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Based on both the "stakeholder" and "cognitive" theories, this study shed light on the optimistic side of the COVID-19 pandemic, as it also brings the concepts of corporate social responsibility (CSR) and sustainability back into the light, which helps in solving the labor environmental issues. Our research aims to profoundly investigate the correlation between CSR and labor environmental issues based on the International Organization for Standardization's standard 26,000 (ISO 26000) during COVID-19 and to also examine how CSR practices help solve labor environmental issues in the Egyptian small and medium enterprises (SMEs). Partial least squares structural equation modeling (PLS-SEM) was adopted, for data analysis and hypotheses testing, on a sample of 307 manager-level employees in the Egyptian SMEs. Results indicate that CSR positively impacts labor practices dimensions (employment relationships, human development and training, social dialog, and health and safety at work). However, CSR has an insignificant effect on social protection and work conditions. This study is scientifically valuable since it helps better understand the pandemic's effects on environmental labor issues in the Egyptian SMEs and shows how CSR helps solve those issues. Also, it discussed the theoretical contributions and practical implications and showed the limitations and future research for this study area., (© 2021. The Author(s), under exclusive licence to Springer-Verlag GmbH Germany, part of Springer Nature.)