Jump to the content An initiative by:

Overview: CSR

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

Overview: Business & Human Rights

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 initiative for supply chain legislation

EU regulation on conflict minerals

EU Timber Regulation

G7-Presidency 2022

Implementation support

Overview: Implementation support

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

An initiative by: CSR

Overview: CSR

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

Business & Human Rights

Overview: Business & Human Rights

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 initiative for supply chain legislation

EU regulation on conflict minerals

EU Timber Regulation

G7-Presidency 2022

Implementation support

Overview: Implementation support

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 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.

Back to the overview

CSR basics