Background Overview: Background Sustainability and CSR International frameworks: guides for global business Benefits for companies CSR national Overview: CSR national National CSR Forum CSR Policies in Germany CSR international Overview: CSR international The EU's CSR policy CSR: the global dimension
NAP Overview: NAP About the NAP Overview: About the NAP Objectives Development of the Action Plan Four action areas of the NAP Original version of the NAP Monitoring UN Guiding Principles NAP International Commitment of the Federal Government Overview: Commitment of the Federal Government The state's duty to protect Activities of the Federal Government Cooperation with stakeholders Corporate due diligence Overview: Corporate due diligence Federal Government expectations Five core elements of due diligence Access to remedy and remediation Supply Chain Act Overview: Supply Chain Act Background and development Implementation by enterprises FAQ Europe Overview: Europe EU supply chain law initiative EU regulation on conflict minerals EU Timber Regulation G7-Presidency 2022 Implementation support Overview: Implementation support Sector dialogues Overview: Sector dialogues Automotive Industry Energy Sector Dialogue About the dialogues Setting up the dialogues The role of the Federal Government Information, advice, training and networks Overview: Information, advice, training and networks Information and advice Networks and training Guidance documents Overview: Guidance documents General guidance documents Sector-specific guidance documents
CSR Background CSR national CSR international Business & Human Rights NAP About the NAP Commitment of the Federal Government Corporate due diligence Supply Chain Act Europe Implementation support Sector dialogues Information, advice, training and networks Guidance documents
CSR basics

Benefits for companies

There are many reasons why companies take CSR seriously. One of them is that it is in their own interest. This is an important factor, and indeed a positive one, because CSR is not a luxury, but something which benefits a company's business.

Especially smaller, family-run companies often feel an obligation to contribute to sustainable economic practices; they are guided by an approach that is very much in line with that of the “honourable merchant”. Many business owners feel that it is their responsibility to give back to and to make a positive impact on society, their staff and the environment. They see corporate responsibility as a normative, moral obligation.

CSR and business success

But CSR is about more than moral or ethical questions. CSR is a determining factor in a company's business success. The notion that the economy and the environment or running a business and social responsibility are antithetical to each other, and that CSR is therefore a luxury not everybody can afford, is outdated. Modern management theories are premised on the opposite idea: Sustainably run companies are often more successful in the long-term. There are many reasons for this:

  • Reputation: Being perceived as a responsible company helps businesses position themselves as attractive employers in times of ever greater shortages of skilled labour; it boosts customer loyalty or helps with tapping new groups of customers.
  • Efficiency: Energy and resource efficiency reduce not just a company's ecological footprint but also its costs.
  • Risk minimisation: When a company's occupational safety and health management is in good shape, costs are lower. There are fewer accident-related interruptions of production and workers miss fewer working days.
  • Innovation: Companies which adapt to a changing environment early on, for example to higher energy costs, a scarcer supply of commodities and stricter regulation, will gain a competitive edge.

CSR and capital markets

A crucial incentive for publicly-listed companies is that CSR is a relevant factor for capital markets. Especially investors with a long-term strategy often prefer to invest in companies with more sustainable business practices than the competition. Institutional investors such as life insurers and pension funds view sustainability strategies as crucial factors in their investment strategies.

However, investors' sustainability criteria and their investment strategies differ markedly: Some rule out investments in certain businesses (e.g. investments in tobacco, pornography, arms, nuclear power), while others have a strategy of investing in an industry's most sustainable businesses (best-in-class approach), while still others only invest in certain sectors or business models such as renewables or environmental technology.

Over the past few years, sustainable, responsible and impact investing (SRI), has become an important driver for the CSR activities of many companies. According to estimates by the US Forum for Sustainable and Responsible Investment (USSIF), one in every three dollars invested in the US in 2020 followed the criteria of SRI. Information from the Global Sustainable Investment Alliance (GSI Alliance) shows that in 2020 global sustainable investment reached more than 35,3 trillion US dollars. That corresponds to a rise of 55 percent since 2016.

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