CSR vs. ESG: Understanding the Key Differences

1. CSR vs. ESG Understanding the Key Differences and Why Both Matter

2. Overview In our increasingly interconnected world, companies are expected to positively impact society and the environment. Two key frameworks that guide businesses in this endeavor are Corporate Social Responsibility (CSR) and Environmental, Social, and Governance (ESG). Although they share common goals, understanding the distinctions between CSR and ESG is essential for companies committed to making a meaningful difference.

3. What is CSR? • Definition: Corporate Social Responsibility (CSR) is a company's commitment to operate sustainably across economic, social, and environmental dimensions. • Key CSR Activities: • Philanthropy: Making donations to charities, sponsoring community events, and supporting social causes. • Ethical Business Practices: Ensuring fair labor practices, ethical sourcing, and transparent operations. • Environmental Initiatives: Reducing carbon footprints, managing waste, and conserving resources.

4. What is ESG? • Definition: Environmental, Social, and Governance (ESG) criteria provide a framework for investors to evaluate a company's sustainability and ethical impact. • Key ESG Components: • Environmental:. • Governance: Examining a cAssessing a company's environmental policies, practices, and impact, including carbon emissions, energy efficiency, and resource management. • Social: Evaluating how a company manages relationships with employees, suppliers, customers, and communities, including diversity and inclusion, labor practices, and community engagementompany's leadership, executive pay, audits, internal controls, and shareholder rights.

5. CSR ESG • CSR initiatives are typically voluntary and driven by a company's values. • CSR focuses on a company's overall impact on society and the environment through philanthropy and ethical practices. • CSR activities are often qualitative and based on company values. • CSR targets a broad range of stakeholders, including customers, employees, and communities. • ESG criteria are often mandated by investors and regulatory bodies. • ESG provides specific criteria for investors to evaluate a company's sustainability and governance. • ESG criteria are quantifiable and data-driven, offering a standardized way to measure and compare c • ESG primarily targets investors who use these criteria for informed investment decisions. ompanies.

6. Why Both Matter • Enhances brand reputation, fosters customer loyalty, and improves employee engagement by demonstrating a company's commitment to being a responsible corporate citizen. • Attracts socially responsible investors, mitigates risks, and ensures long-term sustainability with clear, standardized criteria for assessing a company's environmental and social impact.

7. Why Spherule Foundation Spherule Foundation is a non-profit organization dedicated to creating sustainable change across India. Their initiatives align with Corporate Social Responsibility (CSR) and Environmental, Social, and Governance (ESG) principles, focusing on areas such as education, women's empowerment, health, and environmental conservation.