What is meant by corporate social responsibility?

Corporate social responsibility (CSR) refers to the concept that businesses have an obligation to not only maximize profits for their shareholders but also to consider the broader impact of their operations on society and the environment. This commitment involves a proactive approach where organizations engage with community needs and contribute to social well-being, sustainability, and ethical governance beyond what is required legally.

The essence of CSR is that companies acknowledge their role and responsibility in shaping societal outcomes, which includes philanthropy, sustainable practices, ethical labor, and community engagement. This goes beyond merely complying with laws and regulations; it reflects a strategic approach to business that integrates societal concerns into business operations and stakeholder interactions. A company that embraces CSR strives to balance economic goals with social and environmental considerations, fostering a positive impact on communities while still pursuing business success.

This understanding sets it apart from other choices, as it highlights a holistic commitment rather than a narrow focus on immediate financial gains, legal minimums, or limited geographical scope.