Explainer: What is the Difference Between CSR and Purpose?

A graphic of question marks provides the background art for our PRNEWS Explainer series which today asks what is an audience?

[Editor’s Note: Even experienced PR professionals need a refresher on the basics periodically, as well as insight about newer concepts. Whether it’s how to become a better writer or a review of PR ethics, we aim to provide you with content about a variety of topics and issues. Hence, our Explainer series.]

Previous posts looked at the Barcelona Principles, the Metaverse, social conversation platforms, off the record and sonic branding. Today we review the difference between corporate social responsibility (CSR) and purpose.

If there are topics you’d like to see discussed in this series, please let us know.]

What is Corporate Social Responsibility (CSR)?

According to the United Nations Industrial Development Organization, which prioritizes business and innovation, “Corporate Social Responsibility is a management concept where companies integrate social and environmental concerns in their business operations and interactions with their stakeholders. CSR is generally understood as [how] a company achieves a balance  of economic, environmental and social imperatives, while at the same time addressing the expectations of shareholders and stakeholders.”

What is a Purpose-Driven Company, Campaign, etc.? 

Net Impact, a nonprofit division of GOOD Institute, which seeks to inspire and equip emerging leaders to build a more just and sustainable world, defines a purpose-driven company as “go[ing] beyond [its] role of offering a product or service and develop[ing] programs that have a social or environmental impact,” which brings more meaning to what businesses do. Social or environmental impact is often why these organizations exist. 

What is the Difference Between CSR and Purpose and Why Does It Matter to Communicators? 

At first glance, the two terms may seem interchangeable. Both tend to imply corporate do-gooding, and the intended audience generally views these concepts in a positive light. 

Sandra Stewart, Principal of impact PR firm Thinkshift Communications, says while the term CSR initially referred to actions corporations took to benefit communities where they operate, and sometimes other stakeholders, it expanded as concern over climate change grew.

“More companies started producing reports that put more focus on their efforts to reduce the environmental impacts of their businesses,” Stewart says. “They also began considering social aspects, like labor standards in their supply chain. Some companies just expanded the term CSR to cover this, but the leaders often called these sustainability reports, to differentiate them from the prior standard.” 

It is important to determine the type of label for these organizations, products or campaigns when it comes to measuring and demonstrating success. As CSR expanded it evolved into another branch called Environmental, Social and Governance (ESG). ESG also includes a social dimension which reports on workplace standards and diversity, equity and inclusion efforts both inside the company and in the community. 

“Whatever you call it—CSR, sustainability or ESG—these initiatives for most companies have been responses to changing consumer and investor expectations,” Stewart says. “While they’re a smart way to strengthen a brand, they’re not core to the business and may get backburnered when they affect profitability or growth, or when political winds shift.” 

An example of a purpose-driven organization can be found in one of Thinkshift Communications clients, CNote, whose mission is to close the wealth gap through financial innovation.

“They do it by putting corporate and other investors money into impact-driven community financial institutions, and they measure their success in terms of loan dollars going to businesses led by women and people of color, affordable housing built, and other community benefits,” Stewart says. “Companies like this are starting to put out impact reports—yes, another new term—that assess their trackable progress on their social and environmental mission.”

More Resources for CSR and Purpose:

Nicole Schuman is senior editor for PRNEWS. Follow her @buffalogal