Corporate Social Responsibility Drivers and Impacts Analysis

This report delves into the multifaceted aspects of Corporate Social Responsibility (CSR). It begins by identifying key drivers of CSR, including cultural traditions, political reforms, socio-economic priorities, governance gaps, and crisis responses. The report then examines why companies are increasingly prioritizing sustainability, highlighting its role in business competitiveness, risk mitigation, and reputation management. It discusses the impacts of climate change and environmental degradation as material business risks. The report also outlines the consequences for companies that ignore sustainability, such as reduced profitability, damage to reputation, and loss of investor confidence. The report concludes with a list of references used to support the analysis.

Running head: CORPORATE SOCIAL RESPONSIBILITY 1
Corporate Social Responsibility
Name
Institution

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The corporate social responsibility drivers According to Wayne Visser include:
Cultural tradition: CSR depends on the indigenous cultural traditions of business ethics
and philanthropy. Cultural traditions such as religious beliefs are one of the key motivations for
corporate social responsibility. The businesses must, therefore, adapt to the surrounding tradition
of the people to boost their performance in the market.
Political reform: it drives the behavior of the business towards integrating ethical and
social issues. This applies in business in that the political as well as associated economic and
social changes of a country, including liberalization, democratization, can easily change the role
of business. They enable the company to take greater responsibility for environmental and social
issues.
Social-economic priorities: corporate social responsibility is shaped mainly by local
socio-economic priorities. Example of socio-economic issues is poverty. Economic activity
includes overpopulation, lack of education, unemployment, religious discrimination and
corruption. All these factors affect the performance of theorganization.
Governance gaps: corporate social responsibility also help in removing the governance
gaps left by corrupt, weak as well as under-resourced government. The business must bridge the
gap between the between the government and the people and ensure that the corrupt, week
government are not in place.
Crisis response: crises help in catalyzing corporate social responsibility responses. The
economic crisis of a country can mark a major turning point of corporate social responsibility, a
debate about the role of business in alleviating poverty.

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The main reasons why companies take sustainability more serious include:
Sustainability is a significant driver of business competitiveness and strategy: Most of the
Companies view sustainability as the main source of competitive advantage. Sustainability also
strengthens the boardrooms, bottom-line as well as corporate reputation. Most of the companies
take sustainability serious because it increases the competitive advantage of the business, and
also increases the chances of survival in tough situations (Cook & Geldenhuys, 2018).
The impacts of climate change and environmental degradation are a material business
risk: Sustainability issues such as Water, climate change and extreme weather are some of the
top business risks. Climate change and environmental degradation can cause unexpected risks.
They can cause both the business risks and environmental risks. Some of the Companies such as
the food sector are especially Vulnerable. They are being affected by climate change.
Corporations that damage the external environment cannot hide: Companies operate in an
open environment. There are NGOs that expose industries’ practices as well as hold them
responsible for environmental damage (Aguinis & Glavas, 2012).
The implementation of the sustainability strategy enables the Company to manage their
resources hence leading to the reduction of costs (operating costs). It also enhances PR and brand
image of the business in the market. Sustainability also enables the company to attract new
customers and talents in the market. Lastly, it helps in mitigating risk and increases the
competitiveness of the business.
Some of the consequences for companies that ignore sustainability as a driver include:
The consequences of ignoring sustainability are that it may lower the profitability of the
organization. The companies could see their earnings slip by a larger percentage.

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Climate changes and environmental legislation could negatively affect the supply of raw
materials, commodity prices, and the transport costs. All these factors can affect the performance
of the business.
Ignoring sustainability could damage the bottom line and reputation of the business. The
reputation and Brand confidence of the organization may be affected. Other impacts include loss
of investors’ confidence as well as share price knock.
In short, ignoring sustainability issues could affect the existence of the business and
future profitability of the organization.

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References
Aguinis, H., & Glavas, A. (2012). What we know and don’t know about corporate social
responsibility: A review and research agenda. Journal of management, 38(4), 932-968.
Cook, G., & Geldenhuys, D. J. (2018). The experiences of employees participating in
organisational corporate social responsibility initiatives. SA Journal of Industrial
Psychology, 44(1), 1-10.