CSR and Sustainability - Fundamental Differences

I met a senior sourcing and procurement professional of a global oil company recently. We discussed reducing the carbon footprint of their company in its supply chain. During the course of our discussions, terms like Sustainability and CSR were liberally used by both of us. After an hour into the meeting, I was asked a fundamental question which was unexpected and that left me thinking. The question was very elementary as most of us might think – “Sarobindo what is the difference between CSR and Sustainability and can we use the company CSR budget to work on sustainability projects if these two terms converge”. Multitude of answers came to my mind, which could have shown my knowledge and experience both, but I chose not to answer. In all honesty, I did not have a clear answer at that point of time. Often no visible differentiation between these terms is made. This leads to a very broad and unspecified discussion about this topic.

I promised to come back with an answer. I came back and thought over that if a senior professional with more than 15 years of experience, working with a global company has this fundamental question, there will be many more professionals responsible for decision making who have the need to understand the difference between sustainability and CSR. Hence, the motivation to write this post.

The six key differences between CSR & Sustainability based on practice are:

(1) Vision

Corporate Social Responsibility (CSR) looks backwards, reporting on what a business has done, typically in the last 12 months, to make a contribution to society. Sustainability looks forward, planning the changes a business might make to secure its future (reducing waste, assuring supply chains, developing new markets, building its brand).

(2) Targets

CSR tends to target opinion formers – politicians, pressure groups, media. Sustainability targets the whole value chain – from suppliers to operations to partners to end-consumers.

(3) Management

CSR gets managed by communications teams in most cases. Sustainability is managed by operations and marketing.

(4) Reward

CSR investment is rewarded, mandated and incentivized by Governments. Sustainability investments are rewarded by stakeholders

(5) Business

CSR is becoming more about compliance Sustainability is about business

(6) Drive

CSR is driven by the need to protect and enhance reputations in developed markets. Sustainability is driven by the need to create opportunities in emerging markets.

Sarobindo Malhotra is a co-founder of Advisory for Sustainable and Responsible Business (ASRB). Based in India, ASRB team has more than 70 years of collective work experience. They apply thought leadership and global networks across the areas of sustainability to develop solutions for businesses. ASRB’s work explores how to scale solutions to social, environmental and governance challenges.