As businesses become more conscious of their role in society, the term “Corporate Social Responsibility” (CSR) has grown in importance and recognition. CSR describes the efforts made by businesses to do more than just maximize profits to shareholders by operating fairly and ethically and contributing positively to the communities and environment in which they run. More and more, individuals are keen on understanding this area – not just from a corporate perspective, but also in terms of personal involvement and impact.
Yet, like any evolving discipline, CSR is rife with its own jargon. Some of these terms can seem interchangeable or even misused at times. For instance, while environmentalists might prefer the term “sustainability,” others might lean toward “social impact” to describe the work both businesses and nonprofits achieve.
While this short glossary of CSR terms a great starting point, it’s essential to recognize there’s no universally accepted set of terms and definitions. It’s all about what fits your work and the context in which you’re operating. And for those thirsty for more, numerous exhaustive lists dive even deeper into the nuances of CSR.
It’s also worth noting that, in recent times, some terms defined below, like “ESG,” have been misrepresented to such an extent that they risk fading from common parlance.
Without further ado, let’s delve into some definitions.
Corporate Social Responsibility Glossary
- Corporate Citizenship: This term implies that businesses are not isolated entities, but rather members of the society in which they operate. It underscores the idea that companies have obligations toward that society, much like a citizen would.
- Corporate Philanthropy: when businesses donate resources (financial, in-kind products and services, and/or human capital) to support and invest in charitable or community causes.
- Corporate Social Responsibility (CSR): The responsibility of enterprises to operate ethically while diminishing negative and creating positive impacts on society and the environment. It’s about how businesses align their values and behavior with the expectations and needs of all stakeholders.
- Environmental, Social, and Governance (ESG): A set of standards for a company’s operations that socially conscious investors use to screen potential investments. While it has faced its share of misuse and backlash, its core concept aligns closely with CSR principles.
- Purpose: A company’s “north star” or reason for existing beyond profits, which provides alignment in operations, supports culture and generates value for and deeper connections with all stakeholders.
- Social Impact: The effect of an activity on the social fabric of communities and the wellbeing of individuals and families.
- Social Return on Investment (SROI): A principles-based method for measuring extra-financial value (i.e., environmental and social value not currently reflected in conventional financial accounts).
- Stakeholder Engagement: The process by which an organization involves individuals, groups or entities who may be affected by the decisions it makes or can influence the implementation of its decisions.
- Sustainability: The practice of meeting the needs of the present without compromising the ability of future generations to meet their needs. It usually encompasses environmental, economic and social dimensions.
- Triple Bottom Line: A framework or theory that recommends that companies commit to focusing on social and environmental concerns just as they do on profits. The three bottom lines are People, Planet and Profit.
“In addition to addressing basic community needs, companies should also consider how they can collaborate effectively with community partners to help create the next generation of their workforce to help strengthen local communities economically, educationally and socially. If your company is creating partnerships that foster opportunities to expose, train and educate the next generation for employment in your industry, then everyone wins.”
— Jennifer Nash, Senior Vice President, Corporate Solutions, Points of Light
How Points of Light Can Illuminate Your CSR Journey
At Points of Light, we believe that the most powerful force in the world is the individual who has realized their power to do good. Our mission is to inspire, equip and mobilize people to take action that changes the world.
If your company is looking to drive genuine change and engage employees in CSR initiatives, we’re here to partner with you on this transformative journey. From consulting on best practices to providing platforms for volunteer engagement, we’re committed to making corporate social responsibility not just a buzzword but a tangible, impactful reality.