The need-to-knows of corporate social responsibility and how it impacts legal operations. Explore this article to start building CSR into your legal operations.
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Corporate social responsibility (CSR) is an increasingly important aspect of business, encompassing a wide range of initiatives that go beyond traditional business objectives.
Due to the nature of the topic – which we’ll delve into in this blog – CSR is increasingly falling into the scope of legal departments. With this in mind, it is critical for in-house legal teams to understand the role that CSR plays in the company’s overall strategy and to ensure that wider CSR initiatives are aligned with legal requirements and best practices.
In this article, we’ll provide an overview of CSR and why it is important for businesses to consider. We’ll also explore why in-house legal professionals need to care about CSR, how it can impact legal teams and how you can start building CSR into your legal operations.
In this article, we will cover the following:
- What is corporate social responsibility?
- Why should in-house lawyers care about CSR?
- The four types of CSR
- What CSR means for legal operations
- Governance through a CSR lens
- Strategy to build CSR in Legal Ops
- A few examples to inspire your CSR initiatives
- How can Newton help your legal team and business?
What is corporate social responsibility?
Corporate social responsibility (CSR) is a concept that refers to a company’s responsibility to contribute to sustainable development and to take into account the social and environmental impacts of its business operations. CSR is a broader framework that encompasses the ethical, social, and environmental responsibilities of companies – commonly known as ESG in the legal space – towards their stakeholders, including employees, customers, suppliers, and communities where they operate.
The evolution of CSR
The concept of CSR has evolved over time and has become an essential aspect of modern business practices. CSR activities can range from implementing sustainable business practices to reducing environmental impacts and investing in local communities. Some companies take it a step further by supporting causes related to social justice, diversity, equity, and inclusion.
Where CSR initiatives were originally driven by those with an interest in these topics, it is now a company-wide commitment with responsibility for CSR being shared across various departments. In-house legal teams have a key role to play in helping to ensure that CSR is integrated into the company’s operations, and that the business is acting in a socially responsible and legally compliant manner.
The benefits of CSR
The benefits of CSR are vast, both for companies and their stakeholders. CSR initiatives can enhance a company’s reputation, strengthen its brand image, and improve customer loyalty. Additionally, CSR activities can help reduce risks associated with social and environmental issues, improve employee satisfaction, and attract and retain talent.
In fact, 88% of employees believe it’s no longer acceptable for companies to make money at the expense of society at large.
However, the benefits of CSR are not solely selfless. It’s also about building a sustainable business model that creates long-term value for all stakeholders. In the long run, companies that embrace CSR are likely to be more successful, as they are better equipped to respond to social and environmental challenges and adapt to changing stakeholder expectations.
From a legal department perspective, the enhanced brand reputation that accompanies CSR commitments can help to attract and retain talent. This can result in a higher-performing and more engaged legal team.
Strong CSR programs can also help to reduce legal risks and liabilities, as companies that are committed to social responsibility are often seen as more trustworthy and reliable by regulators, customers, and other stakeholders. This can help to mitigate legal risks and liabilities associated with non-compliance with laws and regulations, as well as potential reputational damage resulting from unethical behavior.
Finally, CSR can provide in-house legal teams with the opportunity to take a leadership role within the company, by providing legal expertise and guidance to support the development and implementation of CSR policies and initiatives. This helps to position the legal function as a strategic business partner, elevating the profile of legal within the business.
Why should in-house lawyers care about CSR?
Lawyers, particularly in-house legal teams and general counsel, should care about CSR for several reasons.
CSR issues can pose significant risks to companies, including legal, financial, and reputational risks. By addressing CSR issues proactively, in-house legal teams can help minimize these risks and protect the company’s interests.
Many CSR issues are subject to legal requirements and regulations. In-house legal teams play a crucial role in ensuring that the company complies with these requirements and avoids legal liability.
A company’s reputation is closely tied to its CSR performance. By promoting CSR initiatives and addressing CSR issues, in-house legal teams can help enhance the company’s reputation and build trust with stakeholders.
Companies that are committed to CSR can gain a competitive advantage by differentiating themselves from their competitors, attracting customers who prioritize social and environmental responsibility, and enhancing their brand value.
CSR can also be an important factor in attracting and retaining talent. In-house legal teams can help support employee engagement by promoting CSR initiatives and creating a workplace culture that values social and environmental responsibility.
In essence, CSR can help manage risk, ensure compliance, enhance reputation, gain competitive advantage, and promote employee engagement. By prioritizing CSR, in-house legal teams can play a critical role in advancing the company’s social and environmental goals and promoting ethical behavior.
The four types of CSR
To deliver CSR programs effectively, it’s important for legal teams to understand the four types of Corporate Social Responsibility (CSR).
1. Environmental Responsibility
This type of CSR involves a company’s efforts to reduce its environmental impact, including reducing carbon emissions, conserving resources, and minimizing waste. In an in-house legal context, environmental responsibility can include compliance with environmental laws and regulations, advising on sustainability initiatives, and managing environmental risks.
2. Ethical Responsibility
This type of CSR involves a company’s commitment to ethical business practices, such as transparency, honesty, and fairness. In an in-house legal context, ethical responsibility can include advising on compliance with laws and regulations, developing codes of conduct and ethics policies, and managing legal risks associated with unethical behavior.
3. Philanthropic Responsibility
This type of CSR involves a company’s charitable contributions and community engagement initiatives. In an in-house legal context, philanthropic responsibility can include advising on charitable giving, ensuring compliance with tax laws and regulations, and managing legal risks associated with corporate giving.
4. Economic Responsibility
This type of CSR involves a company’s commitment to creating economic value for its stakeholders, including shareholders, employees, customers, and suppliers. In an in-house legal context, economic responsibility can include advising on corporate governance, financial disclosure, and compliance with laws and regulations related to business operations.
For in-house legal teams, it is important to understand the different types of CSR and how they relate to the company’s legal obligations and business objectives. By working closely with other departments, such as sustainability, finance, and human resources, in-house legal teams can help ensure that the company’s CSR initiatives are aligned with its legal obligations and business objectives. Additionally, in-house legal teams can provide guidance on legal compliance, risk management, and stakeholder engagement, helping the company to build a strong and sustainable CSR program.
What CSR means for legal operations
CSR has become an increasingly important issue for businesses in recent years, and it is no different for legal operations. In this section, we’ll explore what CSR means for legal operations and how legal teams can enable and support CSR initiatives.
One way that legal operations can support CSR is by ensuring that the company’s legal operations are conducted in a responsible and ethical manner. This includes ensuring compliance with all relevant laws and regulations, as well as implementing best practices that support sustainability and social responsibility. For example, legal teams can help ensure that the company’s contracts include provisions that require suppliers and vendors to adhere to the company’s CSR policies and standards.
Legal teams can also play a key role in supporting the company’s CSR initiatives by providing legal guidance and advice. This includes identifying legal risks and opportunities associated with CSR initiatives, reviewing and drafting policies and procedures, and providing guidance on legal compliance requirements related to CSR initiatives. Legal teams can also assist with reporting on CSR initiatives and ensuring compliance with relevant regulations.
Another way that legal operations can support CSR is by promoting transparency and accountability. Legal teams can help ensure that the company’s CSR initiatives are accurately reported and disclosed to stakeholders, including investors, customers, and the general public. This includes providing legal guidance on sustainability reporting standards, ensuring compliance with relevant disclosure requirements, and assisting with the preparation of CSR reports and disclosures.
In summary, CSR is an important issue for legal operations, and legal teams can play a key role in enabling and supporting CSR initiatives. By ensuring that legal operations are conducted in a responsible and ethical manner, providing legal guidance and advice, promoting transparency and accountability, and supporting the company’'s overall CSR strategy, legal teams can help drive sustainable growth and create long-term value for stakeholders.
Governance through a CSR lens
Corporate social responsibility (CSR) and corporate governance are closely related, as both are focused on ensuring that companies operate in a responsible and ethical manner. In this section, we’ll explore the relationship between CSR and corporate governance, and provide some examples of how governance can support CSR initiatives.
Corporate governance is the system of rules, practices, and processes by which a company is directed and controlled. Good corporate governance is essential for ensuring that companies operate in a responsible and ethical manner, and that they are accountable to stakeholders.
CSR is an important component of corporate governance, as it ensures that companies take into account the social and environmental impact of their operations. By implementing CSR initiatives, companies can demonstrate their commitment to ethical behavior and corporate citizenship, and enhance their reputation with stakeholders.
One example of how governance can support CSR is through the establishment of a board-level CSR committee. This committee is responsible for overseeing the company’s CSR strategy and ensuring that it aligns with the company’s values and goals. The committee can also provide guidance on how to address any legal or ethical issues that arise, and ensure that CSR initiatives are effectively communicated to stakeholders.
Another example of how governance can support CSR is through the establishment of a code of conduct or ethics policy. This policy sets out the company’s standards for ethical behavior, and provides guidance on how employees should behave in various situations. The policy can also include provisions that require suppliers and vendors to adhere to the company’s CSR policies and standards.
Finally, governance can support CSR through the establishment of reporting and disclosure requirements. By requiring companies to disclose information on their CSR initiatives and performance, stakeholders can make informed decisions about the companies they choose to invest in or do business with. This can help incentivize companies to prioritize CSR initiatives and enhance their reputation with stakeholders.
In summary, corporate governance is an essential component of CSR, as it ensures that companies operate in a responsible and ethical manner. By establishing a board-level CSR committee, a code of conduct or ethics policy, and reporting and disclosure requirements, companies can demonstrate their commitment to CSR and enhance their reputation with stakeholders.
Strategy to build CSR in Legal Ops
Building CSR into legal operations can be a daunting task, but with a strategic approach, it can be achievable. In this section, we’ll provide a strategy for how in-house legal teams can build CSR into their legal operations.
1. Identify CSR goals and values
The first challenge lies in identifying which areas of sustainability need the most attention from the legal department.
The first step in building CSR into legal operations is to identify the company’s CSR goals and values. This requires a thorough understanding of the company’s mission and values, as well as its impact on stakeholders and the environment. The legal team can then align its operations with these goals and values, and identify opportunities to support CSR initiatives.
2. Develop a CSR policy
The legal team should develop a CSR policy that outlines the company’s commitment to CSR and provides guidance on how to integrate CSR into legal operations. The policy should include provisions that require legal team members to consider the social and environmental impact of their work, and provide guidance on how to address any legal or ethical issues that arise.
3. Establish a CSR committee
The legal team should establish a CSR committee that is responsible for overseeing the company’s CSR strategy and ensuring that it aligns with the company’s goals and values. The committee can also provide guidance on how to address legal or ethical issues that arise in legal operations, and ensure that legal team members are trained on CSR issues.
4. Review contracts and agreements
The legal team should review all contracts and agreements to ensure that they align with the company’s CSR goals and values. This includes ensuring that suppliers and vendors are required to adhere to the company’s CSR policies and standards, and that contracts include provisions for ethical behavior.
5. Provide CSR training
The legal team should provide CSR training for all legal team members, including training on the company’s CSR policy, legal requirements related to CSR, and how to integrate CSR into legal operations. This training can help ensure that legal team members are aware of the company’s CSR goals and values, and have the skills and knowledge necessary to support CSR initiatives.
6. Monitor and report on CSR performance
Finally, the legal team should monitor and report on the company’s CSR performance, and provide regular updates to the CSR committee and other stakeholders. This can help identify areas where the company can improve its CSR performance, and demonstrate the company’s commitment to CSR to stakeholders.
In summary, building CSR into legal operations requires a strategic approach that includes identifying CSR goals and values, developing a CSR policy, establishing a CSR committee, reviewing contracts and agreements, providing CSR training, and monitoring and reporting on CSR performance. By following this strategy, in-house legal teams can build CSR into their legal operations and demonstrate the company’s commitment to ethical behavior and corporate citizenship.
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A few examples to inspire your CSR initiatives
To offer a little inspiration for your own CSR initiatives, here are some real-world examples of companies making a positive impact through their social responsibility programs.
Bates Wells is a law firm that focuses on social impact, and their work showcases a strong commitment to CSR. The firm provides legal services to charities, social enterprises, and businesses that prioritize social impact. Bates Wells is a certified B Corp, which means that they meet rigorous social and environmental standards, and have a positive impact on their clients, employees, and the wider community. The firm also has a Pro Bono Program, which provides free legal advice to charities and social enterprises. Additionally, Bates Wells has a Diversity and Inclusion strategy, which aims to create a more diverse and inclusive workplace. By prioritizing social impact, Bates Wells sets an example for other law firms and shows that businesses can be profitable while also making a positive impact on society.
Ecosia is a search engine that plants trees with its advertising revenue. Their CSR program is built around their commitment to fighting climate change and reforestation efforts around the world. Since 2009, the company has planted over 170 million trees and funded projects in more than 30 countries. Their dedication to environmental causes has earned them a B Corp certification and recognition as one of the world’s most innovative companies. By using Ecosia as a search engine, individuals and businesses can contribute to their CSR efforts and help make a positive impact on the planet.
Tier is a micro-mobility company that is committed to sustainability and social responsibility. They have several initiatives to reduce their environmental impact, such as using renewable energy sources and electric vehicles in their operations, and working to make their vehicles more recyclable. They also have programs to improve safety and accessibility in the communities in which they operate and to promote public health by encouraging active transportation.
Robson Laidler is a UK-based accounting firm committed to making a positive impact on its clients, community, and the environment. The company is recognized as a B Corp and donates 5% of its profits to its own Community Fund for charitable causes in the North East of England. It partners with Buy1Give1 to support a variety of sustainable development projects worldwide, including access to clean water, medical support, education, and nourishing meals.
Phi Capital Investments Limited (SimplyPhi)
Phi Capital Investments Limited is a UK-based asset management firm that is committed to sustainable and responsible investing. The company aims to create value for its clients by investing in companies that have a positive impact on society and the environment, while also delivering competitive returns. Phi Capital Investments Limited has a rigorous investment process that takes into account environmental, social, and governance (ESG) factors. The company also engages with the companies in which it invests to encourage them to adopt sustainable practices.
CSR is an essential aspect of modern business practices, encompassing a company’s ethical, social, and environmental responsibilities. It’s a framework for building a sustainable business model that creates long-term value for all stakeholders. By embracing CSR, companies can enhance their reputation, reduce risks, and build a more resilient and successful business.
How can Newton help your legal team and business?
Newton delivers an easy and intuitive platform to manage and automate your legal entities’ information, governance, and compliance. If your entity management processes are currently creating friction for your team (which they are for many), be sure to get in touch to explore how Newton can help you have everything you need to be in control of your entity portfolio.
About this article
Harvard Business School (2021). 15 Eye-opening corporate social responsibility statistics
Harvard Business School (2021). Types of Corporate Social Responsibility To Be Aware Of
Robson Laidler (2023). Impact
Simply Phi (2023)
Bates Wells (2023)
EY (2022).The General Counsel Imperative: How the law department is key in unlocking your sustainability strategy