What is Social Responsibility?

Corporate Social Responsibility (CSR), which is also referred to as Corporate Citizenship, is the proactive management of the social, environmental and labor dimensions of a company's business practices.

In many sectors and regions of the world, CSR initiatives have added value to business activities. These benefits are evident as a result of the positions that companies have taken over issues such as: labor standards and practices, engaging with local communities and community development initiatives, supply chain assurance tools and establishing sustainable levels of harvesting of natural resources.

Commitment to CSR activities is largely driven by market expectations and initiatives are generally voluntary in nature. Whilst the case for CSR is most clearly demonstrated in developed economies, the private sector in emerging markets is also increasingly affected by changing expectations about environmental and social performance. These expectations are affecting markets, market access and business profitability and are being driven by:

• external pressures, such as concerns about the impacts of globalization, consumer and shareholder action, the "right to know" movement, enhanced assessment of risk by foreign investors, and access to markets and capital
• internal business responses, such as brand and reputational risk assurance strategies, and increasing cost efficiencies through more resource efficient production
• the availability and use of information about company activities, particularly via the internet

IFC, through its Social Responsibility Program, plays a growing role in helping its clients (and the wider private sector in emerging markets) understand and respond to these emerging business issues. In situations where IFC clients see a business case for moving beyond compliance with IFC's environmental and social performance standards, the Program may be available to work with them to explore and develop Social Responsibility products.