Rethinking the S Pillar of ESG: Corporate Social Responsibility in a Corporate and EU Context

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Abstract

This study examines the role of corporate social responsibility (CSR) within the ESG (Environmental, Social, Governance) framework, with a special focus on the social (“S”) dimension and its regulatory context in the EU. The central question of the research is how the social aspect of the ESG approach can become an integral part of corporate strategy and what regulatory instruments are best suited for encouraging socially responsible operations in the EU. While the environmental dimension has seen more development to date, the social dimension is becoming more prominent, in particular through Directive 2014/95/EU and the CSRD. This study aims to explore the mechanisms through which CSR can be integrated into the day-to-day operations of companies and how these practices affect their market position and social acceptance. The study uses qualitative methods, applying legal and literature analysis, which highlights the importance of employee welfare, community relations and transparent reporting. The results suggest that the inclusion of social considerations in mandatory reporting is not only an ethical but also an economic imperative. Corporate social performance affects credit risk, investor decisions and social trust. The study will allow a deeper understanding of the relationship between CSR and the ESG framework and thus contribute to the promotion of a sustainable and inclusive economy.