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Corporate Social Responsibilities


Introduction

Corporate Social Responsibility (CSR) is a concept whereby organizations consider the interests of society by taking responsibility for the impact of their activities on customers, employees, shareholders, communities and the environment in all aspects of their operations. This obligation is seen to extend beyond the statutory obligation to comply with legislation and sees organizations voluntarily taking further steps to improve the quality of life for employees and their families as well as for the local community and society at large.


CSR is the business response to the sustainable development challenge and is at the heart of managing business risk. A broadly implemented and sustained commitment reduces reputational exposure, financial liability, political and security risk, and supply chain vulnerability.


CSR programmes create value through:

  • technical innovation and improved productivity
  • enhancement of company profile and brand image
  • reduced insurance premiums
  • better alignment of corporate goals with those of society
  • favourable investor profile

CSR need not be a new and costly exercise and many corporate programmes fall within the scope of CSR. However, since CSR issues cut across traditional organisational structures and reporting lines, a holistic management framework is required to ensure consistency and efficiency.


History of CSR Development


The debate about CSR has been said to have begun in the early 20th century, amid growing concerns about large corporations and their power. The ideas of charity and stewardship helped to shape the early thinking about CSR in the US.


The term CSR itself came in to common use in the early 1970s although it was seldom abbreviated. The term stakeholder, meaning those impacted by an organistion's activities, was used to describe corporate owners beyond shareholders from around 1989.


Many large companies now issue a corporate social responsibility report along with their annual report. The CSR report concentrates on their non-financial societal activities (usually positive contributions in nature).


The increased awareness of CSR has also come about as a result of the United Nations Millennium Development Goals, in which a major goal is the increased contribution of assistance from large organizations, especially Multi-National Corporations, to help alleviate poverty and hunger, and for businesses to be more aware of their impact on society. There is a lot of potential for CSR to help with development in poor countries, especially community-based initiatives.


In the UK, the term "Corporate Responsibility" is increasingly used instead of CSR, as a conscious move to expand the boundaries away from purely social or community issues to include broader areas of governance and environmental sustainability.


Definitions of CSR


There is no universally accepted definition of CSR. Selected definitions by CSR organizations and actors include:

  • "Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large" (World Business Council for Sustainable Development)

  • "Corporate social responsibility is undertaking the role of “corporate citizenship” and ensuring the business values and behaviour is aligned to balance between improving and developing the wealth of the business, with the intention to improve society, people and the planet"

  • "CSR is a company’s commitment to operating in an economically, socially and environmentally sustainable manner whilst balancing the interests of diverse stakeholders." (CSR Asia)

  • "Corporate social responsibility is the commitment of businesses to contribute to sustainable economic development by working with employees, their families, the local community and society at large to improve their lives in ways that are good for business and for development." (International Finance Corporation)
  • "A concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis." (European Commission)
  • "Corporate Responsibility is about ensuring that organisations manage their businesses to make a positive impact on society and the environment whilst maximising value for their shareholders." (Institute of Chartered Accountants in England & Wales)

Approaches to CSR


An approach for CSR that is becoming more widely accepted is community-based development projects, such as the Shell Foundation's involvement in the Flower Valley, South Africa. Here they have set up an Early Learning Centre to help educate the community's children, as well as develop new skills for the adults. Marks and Spencer is also active in this community through the building of a trade network with the community - guaranteeing regular fair-trade purchases. Often alternative approaches to this is the establishment of education facilities for adults, as well as HIV/AIDS education programmes. The majority of these CSR projects are established in Africa. A more common approach of CSR is through the giving of aid to local organizations and impoverished communities in developing countries. Some organizations do not like this approach as it does not help build on the skills of the local people, whereas community-based development generally leads to more sustainable development.


CSR Services


  • Corporate environmental strategy
  • CSR audit and gap analysis
  • Social auditing
  • Industry benchmarking and investor attractiveness
  • Eco-efficiency assessment
  • Programme design & management
  • Knowledge management
  • Training and change management
  • Preparation of annual environmental and triple bottom line reports

A company commits to a CSR programme commits to widespread disclosure of CSR performance. This means reporting the good with the bad that is ensuring that relevant information is reported with accuracy and balance.


Reducing environmental impacts reduces social impacts and financial liabilities


Environmental impacts - real or perceived - are among the most visible and socially sensitive aspects of a company's operations. Therefore our general approach to CSR begins with consideration of environmental issues and priorities and works through related social aspects and financial implications.


Environmental Dimension


Key environmental parameters are defined by considering the company's level of direct responsibility, and its ability to control risk. Environmental performance should be considered from an overall site perspective rather than a series of media-specific compliance targets (e.g., air, ground- and surface water). This can be scaled up to geographic locations, operating entities, or along the supply chain, thereby improving consistency, shared cultural values, and information management.


Social Dimension


The potential areas of social impact may include employees and their families, local communities, citizens' groups, consumers, shareholders, governments and many others. In dealing with social issues, the philosophy of “enlightened self interest” should be promoted based on developing a win-win situation for the company and its stakeholders.


We focus on the primary underpinnings of successful social programmes:

  • clear direction on corporate ethics and behaviour
  • development of stakeholder partnerships
  • representation of local stakeholder groups
  • communication channels and discussion forums that encourage two way dialogue.

Financial Dimension


Our focus in this area is risk management, both site-specific and portfolio. We work with our clients' financial managers or auditors to ensure that all materialities relating to environmental and social issues are properly reflected in financial statements and reports. In addition, we identify opportunities for cost savings and value creation through technology innovation, new products and new revenue streams.