Corporate Social Responsibility (CSR)

Corporate social responsibility

What is CSR?

The entirety of CSR can be discerned from the three words contained

within its title phrase:

‘corporate,’ ‘social,’ and ‘responsibility.’ Therefore, in broad terms, CSR

covers the

responsibilities corporations (or other for-profit organizations) have to the

societies within which

they are based and operate.

More specifically, CSR involves a business identifying its stakeholder

groups and incorporating

their needs and values within the strategic and day-to-day decision-

making process.

• Pyramid of CSR

• Philanthropic Responsibilities

Be a good corporate citizen.

• Ethical Responsibilities

Be ethical.

• Legal Responsibilities

Obey the law.

• Economic Responsibilities

Be profitable.

CSR in Equation Form Is the Sum of:

Economic Responsibilities (Make a profit)

Legal Responsibilities (Obey the law)

Ethical Responsibilities (Be ethical)

Philanthropic Responsibilities (Good corporate citizen)

CSR and its Integration into Companies Work Culture

The first step is a written policy statement on CSR, which should be tracked through

the year

and the progress noted in the company’s annual report.

• The CSR activities may also be included in both internal and external newsletters,

press

releases notes, etc, to make the employees and public aware of the initiatives.

• The company must also entrust specific CSR tasks to certain members in the

organization.

The learning experiences should also be documented while going through the CSR

activities

to make others learn from it.

• The top management provides the required thrust and focus to a company’s but

special

staffing has become a norm.

Dimensions of CSR and relevance for emerging markets

SOCIAL CSR ASPECTS

Human rights

Companies:

1. do whatever they can to promote human rights in those countries where they operate. In areas

of conflict, where gross violations of human rights occur, extra care should be taken with

respect to honouring basic human rights.

2. investigate the impact of any business operation on a given country’s human rights situation

before launching business activities there.

3. include an explicit reference to the Universal Declaration of Human Rights of the United

Nations or other international human rights treaties in a code of conduct (with respect to both

employees and all members of the community in which the corporation operates).

National sovereignty and local communities

Companies:

ensure respect for the national sovereignty and local communities

Labour

Companies:

1. respect and ensure the freedom of association and right to collective bargaining.

2. do not engage or support the use of forced labour.

3. contribute to the abolition of child labour.

4. do not discriminate with respect to employment and occupation.

5. ensure security of employment.

6. ensure a living wage.

7. ensure occupational health and safety.

8. respect maximum number of working hours.

9. provide training.

10. guarantee handling of complaints.

11. provide timely information on reorganisations and the right to collective discharge and

redundancy schemes.

12. do not use the threat to transfer the operations of the company to other countries as a means

for influencing the negotiations with trade unions or employees.

13. do not use double standards.

14. employ and train local staff as much as possible.

15. enable worker representatives to negotiate and confer with decision makers.

Consumer protection Companies:

1. ensure access to essential goods and services.

2. ensure the right to safety, with respect to:

a. physical safety

b. safety and quality of consumer goods and services

c. food, water and pharmaceuticals

3. ensure the right to information.

4. ensure the right to choice in the market place.

5. ensure the right to be heard.

6. ensure the right to obtain redress.

7. respect the right to consumer education.

8. promote sustainable consumption.

9. respect the right to privacy.

ENVIRONMENTAL CSR ASPECTS Companies:

1. respect the principle of preventive action.

2. support a precautionary approach to environmental challenges.

3. rectify environmental damage as a priority at source.

4. respect the principle that the polluter bears the environmental costs.

5. promote greater environmental responsibility.

6. encourage the development and diffusion of environmentally friendly technologies.

7. contribute to the preservation of biodiversity.

8. reduce energy use.

9. limit or alter material use.

10. reduce water use.

11. limit emissions.

12. reduce waste.

ECONOMIC CSR ASPECTS Contribution to development

Companies:

1. contribute to equal access to health facilities.

2. contribute to access to basic food, housing, sanitation and sufficient safe drinking

water.

3. contribute to education and access to information with respect to essential health

problems in de community.

4. promote respect for other socio-economic rights, like the right to work, social

security, maternity leave, to take part in cultural life.

Corruption Companies:

1. do not offer, nor give in to demands to pay bribes to public officials or employees of business

partners.

2. do not demand bribes to obtain or retain business or other improper advantage.

Fair competition

Companies:

1. conduct activities in a competitive manner.

Taxation

Companies:

1. contribute to public finances of host countries.

Science and technology

Companies:

1. transfer S&T in order to contribute to the development of local and national innovative

capacity.

Why is CSR relevant today?

CSR as a strategy is becoming increasingly important

for businesses today because of three

identifiable trends:

• Changing social expectations

• Increasing affluence

• Globalization

Arguments Against

• Restricts the free market goal of profit maximization

• Business is not equipped to handle social activities

• Dilutes the primary aim of business

•

Increase business power

• Limits the ability to compete in a global marketplace

Arguments For

• Addresses social issues business caused and allows

business to be part of the solution

• Protects business self-interest

•

Limits future government intervention

• Addresses issues by using business resources and

expertise

• Addresses issues by being proactive

Business Responsibilities in the 21st Century

• Demonstrate a commitment to society’s values and

contribute to society’s social, environmental, and

economic goals through action.

• Insulate society from the negative impacts of

company operations, products and services.

• Share benefits of company activities with key

stakeholders as well as with shareholders.

• Demonstrate that the company can make more money

by doing the right thing.

Implementing CSR: Key steps

Ensure the commitment of top management, and particularly the CEO, is

communicated

throughout the organization

• Appoint a CSR position at the strategic decision-making level to manage the

development of policy and its implementation

• Develop relationships with all stakeholder groups and interests (particular relevant

NGOs)

• Incorporate a Social or CSR Audit within the company’s annual report

• Ensure the compensation system within the organization reinforces the CSR policies

that

have been created, rather than merely the bottom-line

• Any anonymous feedback/whistle-blower process, ideally overseen by an external

ombudsperson, will allow the CSR Officer to operate more effectively