Some concepts seem superficially similar while having marked differences when you investigate more closely. CSR and ESG are among these. In this article, we will examine the definitions and applications, exploring the similarities between CSR and ESG and uncovering the differences between the two.
What is CSR?
CSR stands for Corporate Social Responsibility. It is your company’s commitment to ethical business practices and sustainability. Beyond legal compliance, your initiatives are voluntary. They may include charitable giving, community engagement, and adopting more environmentally friendly work methods.
No business that is not compliant with regulations and standards can be seen as responsible, so ensuring compliance is a first step. However, it is only the beginning, and companies with a strong approach to CSR go above and beyond what is required.
What is ESG?
Environmental, social, and governance (ESG) consists of a set of criteria that investors and stakeholders use to determine a company’s operations-based and sustainability-related risks and opportunities.
On the environmental front, it considers impacts like carbon emissions and waste management. The social element examines how the company interacts with employees, suppliers, and communities. The governance element unpacks elements like leadership, audits, and the rights of shareholders. Since it is used to inform investors, ESG information is regulated by the Financial Conduct Authority in the UK.
Similarities Between CSR and ESG
From these two definitions, you will likely identify some of the key similarities between ESG and CSR. Summing these up, they both:
- Seek to demonstrate a high standard of ethics and responsibility.
- Examine the environmental and social impacts of a business while striving to minimise negative effects and increase positive impacts.
- Seek to engage stakeholders by demonstrating that the organisation is striving to uphold the well-being of employees, communities, and the environment.
However, the fact that these two similar-sounding things are, in truth, very different from one another cannot be overlooked.
Differences Between CSR and ESG
The purpose, intended audience, and the very nature of CSR and ESG are vastly different. They are measured differently, regulated differently, and integrate differently with a business’s strategic intent. That’s quite a mouthful, so a more detailed explanation is in order.
Purpose of CSR and ESG
CSR is voluntary. No authority or law requires a business to make CSR statements, although many do since it demonstrates the organisation’s values and drives goodwill. ESG, on the other hand, focuses on data and risk assessment. It is used to help businesses show regulatory compliance and aid business leaders and investors in their decision-making.
Intended Audience For CSR and ESG Reports
CSR has a greater relationship-building focus. It strives to engage employees who feel they are working towards something positive and customers who hope to support ethical businesses.
Community engagement also has potential benefits, as the wider community can influence prospective employees and customers. It is a key component of the environment in which a business operates.
ESG can be viewed as a form of non-financial accounting, as it is used to inform investors and investment analysts while also drawing attention from regulatory bodies.
How the Nature of CSR Differs From ESG
CSR is qualitative rather than quantitative. Although measurements can be included, they are not an absolute requirement. For example, a company may say it supports specific community initiatives or donates a percentage of its profits to charity, but absolute numbers are not required. ESG, by contrast, is based on measurables, and reports must be informed by objective data.
CSR and ESG Measurements
In a related point, CSR documentation is often focused on narratives and is not standardised in any way. ISO 26000 offers a way to standardise CSR, but it remains voluntary and is used as guidance for businesses that hope to take the high road in terms of CSR.
It is generally agreed that, just like accounting, ESG should use standardised reporting frameworks. In the UK, drafts of UK SRS S1 and UK SRS S2 were tabled in 2025, and we can expect standardisation of ESG reporting to follow.
Regulatory Requirements and Intervention
In the EU and the UK, CSR is largely unregulated, while ESG is increasingly subject to regulation. It certainly seems unlikely that regulators will come after your business if you fail to make a promised donation to a food bank, for example. However, when data is used to influence financial decisions, the stakes become higher, and regulatory intervention is likely if misrepresentations are made.
Integration Into Business Strategies
While some CSR concepts may form part of a business’s strategy, and simply working to increase their business’s positive impacts can be seen as a strategy, many companies treat CSR as a separate matter. ESG information is very different. It will be integrated into risk management strategies and strategic plans.
Business Size and CSR vs ESG
Most smaller businesses will not undertake a structured approach to ESG, although some sources recommend that they do so anyway. Corporate enterprises are another matter. Up to 88 percent of them have implemented ESG, and a similar percentage of investors say it is important to them. A growing number of countries require ESG from larger companies. By contrast, both small and large businesses can provide CSR information if they choose to.
Differences Between CSR and ESG in Brief
We can sum all of this up quite neatly. CSR is what your business chooses to do, while ESG indicates what you are expected (and sometimes even required) to measure, how it will be measured, and how the results will be disclosed.
While CSR appears less weighty and “serious,” we believe that it should be taken very seriously indeed. After all, doing good things of your own volition is rather special and will mean more to your clients and beneficiaries than anything you are forced to do.
Our Top CSR Tip is a Golden Opportunity
It is not always possible for businesses to find ways to benefit society as a whole. Charitable giving offers some opportunities, but it is always limited by its cost. At RSVP, a business process outsourcing company based in London, we have discovered an effective way to benefit society and increase our customers’ profits. You can be part of it.
Our Restart initiative trains people who are soon to be released from prison to work as customer service representatives. It is a core business area in which we excel, and our trainees will earn money as they learn.
Apart from having an opportunity to earn and save before their release, they will achieve a certified qualification and will stand a better chance of reassimilating into society. Research shows that finding employment after release reduces the potential for reoffending substantially.
We are offering our trainees’ services at a lower cost than our premium offering, but we can assure you that all candidates given an opportunity to work already demonstrate competence and professionalism. Through Restart, your business can benefit society while enhancing your customer service, boosting customer satisfaction, and improving customer retention metrics. CSR really can be a not-to-be-missed opportunity. Contact us to find out more.