responsibility (CSR) — also known as “corporate citizenship” — is a cornerstone of how companies operate. It includes the posture companies take within their communities, their relationship with employees and the overall demonstration that companies are interested in more than just profits. Every business should be thinking about CSR and its subsequent implications, as incorporating CSR can directly affect company culture and the surrounding community, as well as increase sales and drive customer loyalty.
Consumers have choices and are choosing to do business with companies that prioritize CSR. Data indicates that up to 90% of consumers place higher trust and do more business with companies that prioritize CSR. In a different study, 55% of consumers reported they would pay more for products and services from companies whose business practices contribute to positive change.
CSR-minded business practices and positive corporate citizenship (such as participating in the community or instituting sustainable practices) have become increasingly important for businesses to consider, not only for the good of local and global communities but also because of the direct business benefits associated with CSR.
Defining corporate social responsibility
CSR is an organization’s responsibility for their overall impact on society. It means a company is accountable for its business practices and actions and helps a company outline a plan for how it will ultimately contribute a positive, meaningful impact to communities.
The definition of CSR stays the same across businesses, but a company’s values, focus and execution may be different. Companies focused on positive corporate citizenship often choose from three main types of CSR, all of which offer different benefits and imperatives for participation.
Types of corporate social responsibility
An increasing number of businesses are focusing on corporate citizenship and integrating CSR initiatives into their business practices. CSR looks different across industries and businesses. Depending on a company’s mission and interests, CSR initiatives will vary. Here are a few common examples of CSR activities:
- Philanthropic efforts: A philanthropic approach to CSR typically involves an organization contributing to a positive cause in an attempt to help solve or alleviate a problem. One example may include a company supporting an environmental nonprofit looking to mitigate the negative impacts of climate change
- Community involvement: CSR initiatives around community involvement include supporting organizations local to the company’s footprint, addressing the local community's needs and issues. This may include volunteering, donating goods and sponsoring events, among other actions.
- Sustainability: Sustainability CSR centers on environmental, social and economic impact. This type of corporate citizenship often includes updating business practices, such as reducing environmental impact and waste, reducing costs to improve operational efficiency and implementing ethical business practices.
CSR initiatives not only improve the local and global communities, but can also have several positive impacts for socially responsible companies.
Corporate social responsibility impacts
Updating business practices to focus on social responsibility is good for creating a better world, and businesses that launch CSR initiatives also stand to reap benefits, regardless of the corporate citizenship strategies they implement.
Social involvement and community relations
Building CSR programs within a business’s community can help organizations strengthen their relationship with local consumers while building a positive business reputation and trust within the community. Establishing relationships with community leaders can raise a business’s profile within a local market and attract and retain customers whose values align with the business's.
Benefits for employees and stakeholders
Businesses have responsibilities to their stakeholders and employees, who are increasingly holding organizations accountable for their practices. CSR initiatives, such as employee volunteering or donations to nonprofits, can help these stakeholders see the direct impact of helping others. CSR programs encourage employees' personal growth and development and directly contribute to higher employee engagement: employees like to see their employers identify with and act on values that align with their own.
Increase in customer loyalty and sales
Over time, continued CSR initiatives can increase customer loyalty and long-term consumer engagement with a brand. This can lead to heightened sales and a growing pool of customers who have become promoters for socially responsible companies. CSR programs can also improve brand image and public reputation. Customers are more likely to switch to a brand that supports a positive cause.
First Republic’s Corporate Social Responsibility
First Republic is committed to positive corporate citizenship through its CSR program. In 2021, First Republic’s initiatives included grants to support existing nonprofit clients, robust digital resources for nonprofit communities and virtual volunteering, as well as expanded health and well-being support to our colleagues.
First Republic Bank believes that its business starts with empowered colleagues who care for and help build strong communities, leading to shared success for shareholders.
To learn more about First Republic's initiatives, visit the corporate social responsibility area of our website.
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