CSR is a very common term that most of us are familiar with and we also know that this is something related to the social working of a company in the society. Now, what exactly is this CSR? Corporate Social Responsibility, abbreviated as CSR is nothing but the initiatives and efforts taken by a company in assessing and monitoring the impact and effects of its activities and functioning on the environmental and social well-being of a company. This is also termed as corporate social citizenship wherein a company would be in a situation to spend for some short-term requirements for nothing in return in the immediate future; they also do not make this expenditure expecting something in return in the name of financial benefits from the society or the people of the society but try to promote social and environmental changes in the society.
CSR is a concept that is followed by almost all the companies and firms irrespective of the field of business they are into. This is something to be considered as a core component for a company`s smooth and uninterrupted operations irrespective of the field of operations it is into. This is something that would define the relationship between the company or the firm with the people and customers of the society elaborating the offerings it has for them in the name of services. So by this, we understand that it is not just the products or the services that a company needs to offer to the customers but is also this CSR that is of utmost importance when comes to delivering services to the customers?
CSR in finance?
Now with the above explanations, you might be wondering as to how there could be a relation between the CSR concept and the financial performance of a company? What is it that impacts this finance side of the company when it adheres to follow CSR? CSR is a must for all the companies as all of us know. Now when a company is able to project that all its services offered to keep in mind the social welfare of the customers and people in the society, it would start making a good impression among them and this way it would develop a confidence in the functioning of the company in the customers. With this, the customers would start relying on the services and products of the company thereby increasing the demand for the same. Now here, this increased demand would lead to more profits