Difference Between CSR and ESG: What People Teams Need to Know

As a People leader, you know that your company's reputation is everything. In today's world, consumers, investors, and employees are all looking for companies that are committed to doing good. That's where CSR and ESG come in.

What is CSR?

CSR stands for corporate social responsibility. It's a company's commitment to making a positive impact on society. This can include things like environmental sustainability and good governance.

CSR is the perfect solution to improve a company’s employee engagement and attract top talent, customers, and investors, simultaneously. When companies practice CSR, they are also helping to improve the lives of people and the environment. 

What is ESG?

ESG stands for environmental, social, and governance. It's a broader term that encompasses a set of criteria that is used to assess a company's sustainability and ethical performance. These criteria include factors, such as:

• Environmental: Greenhouse gas emissions, water usage, waste management, and pollution
• Social: Employee relations, human rights, product safety, and community relations
• Governance: Board composition, executive compensation, and corporate transparency

Difference between CSR and ESG

The main difference between CSR and ESG is that CSR is a broader concept that encompasses a company's commitment to sustainability and ethical practices, while ESG is a more specific set of criteria that are used to assess a company's sustainability and ethical performance.

In simpler terms, CSR is more focused on specific initiatives that a company takes to make a positive impact on society. ESG is a more holistic approach that looks at all of the factors that contribute to a company's sustainability and responsibility.

Examples of CSR initiatives:

• Investing in renewable energy
• Reducing waste
• Supporting local communities
• Promoting diversity and inclusion

Examples of ESG factors:

• Environmental impact
• Social impact
• Governance practices
• Employee relations
• Supply chain management

CSR and ESG are both important concepts for People leaders to understand. As the face of your company to employees, investors, and consumers, you have a unique opportunity to help your company make a positive impact on the world.

How do CSR and ESG work together?

While CSR and ESG are different concepts, they work together to help companies achieve their sustainability and social responsibility goals. CSR provides the foundation for ESG, by setting the company's overall commitment to sustainability and social responsibility. ESG then provides the framework for measuring and reporting on the company's performance.

For example, a company that is committed to CSR may set a goal of reducing its carbon emissions by 50% by 2030. This goal would then be incorporated into the company's ESG reporting, which would track the company's progress toward the goal.

As the world becomes increasingly focused on sustainability, CSR and ESG will become even more important for businesses. Companies that are committed to both CSR and ESG are likely to be more successful in the long run.

How can People teams contribute to CSR and ESG?

People teams can play a key role in helping your company achieve its CSR and ESG goals. Here are a few ways that you can contribute:

• Educate employees about CSR and ESG. Help employees understand the importance of these concepts and how they can make a difference.
• Incorporate CSR and ESG into performance reviews. Make sure that employees are rewarded for their contributions to CSR and ESG initiatives.
• Provide opportunities for employee engagement. Give employees opportunities to volunteer their time or donate to causes that they care about.
• Make CSR and ESG a part of your company culture. Make it clear that CSR and ESG are important to your company and that you expect all employees to be involved.

CSR and ESG are the future of business. As a People leader, you have the opportunity to help your company lead the way in this important area. By taking the steps outlined above, you can help your company make a positive impact on the world and build a more sustainable and responsible future.

CSR and ESG are like the foundation of a house. Just like a strong foundation is essential for a sturdy house, CSR and ESG are essential for a successful company. A company with strong CSR and ESG practices will be more resilient in the face of challenges, and it will be more attractive to employees, investors, and consumers.