Author: Ana Maria Kos
Publication date: 28.08.2023
Modern industry is constantly under attack from the side of an increasing number of activists. As a result of that, big companies are forced to consider adopting new ways of running businesses. One of the many approaches for improving business functioning is to apprehend one term – social value.
What is actually social value in business?
Social value refers to the positive impact that businesses have on their local communities. In fact, different organizations have varying levels of focus on social value. That’s why more and more members of certain communities are attentive and curious about where money from taxes usually goes. Regarding this, citizens want to know how much money is being spent on impacts that are considered positive.
The aim of contributing value to the community is to use business thinking to solve the problems that have traditionally been considered social issues. So, instead of simply donating money, companies are actively addressing humanitarian or environmental issues through the creation of products or services. This way, they are having a meaningful impact beyond just financial contributions. The term social value has developed a new way of running a business known as corporate social responsibility.
Corporate Social Responsibility (CSR) and Types
As mentioned before, CSR and social value are deeply correlated with their original idea. Unlike social value, represents a business initiative that aims to achieve goals related to ethics, sustainability and social impact. Companies embrace the CSR (Corporate Social Responsibility) model to ensure their operations have a positive impact on society and the environment. So, this model can be categorized into four main areas:
● environmental responsibility,
● ethical responsibility,
● Philanthropic endeavors, and
● financial obligations.
Environmental responsibility
Environmental responsibility refers to a company's dedication to sustainable practices and eco-friendly operations. More and more companies are prioritizing sustainability, and taking steps to minimize their ecological footprint. Also, they are considering their environmental impact at every stage of their business.
Ethical responsibility
Ethical responsibility revolves around a company's dedication to conducting business ethically, upholding human rights principles, and treating all stakeholders fairly. This includes practicing fair trade, ensuring equal pay, and promoting a work environment that respects diversity and inclusivity.
Philanthropic responsibility
Philanthropic responsibility involves a company's efforts to actively contribute to the betterment of society as a whole. This can be achieved through various initiatives, such as donating a portion of their earnings to local community causes, and establishing trusts or foundations.
Financial responsibility
Financial responsibility refers to the practice of making financial decisions that align with
the company's commitment to doing good. This can include investing in alternative energy sources, allocating funds to education programs, and supporting local charities to strengthen their impact and promote positive change.
Conclusion
By embracing these four pillars of CSR, companies strive to make a meaningful and responsible contribution to society. At the same time, though, they are considering the long-term sustainability of their operations.