The Evolution of Corporate Citizenship: From Sponsorships and CSR to Today's ESG
The article was originally published in "The Communicator", the LinkedIn newsletter of wellenwide
Over the years, the landscape of corporate citizenship has witnessed a remarkable transformation. What started as mere sponsorship programs has now escalated into a comprehensive framework known as Environmental, Social, and Governance (ESG).
Phase 1: Sponsorship Programs Supporting Causes and Events
In the past, companies often supported causes or events through sponsorship programs. These programs involved providing financial or in-kind support in exchange for brand visibility. However, sponsorship programs are now seen as a narrower form of engagement compared to broader CSR or ESG initiatives.
Phase 2: Corporate Social Responsibility (CSR) Addressing Societal Impact
CSR emerged as a broader approach, voluntarily integrating social and environmental considerations into a company's business practices. CSR initiatives encompass activities like philanthropy, employee volunteering, community engagement, ethical sourcing, and environmental stewardship. These efforts allow companies to address their impact on society more comprehensively.
Phase 3: Environmental, Social, and Governance (ESG) Assessing Sustainability and Impact
ESG evolved from CSR and evaluates a company's sustainability and societal impact. It considers environmental (E), social (S), and governance (G) aspects. ESG criteria assess issues like carbon emissions, diversity and inclusion, human rights, supply chain practices, board composition, and transparency. ESG programs are more comprehensive, focusing on long-term sustainability and value creation.
While terminologies have changed, the underlying intention remains constant. Companies strive to actively address their impact on society and the environment, considering not only financial performance but also broader ethical and sustainable factors.