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Intro to CSR // Part II - Why is CSR important?

Updated: Feb 19, 2021

This is the second post out of three in my series on "What is CSR and why is it important?" See the first post "What is CSR?" here.


The undertitle to this post reads as follows: "How a holistic CSR approach can improve businesses on various levels" Sceptical about this? Let me convince you! As one might assume, with climate change and an evolution in the public understanding of the responsibilities of companies, it should be already quite legally binding for corporations nowadays to fulfill certain CSR standards. Unfortunately, in accordance with the lack of a global CSR-definition, there are also huge differences in the norms and width of the CSR Reporting Regulations. Generally speaking, besides some very basic laws, varying from country to country, on the environmental and societal impact of companies and organizations, there are legal guidelines - like for example the EU directives, targeted on the CSR reporting of companies with more than 500 employees. Every country or intergovernmental alliance handles this different. (I will discuss some legal examples in my third blogpost of this series.) Nevertheless, companies of all sizes and organization-forms should be motivated to not just comply to the law, but to go further. There are a bunch of economic reasons to pursue a sustainable business model. Yes, you read me right here – it is not “just” about maintaining our mother planet in a habitable way for us and future generations – CSR can also improve businesses’ economic performance on the long term.


Source: Acrolab


Here a just some of the reasons why:

  • CSR can, through checking the efficiency of the companies’ processes and structures, improve their ROI (Return on Investment) and thus the impact and output of their businesses’ resources

  • A continuous corporate social responsibility approach can serve as an early warning system, and is thus a superb risk management tool (for example on questions like governmental laws on businesses, new mindsets and trends in their target customer group, new policies of retailers like zero plastic packaging, new demands or priorities of certain investors etc.)

  • CSR improves their reputation as a good employer and a good place to work at – which attracts future, high skilled employees and improves the satisfaction of their existing workforce (as several studies and the Scandinavians show, happy employees are also more motivated, creative, pro-active and productive employees)

  • CSR improves the companies’ reputation as a responsible company that cares about people & planet which improves their customer bonding and attracts new target groups (Studies show that ~60% of all millennials consider it essential that a brand supports the communities in which they’re operating. On top of that, ~47% said it’s their top priority to develop a more environmentally-friendly lifestyle. (see as an example the Nielsen Global Study, including 30,000 Participants from 60 countries))

Yes, if you take it seriously, a CSR approach is related with costs – e.g. for new machines, a better living wage (also for the producers and their employees along your supply chain), higher quality resources, and especially, less abundance. Is it for example really necessary to publish a new ‘edition’ of a product every year, with just minor adaptations? It is a Dilemma – I know you want to have it both: economic success and maintaining the resource base of our planet in a sustainable way, while being in a world with theoretically endless financial, but very much limited natural resources. It seems like you can’t have both fully – either you compromise on your economic success, for a more sustainable business approach, or you compromise on your moral and social consciousness and a futureproof approach. BUT – let me tell you something: CSR, exercised in a smart way, can be very beneficiable for all businesses! So, let’s get it started!













Read more: Part III - An International Review of CSR Performance.

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