The difference between CDSR, CSR and ESG
9 April 2024

The demands on companies have increased significantly in recent years. Consumers, investors and employees expect companies to evaluate their impact on the environment and society to ensure that impact is positive. To this end, companies can use different frameworks: CSR, ESG and CDSR

But what do all the abbreviations mean and what is the difference?

CSR (Corporate Social Responsibility):

CSR includes the measures a company takes to promote social and environmental issues. The OECD guidelines set a number of requirements for companies to meet. The most common approach is the three-pillar model (triple bottom line), which attempts to harmonize social, ecological and economic aspects. The idea behind it is to balance the topics that can both maintain a profitable business and at the same time specifically improve society.

CSRD (Corporate Sustainability Reporting Directive):

CSRD is an EU directive that aims to improve companies’ reporting on their environmental, social and governance practices. This is a regulatory measure that requires companies to publish certain non-financial information to provide investors and other stakeholders with insight into their sustainability performance.

ESG (Environmental, Social and Governance):

ESG includes various criteria for evaluating a company’s sustainable and ethical practices.

– Environment includes all aspects of a company’s handling of natural resources, environmental impacts and climate change. Recycling management, energy efficiency and CO2 emissions are also taken into account.

– Social summarizes the relationships of a company with its employees, customers, suppliers and society as a whole. Examples of this include working conditions, equal opportunities and social commitment.

– Corporate governance is concerned with the way a company is managed and controlled. Possible factors for measuring this criterion would be, for example, a company’s transparency, ethical standards or the avoidance of corruption.

Differences and similarities between CSR and ESG?

Both CSRD, CSR and ESG are important tools for promoting corporate social and environmental responsibility. However, while CSR is based on voluntary initiatives, CSRD and ESG are more heavily regulated and integrated directly into the core business. They also focus heavily on measurability and reporting. Even though all of these topics involve complexity, various studies have shown that they have positive effects on the long-term success of the company.