Corporate Social Responsibility, Company-Sponsored Events

Corporate social responsibility (CSR) events, also known as CSR activities, are sponsored by firms to promote goodwill among secondary stakeholders, such as those living in the community where the firm is based or activist groups. Firms hold these events in response to social issues beyond explicit transactional interests and technical and legal requirements. CSR events are important components of CSR practice, which is generally viewed as a sign of good corporate citizenship. Sponsoring CSR events is becoming a popular strategic tool that firms leverage to improve their reputation, which in turn affects their performance in the stock market, the labor market, and the consumer market.

More and more firms are engaging in CSR events related to public health, safety, the environment, or community well-being through active participation in secondary stakeholder groups. For example, in the past few years, the Coca-Cola Company has implemented a series of CSR events, including Women in the Workplace, which aims to empower working women throughout the world; Arctic Home—Protecting Polar Bears; Creating Water Access in Borneo, which aims to provide some remote villages on Borneo Island in Malaysia a sustainable supply of clean water; and A Moving Story—Uplifting Schools in India. This entry covers the characteristics of CSR events, the different types of CSR events, and the potential influences that companies desire from engaging in CSR events.

Characteristics of CSR Events

Researchers have discussed CSR events as having the following characteristics.

Voluntary

The firm voluntarily designs CSR events to improve social conditions indirectly. This signals the firm’s willingness to act altruistically as opposed to purely out of self-interest.

In Society’s or Stakeholders’ Interests

Firms do not put their own profit first when they implement CSR events. CSR events can be viewed, broadly, as gifts or grants from the corporation to various stakeholder groups. These events have more impact on others or on social goodwill and take the interests of the society or its stakeholders as the company’s obligation.

Beneficial for Corporate Reputation

In today’s global business, it is widely accepted that firms engage in CSR events for strategic reasons, such as public relations. From a reputational perspective, managers may see a CSR event as a relatively manageable, one-off advertising opportunity to benefit from potential reputational gains. The planning, organization, and social impact of CSR events and their use of celebrities may attract the media, community groups, and consumers’ interest and attention and improve the firm’s social reputation. Firms are increasingly using CSR events as a strategic tool to improve their social reputation.

CSR Event Types

CSR events may be classified into the following types: (a) sustainability, (b) community involvement, (c) business legitimacy, (d) philanthropy, and (e) commercial social investment. Another way of classifying CSR events is institutional event versus technical event. Corporations’ institutional CSR events (e.g., environmental event, community involvement) aim at their secondary stakeholders or society at large, while technical CSR events (e.g., employee-related programs, governance, product quality and safety) mainly target trading businesses.

Sustainability

In this context, sustainability refers to both environmental sustainability and business sustainability. CSR events related to sustainability can involve activities dealing with recycling, waste management, water management, renewable energy, reusable materials, “greener” supply chains, reducing paper use, adopting Leadership in Energy and Environmental Design building standards, and so on.

Community Involvement

Community involvement events or activities can include raising money for local charities, providing volunteers, sponsoring local events, employing local workers, supporting local economic growth, and engaging in fair-trade practices. However, corporations’ community involvement policies differ based on their organizational structure and industry type. These policies may also be influenced by the preferences of societal stakeholders.

Business Legitimacy

Events related to business legitimacy are designed to support the perception that the organization’s actions are desirable. These events relate to efforts to market to consumers ethically, obtain industrial standards (e.g., International Organization for Standardization) authentication, or have a proper political positioning.

Philanthropy

Corporate philanthropic events include monetary donations and aid given to nonprofit organizations and communities. Some companies may also establish nonprofit foundations that specialize in charities. Donations are made in areas such as the arts, education, housing, health, social welfare, and the environment, among others, but excluding political contributions and commercial event sponsorship.

Commercial Social Investment

In contrast to corporate philanthropic events, firms always intend to gain returns from events involving commercial social investment. Sponsorship and cause-related marketing are the main forms of the events of commercial social investment. Sponsorship is a cash and/or in-kind fee paid to a property (e.g., in sports, the arts, entertainment, or other causes) in return for access to the exploitable commercial potential associated with that property. Cause-related marketing refers to a type of marketing involving the cooperative efforts of a for-profit business and a nonprofit organization for mutual benefit.

The Influence of CSR Events

CSR events have the potential to influence corporate reputation, firms’ financial performance, and stakeholder behaviors. CSR events can develop good public communication with stakeholders, which may create, build, change, or reinforce the corporate brand image and social reputation. These events create messages that may be delivered to the firm’s audiences via information channels. CSR events can also become a possible solution to improve people’s impression of a company. CSR events can create a positive brand attitude and support the buying intention of corporate consumers. Appropriate intensity of CSR events advertising can enhance the firm value for firms with high public awareness.

However, not all companies can use all types of CSR events to their advantage. Engagement in technical CSR events may only benefit large firms, whereas engagement in institutional CSR events benefits all firms. So when companies intend to engage in CSR events, they should take into account the institutional differences.

There might be a positive relationship between CSR activities and firms’ financial performance. Compared with individual investors, institutional investors are more likely to be subject to the influence of CSR events. Stakeholder theory implies that it can be beneficial for a firm to engage in certain CSR events that the secondary stakeholders perceive to be important and thus strengthen their support for the firm.