Define corporate social responsibility and give an example of a business practice.

• A. A government mandate requiring annual audits.
• B. A marketing strategy to increase sales by using celebrity endorsements.
• C. A company’s obligation to consider social and environmental impacts; e.g., sustainable sourcing and community programs.
• D. A financial instrument used to hedge risk.

Answer: (C)

Corporate social responsibility is a business approach that holds a company accountable for its effects on society, the environment, employees, customers, and the communities where it operates. It goes beyond legal requirements or profit alone by integrating ethical, sustainable, and philanthropic considerations into how decisions are made and how operations are conducted. An example is sustainable sourcing—choosing suppliers who protect workers’ rights and minimize environmental impact—along with community programs like local education or volunteer initiatives. This shows CSR in action, distinguishing it from regulatory mandates that focus on compliance, marketing tactics aimed at boosting sales, or financial instruments used to manage risk, which don’t inherently address a company’s broader social or environmental responsibilities.