Businesses constantly find new ways to appeal to their investors and customers through their mission statements and corporate values. Corporate sustainability and social responsibility are trending phrases, and businesses are beginning to take note on the importance of a strong display of corporate responsibility. These two concepts differ in their definitions and techniques. This article will explain the key differences between corporate sustainability and social responsibility.
Corporate Sustainability
Corporate sustainability refers to a management model that falls under the Environmental Social Governance (ESG) initiative umbrella. Corporate sustainability focuses on growth and profitability in three pillars intending to provide value for stakeholders, the employees, the planet, and the economy. The three pillars of corporate sustainability are:
Environmental
First is the environmental pillar, one of the most talked-about pillars right now. It includes companies’ actions to reduce their carbon footprints, including reducing water usage, recycling, and using sustainable energy.
There are even businesses out there dedicated entirely to the environment. These green businesses use solar power instead of electricity and find ways to reduce their carbon footprints to protect the planet while they remain profitable.
Social
The social pillar refers to a company’s actions to get approval from stakeholders, employees, and the people in the community. Ultimately, businesses need to take care of the people who interact with their businesses. Social pillar actions include offering maternity leave and donating to the community.
Economy
The economic pillar refers to actions taken to implement sustainable business practices and increase profitability in the long term. In addition, the economic pillar includes aligning the values of the stakeholders with how to spend money, making it possible for companies to invest in new sustainability initiatives.
Corporate Social Responsibility
Corporate social responsibility is a broader idea than corporate sustainability; instead of focusing on pillars, it helps a company remain accountable to the public and its stakeholders. In addition, companies with corporate social responsibility operate their business to enhance society overall, making it a long-term strategy that changes.
Comparing Corporate Social Responsibility and Corporate Sustainability
Corporate sustainability and corporate social responsibility ensure that companies uphold sustainability and ethical business practices while remaining profitable. In addition, both initiatives help companies positively impact people and the community around them. It’s important to note that these are not two distinct concepts. Corporate sustainability is a part of corporate social responsibility, but they’re not the same thing.
Differences Between Corporate Sustainability and Corporate Social Responsibility
While corporate sustainability and corporate social responsibility are similar, they have a few key differences.
Past vs. Future
Typically corporate social responsibility looks at the past to see what the business has achieved for society and its communities. On the other hand, corporate sustainability looks toward the future to help come up with new ideas to make the business more sustainable in the long run. Of course, you can also think of corporate social responsibility in terms of the future by finding new ways to help those around you.
The People
The overall goal of both initiatives is to make the world a better place, but they each have individual targets for whose lives they’re improving. For example, corporate social responsibility strategies typically help individuals form opinions about a company. For example, how you treat your employees can help improve your public image. On the other hand, corporate sustainability initiatives focus on the entire value chain, including everyone from the employees to the customers and stakeholders.
Goals
The goals for these two types of ESG initiatives are also different. For example, corporate social responsibility is more about protecting a company’s reputation by treating people well, and however, corporate sustainability focuses on driving new opportunities for businesses.
While CSR includes charity and community work, it’s not the same as philanthropy. Typically, being philanthropic doesn’t require a business to change the way they do business. However, corporate social responsibility asks businesses to change their operations.
Prioritizing Corporate Sustainability & Corporate Social Responsibility
Corporate sustainability and corporate social responsibility require businesses to make a change in their operations, which might require the reallocation of resources. However, before you can start prioritizing these practices, you’ll need to ensure they can help your business succeed by using professional tax software to help you track expenses and forecast your profitability.
However, all businesses should choose to become more responsible, so investing in both initiatives is a great way to build a positive relationship with the media, your employees, and your customers.
What Types of Businesses Benefit from ESG Initiatives?
As we’ve mentioned, corporate sustainability and corporate social responsibility are all parts of a business’ larger ESG initiatives. Ultimately, all businesses can benefit from focusing on doing good in society rather than doing harm with their business practices. All types of businesses can become more sustainable and responsible. For example, the crypto industry has been securitized because it requires the use of computer networks and technologies that use up a lot of electricity. However, many crypto companies are investing in ESG initiatives to find new ways to reduce their carbon footprints, which benefits the business, the people, and the planet.
Final Thoughts
Of course, being a business that can help your community, its people, and the planet sounds great. However, companies need to ensure their business practices are sustainable. After all, you can’t remain a business if you’re not making any money. Therefore, positive cash flow is necessary to ensure your business is sustainable and help you strategically plan your ESG initiatives.
Investing in corporate sustainability and corporate social responsibility are ways to help your business succeed in the long term. Your customers and stakeholders are calling for more ethical practices, so there’s no reason not to start learning how you can make your business more sustainable and responsible for higher returns in the future. You don’t have to be a green business to start making better choices for your employees, the environment, and your company; start researching how to make your business more responsible for meeting consumer and stakeholder demand.
