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Financial Markets & Risk - Essay Example

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Corporate Social Responsibility (CSR) has been defined as the business commitment and contribution to the quality of life of employees, their families and the society overall to support sustainable development.
Corporate Social Responsibility (CSR) has been defined as “an…
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Financial Markets & Risk
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Download file to see previous pages iness Council for Sustainable Development defines CSR as the business commitment and contribution to the quality of life of employees, their families and the society overall, to support sustainable development. In recent years, CSR has been incorporated into the business strategy of a majority of the companies and firms in UK and all over the world. This is because of a variety of considerations that have developed in recent years making it an essential component for the success of any business.
Altruistic CSR involves contributing to the common good at the possible, probable, or even definite expense of the business. It may be humanitarian, or philanthropic. Humanitarian CSR involves firms to go beyond preventing or rectifying harms they have done to assuming liability for public welfare deficiencies that they have not caused. This type of CSR is relatively rare.
Strategic CSR is done to accomplish strategic business goals – good deeds are believed to be good for business as well as society. With this, corporations give back to their constituencies because it is in their best financial interests to do so. This is philanthropy aligned with profit motives. Social goals are found profitable in the long run since market forces provide financial incentives for perceived socially responsible behaviour.
CSR is also a positive business driven response to the business environment of today. It is not an add-on. CSR is not static. It is a dynamic, multidimensional concept covering social, economic and environmental concerns, and is continually evolving with the diversity of the market. Innovation is a critical aspect of CSR initiatives. CSR is not an alternative to regulation. CSR is voluntary in nature.
It has become imperative for businesses today to incorporate CSR in their business activities. Apart from the pressures from various directions, there are several reasons that companies find CSR initiatives beneficial for them.
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