18.3 Corporate social responsibility (CSR)

• Corporate Social Responsibility involves considering the interests of stakeholders
• What is included in the social element of CSR?

  Labor practices
• The governance element of CSR includes leadership, audits, and controls
• CSR can provide a competitive advantage by attracting environmentally conscious customers.

  True
• A strong reputation built through CSR improves stakeholder trust
• Improved financial performance is a direct benefit of CSR for companies.


  True
• CSR builds a positive brand image, enhancing stakeholder trust and loyalty
• Proactively managing ESG factors reduces scandals and legal issues for companies.


  True
• CSR enhances stakeholder trust and customer loyalty
• Prioritizing CSR helps companies thrive sustainably and contribute to social good.


  True
• Environmental factors in CSR include a company's impact on the natural environment.


  True
• Addressing ESG factors demonstrates a company's commitment to being socially responsible and sustainable
• CSR can improve profitability and shareholder value
• Stronger stakeholder relations are achieved through CSR by building ties with investors, employees, and communities
• Managing ESG factors through CSR reduces the likelihood of scandals or legal issues
• One challenge of CSR is that it can reduce short-term profitability
• Measuring the impact of CSR efforts can be complex.


  True
• Match the stakeholder with their primary interest in CSR:

  Customers ↔️ Expect ethical products

  Employees ↔️ Desire fair labor practices

  Shareholders ↔️ Prioritize financial performance

  Local Communities ↔️ Concerned about environmental impact
• Which stakeholder enforces compliance with CSR-related laws and regulations?

  Regulators
• Companies must balance competing stakeholder interests through ongoing engagement
• What is one risk associated with misleading CSR claims?

  Greenwashing
• What percentage of sales does Patagonia donate to environmental nonprofits?

  1%
• Ethical practices in CSR can increase employee morale and productivity.


  True
• Prioritizing CSR can enhance a company's reputation and competitive advantage.

  True
• Match the CSR practice with its explanation:

  Environmental Conservation ↔️ Reducing emissions and waste

  Ethical Sourcing ↔️ Ensuring fair labor practices

  Philanthropy ↔️ Donating to charities

  Community Engagement ↔️ Participating in local projects
• How does CSR improve a company's financial performance?

  Drives cost efficiency
• Proactively managing ESG factors reduces the likelihood of scandals or legal issues
• Effective CSR strengthens relationships with key stakeholders, fostering trust and collaboration.


  True
• Order the challenges of implementing CSR:

  1️⃣ Financial Costs

  2️⃣ Resource Constraints

  3️⃣ Stakeholder Conflicting Interests

  4️⃣ Measurement Difficulties

  5️⃣ Greenwashing Risk
• Why are financial costs a challenge in CSR implementation?

  Reduces short-term profitability
• What is essential for companies to balance competing stakeholder interests in CSR?

  Ongoing stakeholder engagement
• Ongoing stakeholder engagement and transparent communication are crucial for addressing material ESG issues.
• Why is CSR reporting and transparency important for companies?

  Demonstrates commitment to responsibility
• Transparent CSR reporting can build trust with stakeholders by openly communicating CSR initiatives.


  True
• Greenwashing refers to inauthentic or misleading CSR claims that can damage a company's reputation.
• Aligning CSR goals with material ESG issues is a best practice for overcoming challenges in CSR reporting.


  True
• Transparent CSR reporting should be communicated through detailed, audited reporting processes.
• What does the acronym CSR stand for?

  Corporate Social Responsibility
• Environmental CSR focuses on a company's impact on the natural environment.


  True
• Order the following benefits of CSR from highest to lowest impact on financial performance:

  1️⃣ Financial Performance

  2️⃣ Reputation

  3️⃣ Employee Engagement

  4️⃣ Stakeholder Relations