FAQ - What is the difference between CSR and ESG

CSR is often mistaken as ESG in the business world.

Corporate social responsibility refers to companies uses a part of the profit earned to carry out some charitable activities to give back to the community. Examples are cash donation to old folks home, buy gifts to children from the orphanage and sponsoring tree planting event organised by environmental NGO. CSR is activity-oriented and voluntary-based. Companies carry out CSR activities to support the company's value.

Whereas for ESG, companies integrate sustainable practices into their daily operations which aim to reduce the impact of the business to the planet and people, while generating profit. ESG is data-oriented and compliance-based. For an example, companies adopt energy efficiency measures and use renewable energy to reduce their energy consumption measured in Joules and greenhouse gas emissions measured in CO2e. Companies launch safety and health campaign to strengthen their employees awareness on safety to reduce the number of lost times injury. Often times, companies integrate ESG into their daily operations due to requirements from investors, customers, or the government.

However, from our experience working with clients across various industries, we can see that there is an increasing trend where companies are voluntarily integrating ESG into their business because they see the opportunities lying ahead, such as improved reputation, competitive advantage, innovation and cost savings.

The mindset shift from worrying about the risks of not complying with ESG to anticipating the opportunities of integrating ESG into business is a good sign. When we consider the economic benefits when implementing new ESG practices, those initiatives will more likely to be long-lasting and make businesses more sustainable.

Read now - How BBC helped a logistics company to embark on voluntary greenhouse gas emissions management
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