Corporate Social Responsibility Practice Test 2026 – Complete Exam Prep

Mitigating reputational damage is closely related to risk management in Corporate Social Responsibility (CSR) because it involves proactive measures that organizations can take to safeguard their reputation against potential risks. In the context of CSR, companies are increasingly held accountable for their social, environmental, and ethical practices. When an organization engages in practices that align with sustainable and responsible standards, it not only enhances its reputation but also minimizes the risk of facing backlash from stakeholders, including customers, investors, employees, and the broader community.

Effective CSR strategies often include assessing potential risks associated with their business practices and the impact they may have on their reputation. By identifying and addressing these risks, companies can avoid crises that could harm their image, reduce customer trust, and jeopardize long-term success. This proactive stance is vital, as reputation is a key asset for any business, affecting everything from customer loyalty to market position.

In contrast, the other options present approaches or attitudes that do not align with effective risk management in CSR. Ignoring stakeholder feedback can lead to increased risks if the company is not aware of public concerns or expectations. Increasing operational expenses without a clear connection to CSR initiatives may not effectively mitigate risk but could detract from overall performance. Prioritizing short-term profits often overlooks the