In recent decades, sustainability and social responsibility have become key factors in the corporate world. Until recently, the term Corporate Social Responsibility (CSR) was the primary way companies expressed their commitment to social and environmental issues. However, in recent years, ESG (Environment, Social, Governance) has gained increasing popularity, replacing CSR as the leading standard for assessing business sustainability and responsibility.
What are ESG and CSR?
CSR (Corporate Social Responsibility) is a concept that refers to companies’ voluntary initiatives to contribute to society and the environment. This includes charity, sustainable business practices, and commitment to social causes.
ESG (Environmental, Social, and Governance) is a more structured and measurable approach to assessing corporate sustainability. ESG criteria are used by investors, analysts, and regulators to evaluate a business’s long-term stability and its impact on society.
How Did CSR Transform into ESG?
While CSR focuses on companies’ voluntary and sometimes informal efforts, ESG offers a more standardized and measurable approach. The main reason for the shift from CSR to ESG is the need for more transparent and accountable business practices, allowing stakeholders to make informed investment and strategic decisions.
Key Differences Between ESG and CSR:
- Measurability – ESG relies on specific indicators and metrics to measure performance, whereas CSR is often based on voluntary initiatives without clear measurable results.
- Regulation and Accountability – ESG is closely linked to regulatory requirements and reporting obligations, whereas CSR usually does not require official reports.
- Investment Focus – ESG is a key factor for investors looking for sustainable and stable companies, while CSR is more of a tool for building a positive public image.
- Scope and Integration – ESG is deeply integrated into corporate strategy and management processes, whereas CSR often exists as a separate initiative, independent of the core business model.
- Long-Term Impact – ESG aims for lasting and sustainable changes, while CSR initiatives can be temporary and primarily serve to improve public perception.
While CSR remains an important element of corporate responsibility, ESG is emerging as a more structured and sustainable model for evaluating business practices. The difference between them lies in their approach—while CSR is often a voluntary initiative, ESG is becoming a standard expected from companies and plays a crucial role in investment and management decisions. In today’s dynamic environment, ESG is shaping up as the future of corporate sustainability, providing real value not only for society but also for businesses.
Discover more useful tips at JobTiger.agency or by contacting us at hr@jobtiger.bg.