Corporate Social Responsibility (CSR): How to do corporate social responsibility right

Corporate Social Responsibility (CSR) describes the social responsibility of companies for the impact of their activities on society, the environment and the economy. More and more organizations see social responsibility not only as an ethical obligation, but also as a strategic success factor. In addition to certain measures and profitable CSR strategies, companies must also comply with legal requirements.

Contents:

– What is corporate social responsibility? A definition
– Corporate social responsibility
– Corporate social responsibility measures at a glance
– Examples of corporate social responsibility in Switzerland
– Criticism of corporate social responsibility
– Sustainability report – mandatory in Switzerland?
– How to develop your CSR strategy
– Conclusion: Showing responsibility and making an impact with CSR
– FAQ on Corporate Social Responsibility

What is corporate social responsibility? A definition

Corporate Social Responsibility (CSR) refers to the responsibility of companies for the impact of their business activities on society and the environment. It is a contribution by companies to sustainable development by integrating social, environmental and economic aspects into their business activities. In other words, corporate social responsibility is a strategic approach in which companies consciously act in such a way that they make positive contributions to society and the environment while remaining responsible to their stakeholders.

In practice, this means that companies make their decisions not only on the basis of key financial figures. They also take into account their impact on employees, the environment, customers, supply chains and local communities. This behavior should contribute to sustainable development, take into account the expectations of stakeholder groups and respect applicable laws and international standards.

CSR covers a wide range of topics within a company, such as

– Fair working conditions and health protection
– Human rights along the supply chain
– Environmental and climate protection
– Corruption prevention
– Fair competition and consumer protection
– Transparency and responsible corporate governance

There are now clear legal regulations that companies must comply with as part of CSR. An important point here is that CSR begins with compliance with these regulations, but often goes beyond this. Certain companies consciously take into account social expectations that are not mandatory by law, such as voluntary climate protection measures or initiatives for equality and diversity.

For many organizations, CSR is therefore not just a single initiative, but a holistic approach to corporate management that combines long-term responsibility with economic success. Consistent implementation of CSR can not only address social problems, but also strengthen a company’s competitiveness, for example through greater credibility, stronger customer loyalty or more attractive jobs.

Corporate social responsibility

The term corporate social responsibility is often also referred to as corporate responsibility (CR), corporate sustainability, responsible corporate governance or corporate social responsibility. In Switzerland, too, this responsibility is increasingly understood as part of sustainable corporate management in order to make an important contribution to sustainable development and to overcoming social challenges.

Corporate social responsibility encompasses more than just individual projects. Many companies actively take measures to protect and promote employees, use environmental resources sustainably, ensure ethical standards along the supply chain or guarantee fair, transparent decision-making processes. Social responsibility is therefore an integral part of the corporate strategy and reflects the values according to which the company acts.

A central component of corporate social responsibility is also the consideration of the interests of various stakeholder groups. These include:

– Employees
– Shareholders
– Customers
– Suppliers
– local communities
– Non-governmental organizations (NGOs)

Companies therefore have to reconcile different expectations. While investors expect long-term stability, consumers place more value on sustainability or ethical production conditions, for example.

Especially in an export-oriented country like Switzerland, CSR also plays an important role internationally. Many Swiss companies operate globally and therefore have to take particular responsibility for their environmental standards, working conditions and supply chains.

Corporate social responsibility measures at a glance

CSR strategies consist of concrete measures with which companies implement their social, environmental and economic responsibility. CSR measures can bring economic benefits for companies. Studies show that sustainable companies are often viewed more positively by investors and have lower risks in the long term.

These activities are often structured along the so-called ESG criteria: Environment, Socialand Governance.

Ecological responsibility

Protecting the environment is a central component of many CSR strategies. Companies try to reduce their negative impact on the climate and resources.

Typical measures are

– Reduction of CO₂ emissions
– Use of renewable energies
– Recycling and circular economy
– Sustainable packaging

Many companies are now also pursuing long-term climate targets such as net-zero emissions by 2050.

Social responsibility

The second area concerns the relationship with employees, customers and society as a whole.

Typical CSR measures in the social area are, for example:

– Fair wages and safe working conditions
– Promoting diversity and equality
– Education and training programs
– Involvement in local communities
– Supporting non-profit organizations

Employee volunteering or corporate volunteering programs also fall into this area.

Governance and ethical corporate management

The third area concerns the way in which a company is managed. Transparent and responsible governance should ensure that economic goals remain compatible with ethical principles.

These include:
– clear compliance guidelines
– corruption prevention
– transparent reporting
– independent control structures
– responsible supply chains

Examples of corporate social responsibility in Switzerland

Many Swiss companies are already actively implementing corporate social responsibility. The following examples show that CSR has long since become part of modern corporate management in Switzerland, even if the specific approaches vary depending on the sector and size of the company.

Migros

As one of Switzerland’s best-known philanthropists, Gottlieb Duttweiler, the founder of Migros, laid the foundations for responsible entrepreneurship early on. Today, the retail group pursues a comprehensive sustainability strategy that combines social, ecological and economic aspects. Responsible corporate governance is an important part of the business strategy.

Migros is guided by the OECD Guidelines for Multinational Enterprises, among other things, and relies on a structured due diligence process. This duty of care serves to identify, avoid or reduce potential negative impacts of business activities, for example in supply chains, at an early stage.

Also relevant to Migros’ CSR strategy is the so-called materiality analysis, in which the most important sustainability issues are identified. These include, for example, human rights, environmental impact, consumer protection and working conditions. The implementation of the strategy and measures is monitored by an internal sustainability controlling system and documented annually.

Nestlé

The Nestlé food group has also been pursuing a CSR strategy for many years under the concept of “Creating Shared Value”. The company tries to combine economic success with social benefits. One focus is on sustainable agriculture and responsible supply chains.

Specific targets include reducing greenhouse gas emissions by 2030, expanding regenerative agriculture, responsible procurement of raw materials and promoting diversity within the company.

Helvetia

The Swiss insurance company Helvetia also integrates sustainability into its corporate strategy. CSR activities are divided into four strategic pillars: customers, employees, environment and society.

The long-term goals include the expansion of sustainable products, responsible investments and the transition to net zero emissions in accordance with the Paris Climate Agreement. Helvetia also aims to be a particularly attractive employer and to actively contribute to solving social challenges.

Criticism of corporate social responsibility

Corporate Social Responsibility is increasingly caught between credible commitment and strategic image cultivation. The latter in particular means that CSR is regularly criticized despite its growing importance. One frequently cited accusation is greenwashing. This involves companies presenting individual sustainable initiatives to the outside world as particularly successful without fundamentally changing their business practices. Critics often see this as an attempt to build a positive image without assuming any real responsibility.

Another problem is that many CSR measures are voluntary. Without binding rules, there is a risk that companies will only implement those measures that are economically or reputationally attractive. Structural problems such as poor working conditions in global supply chains can often only be solved to a limited extent or not at all.

The measurability of CSR successes is also viewed critically in some cases. Although sustainability reports contain more and more key figures, many impacts (for example on society or biodiversity) are difficult to identify with concrete data. In addition, commercial organizations invest in CSR to varying degrees, which creates an uneven playing field.

For these reasons, the regulatory embedding of sustainability is becoming increasingly important. More and more countries and international organizations are developing binding standards for sustainability reports, supply chains and environmental targets. CSR is therefore partly regulated by law, but beyond that it remains a voluntary commitment.

Sustainability report – mandatory in Switzerland?

In Switzerland, reporting on sustainability and social responsibility has been partially regulated by law for several years. This is based on new provisions in the Swiss Code of Obligations (CO). Depending on the company, international provisions may also apply. Overall, it is clear that voluntary corporate social responsibility is developing into a regulatory standard for transparent corporate governance in many regions of the world.

Reporting on non-financial matters

Since 2023, certain Swiss companies have been legally obliged to prepare an annual report on non-financial matters. The Swiss Code of Obligations provides the legal framework for this. Art. 964b CO stipulates that companies must report on their strategies, material risks, measures and their effectiveness. These non-financial matters include

– Environmental concerns
– Social and employee concerns
– Human rights
– Combating corruption

These non-financial disclosures serve to provide transparency to the public and various stakeholder groups. They are also intended to create a better understanding of the company’s sustainability-related activities.

The reporting obligation is part of the indirect counter-proposal to the federal popular initiative “For responsible companies – to protect people and the environment”, which was voted on by the Swiss population in 2020. The initiative called for binding legal regulations that would oblige companies to comply with human rights and international environmental standards abroad, to carry out risk-based due diligence and to be liable in the event of violations. Although it achieved a popular majority in the referendum, it failed to achieve the required majority of the cantons. Instead, Parliament’s indirect counter-proposal came into force. This provides for transparency and reporting obligations as well as due diligence obligations, but dispenses with far-reaching liability provisions.

Large companies of public interest such as listed companies, banks or insurance companies are primarily affected by the reporting obligation. The prerequisite is that the company employs at least 500 people and has a balance sheet total of over CHF 20 million or a turnover of over CHF 40 million.

These companies had to prepare a corresponding sustainability report for the first time for the 2023 financial year. This is due within six months of the end of the financial year, i.e. usually by the middle of the following year. Companies can publish the report either separately as a non-financial report or integrated into the management report, depending on their internal reporting strategy and legal interpretation.

Content of the report

In addition, the report must cover the following aspects in accordance with Art. 964b CO:

– Strategies and concepts for sustainability
– Significant risks in environmental or social issues
– Measures to minimize risks
– Effectiveness of these measures

If a company does not pursue a corresponding concept, it must justify this. This principle is referred to as “comply or explain”. This means that companies are obliged either to implement the required measures or to explain transparently why they deviate from them and what alternatives they are taking. This ensures that stakeholders can understand how the company deals with sustainability issues, even if it does not implement all recommendations one-to-one.

Due diligence obligations for child labor and conflict minerals

In addition to the reporting obligation, the Swiss Code of Obligations also contains specific due diligence obligations in supply chains. Companies that import or process certain raw materials such as tin, tantalum, tungsten or gold from conflict areas must check their supply chains and minimize risks. Similar obligations apply in cases of suspected child labor.

Influence of EU regulation

European regulations are also increasingly influencing Swiss companies. The EU’s Corporate Sustainability Reporting Directive (CSRD) is particularly relevant. Swiss companies may be affected by this directive if they have large subsidiaries in the EU or generate significant sales within the EU. In such cases, a Swiss company may have to report in accordance with European sustainability standards. However, even if a company is not directly covered by the CSRD, it may be indirectly affected. Many European business partners now require sustainability data along the entire supply chain.

How to develop your CSR strategy

Social responsibility within a company does not just start with individual projects – it should be part of the core business from the very beginning. A successful CSR strategy can only be created if companies systematically analyze their responsibility and integrate it into all relevant business processes.

The first step is to identify the company’s most important sustainability issues. This so-called materiality analysis examines which social, environmental and economic impacts are particularly relevant. In addition to internal perspectives (from employees and management), it is also worth including external expectations (from customers, investors, NPOs). Methods can include workshops, stakeholder interviews or sustainability rankings. This makes it clear which topics have the greatest influence on the company’s success and social impact.

Based on this, companies can define specific targets. Examples include CO₂ reduction targets, promoting diversity or sustainable procurement guidelines. It is important not to treat CSR as an isolated project. Goals can be formulated according to the SMART criteria: specific, measurable,achievable, relevantand time-bound. This makes it easier to monitor success later on. Incidentally, successful strategies integrate sustainability into central business processes such as purchasing, production or HR policy, instead of just anchoring it in a separate CSR team.

Another decisive factor is transparency. Sustainability reports and ESG indicators enable companies to document progress and build trust among investors, employees and customers. Companies can draw on internationally recognized standards: GRI (Global Reporting Initiative) supports reporting on social, environmental and economic issues, while SASB (Sustainability Accounting Standards Board) focuses on financially relevant ESG aspects that are of particular interest to investors. Smaller companies can also use these standardized frameworks to make their reports comparable and comprehensible. Regular updates, KPI tracking and clear visualizations increase the impact.

Finally, cooperation also plays an important role. Many CSR initiatives are created in partnership with scientific institutions, non-profit organizations or other companies.networks and collaborations help to pool resources, develop innovative solutions and tackle social challenges more effectively together.

By taking these steps towards a clear CSR strategy, companies are taking responsibility for society and the environment. At the same time, they benefit from a stronger brand and build more trusting relationships with stakeholders. This creates a sustainable balance between economic success and social responsibility.

Conclusion: Showing responsibility and making an impact with CSR

Corporate social responsibility has long been more than just the voluntary commitment of individual companies. CSR combines economic success with social responsibility and is increasingly becoming a central component of modern corporate management. Companies that consistently implement their CSR strategy can not only improve their social impact in the long term, but also strengthen their reputation and competitiveness.

For companies, CSR not only opens up new possibilities for sustainable business, but also opportunities for credible social commitment. With Spheriq’s digital solutions, companies can efficiently implement their donation and sponsorship activities. Whether donation campaigns, sponsorship management or reporting: Spheriq supports you in implementing social responsibility visibly and strategically.