Corporate social responsibility (CSR)

Definition

Corporate social responsibility (CSR) is a business model in which companies integrate social and environmental concerns in their operations and interactions with stakeholders. It emphasizes the importance of ethical behavior, sustainable development, and community engagement.

5 Must Know Facts For Your Next Test

1. CSR initiatives can improve a company's reputation and brand loyalty among consumers.
2. Companies practicing CSR often see increased employee satisfaction and retention.
3. CSR activities can lead to cost savings through efficient resource use and waste reduction.
4. Regulatory compliance is easier for firms actively engaged in CSR due to proactive risk management.
5. CSR reporting is increasingly becoming a part of financial disclosures, impacting accounting practices.

Review Questions

• How does CSR impact a company's relationship with its stakeholders?
• What are some potential financial benefits of implementing CSR practices?
• Why is CSR reporting significant in managerial accounting?

Related terms

Sustainability:

The practice of meeting current needs without compromising the ability of future generations to meet theirs.

Ethical Accounting: Accounting practices that adhere to moral guidelines and transparency standards.

Stakeholder Engagement:

The process by which companies communicate with, involve, and consider the interests of those affected by their operations.