Consumers, and now companies, are starting to care more about corporate social responsibility (CSR). But this year, Maurice Norris, PPAI’s public affairs manager, says we can expect CSR to change.

Norris says, “CSR is experiencing an evolution into environmental, social and governance (ESG). One of the biggest differences is that with ESG, more verifications are being demanded from companies that are making sustainability claims.

With CSR, companies could make certain social or environmental claims, and aside from the relevant federal agencies that ensure the applicable compliance requirements, there was not often the same level of scrutiny regarding those claims as we are seeing with ESG. The biggest change here is that the demands are being made by consumers and investors.”

Another key difference of ESG is that it requires actionable demands. “For example, some clients may have previously sought companies with an established CSR program,” says Norris. “Now, with ESG, company leaders, under pressure from investors and consumers, are more likely to request that products are made with recycled materials, or that a potential supplier dedicates resources to carbon offsetting efforts. Other examples include consumers wanting to acquire products from businesses owned by veterans, or companies with women in the C-suite.” 

There are similarities to CSR and ESG initiatives. “As CSR evolves into ESG, consumers and investors are making demands that companies 'do good' in addition to making profits. Many of the concepts overlap; doing the right thing is often also required by applicable trade or product safety regulations,” Norris says.

A driving trend in CSR is that consumer attitudes toward sustainable products are changing. Norris says, “Numerous studies have shown that consumers across the spectrum are altering their buying habits with the environment in mind. Other research has shown that many consumers prioritize products that make sustainability claims, and are also willing to pay more for sustainable products.”

But the biggest difference between CSR and ESG is the demand for proof. “Many of those investors and consumers won’t just take company’s claims at face value,” Norris says. “They will demand substantiation for any claims related to sustainability.”