Corporate Social Responsibility in Practice
heba.malki
CSR.pptxCorporate Social Responsibility
Dr John Luffrum
Aims of the Unit
To understand the nature of CSR and its many forms
To investigate the forms that CSR can take – and relate them to the concepts of reliability, ethics and sustainabiliy
To analyse ways in which businesses and organisations can benefit from CSR
To Understand the consequences of failing to operate responsibly
To examine some case studies in CSR
The Nature of CSR
Business should not only be responsible morally to the stakeholders but also to the society, environment and towards a sustainable planet at large
Many Names for Same Thing…
Many other names are used to refer to CSR
Socially Responsible Business
Responsible Business Conduct
Responsible Entrepreneurship
Corporate Citizenship
Corporate Accountability
Corporate Sustainability
What is meant by CSR?
CSR requires companies to acknowledge that they should be publicly accountable not only for their financial performance, but also for their social and environmental record
CSR encompasses the extent to which companies should promote human rights, democracy, community improvement and sustainable development objectives throughout the world
(Confederation of British Industry)
CSR is the continuing commitment by businesses to behave ethically and contribute to economic development wile improving the quality of life of the workforce and their families, local communities and the society at large to improve their quality of life in ways that are both good for business and good for international development
(World Business Council)
What is CSR?
CSR is an extended model of corporate governance based on the financial duties owed to all the firm’s shareholders
CSR is about how companies manage their business processes to produce and overall positive impact on the society within which it operates
CSR is the responsibility of business to go above and beyond what the law requires them to do
CSR is the responsibility of businesses to contribute to a better society and cleaner environment
Based On Millennium Development Goals (United Nations Millennium Project)
Eradicate extreme poverty and hunger
Achieve universal primary education
Promote gender equality and empower women
Reduce child mortality
Improve maternal health
Combat HIV/AIDS, Malaria, and other fatal diseases
Ensure environmental sustainability
Develop a global partnership
Four Levels of CSR
Dimensions of CSR
Business Ethics, values and principles
Accountability and transparency (Legal Compliance)
Commitments to socio-economic development
Environmental concerns
Human Rights
Workers rights and welfare
Market relations
Sustainability
Corporate Governance
Influence of Political Systems
The Liberal model of the USA and European Union based on individual equality and liberty
The Nationalistic model within which economic activities are subordinated to the goas of the state (eg imperial Japan)
The Marxist model under which investment and enterprise is controlled by the state (eg China, Cuba)
CSR Benefits
Increased employee loyalty and retention
Increased quality of products and services
Increased customer loyalty
Increased reputation and brand image
Greater productivity and quality
Reduced regulatory oversight
Access to capital and market
Product safety and decreased liability
Less volatile stock value
CSR Standards
| Issue | Standards |
| Environment | Kyoto Protocol ISO 14000 environmental management series |
| Labour | Fair Labour Association workplace code of conduct |
| Corporate Governance | OECD principles of corporate governance Principles of Corporate Governance in Commonwealth |
| Money Laundering | Basel committee on banking supervision Wolfsburg anti-money laundering principles |
| Bribery and Corruption | OECD convention combating bribery of foreign public officials in international business transactions |
| Human Rights | Amnesty International Human Rights principles Human Rights Acts |
Business Impacts of CSR
Shareholder value (stock prices and dividend)
Revenue (market share and new markets)
Operational efficiency
Access to debt and equity capital
Customer attraction and retention
Creation of brand value and reputation
Human Capitol
Risk management
License to operate
Innovation
Driving Forces
Globalisation
Power and influence of business corporations
Growing access to education and information
Growing awareness of environmental issues
Spread of corporate scandals and public mistrust
Types of CSR (Geoffrey Lantos)
Ethical CSR – responsibility to avoid harm or social injury
Altruistic CSR – contributing to the common good at the possible expense of the business for altruistic, humanitarian or philanthropic causes
Strategic CSR – about firm’s actions that benefit BOTH the corporation and stakeholders
Ethics and CSR – What’s the difference?
Ethics is about individual actions that can be assessed as right or wrong with reference to moral principles
CSR is about the organisation’s obligation to ALL stakeholders, not just shareholders
Ethics is about the VALUES driving business decisions
CSR is about tangible corporate practices
Let’s have a look at some of those “tangible practices”
Successful CSR Lego’s Commitment to Sustainability
As one of the most reputable companies in the world, Lego aims to not only help children develop through creative play, but foster a healthy planet.
Lego is the first, and only, toy company to be named a World Wildlife Fund Climate Savers Partner, making a pledge to reduce its carbon impact.
By 2030, the toymaker plans to use environmentally friendly materials for all of its core products and packaging—and it’s already taken key steps to achieve that goal.
Over the course of 2013 and 2014, Lego shrunk its box sizes by 14 %, saving approximately 7,000 tons of cardboard. Then, in 2018, the company introduced 150 botanical pieces made from sustainably sourced sugarcane—a break from the petroleum-based plastic typically used to produce the company’s signature building blocks. The company has also recently committed to removing all single-use plastic packaging from its materials by 2025, among other initiatives.
Along with these changes, the toymaker has committed to investing $164 million into its Sustainable Materials Center, where researchers are experimenting with bio-based materials that can be implemented into the production process.
Through all of these initiatives, Lego is making a case to be considered a Responsible Company
Successful CSR Salesforce’s 1-1-1 Philanthropic Model
Beyond being a leader in the technology space, cloud-based software giant Salesforce aims to be a trailblazer in CSR.
Since its outset, the company has championed its 1-1-1 philanthropic model, which involves giving one percent of product, one percent of equity, and one percent of employees’ time to communities and the not-for-profit sector.
To date, Salesforce employees have logged more than 5 million volunteer hours. And the company has given upwards of $406 million in grants and donated to more than 40,000 not-for-profit organizations and educational institutions.
In addition, through its work with San Francisco Unified and Oakland Unified School Districts, Salesforce has helped reduce exam failures and contributed to a high percentage of students receiving A’s or B’s in computer science classes.
As the company’s revenue continues to grow, Salesforce shows that PROFIT and social impact initiatives don’t have to be at odds with one another.
Successful CSR Ben & Jerry’s Social Mission
At Ben & Jerry’s, positively impacting society is seen to be just as important as producing ice cream.
In 2012, the company became a Certified B Corporation, a business that balances purpose and profit by meeting high standards of social and environmental performance, public transparency, and legal accountability.
As part of its overarching commitment to leading with progressive values, the ice cream maker established the Ben & Jerry’s Foundation in 1985, an organization dedicated to supporting grassroots movements that drive social change.
Each year, the foundation awards approximately $2.5 million in grants to organizations in Vermont and across the United States. Grant recipients have included the United Workers Association, a human rights group striving to end poverty, and the Clean Air Coalition, an environmental health and justice organization based in New York.
The foundation’s work earned it a National Committee for Responsive Philanthropy Award in 2014, and it continues to sponsor efforts to find solutions to systemic problems at both local and national levels.
Successful CSR Levi Strauss’s Social Impact
In addition to being one of the most successful fashion brands in history, Levi’s is also one of the first to push for a more ethical and sustainable supply chain.
In 1991, the brand created its Terms of Engagement, which established its global code of conduct regarding its supply chain and set standards for workers’ rights, a safe work environment, and an environmentally-friendly production process.
To maintain its commitment in a changing world, Levi’s regularly updates its Terms of Engagement. In 2011, on the 20th anniversary of its code of conduct, Levi’s announced its Worker Well-Being initiative to implement further programs focused on the health and well-being of supply chain workers.
Since 2011, the Worker Well-being initiative has been expanded to 12 countries and more than 100,000 workers have benefited from it. In 2016, the brand scaled up the initiative, vowing to expand the program to more than 300,000 workers and produce more than 80 percent of its product in Worker Well-being factories by 2025.
For its continued efforts to maintain the well-being of its people and the environment, Levi’s was named one of Engage for Good’s 2020 Golden Halo Award Winners
Successful CSR Starbucks’s Commitment to Ethical Sourcing
Starbucks launched its first corporate social responsibility report in 2002 with the goal of becoming as well-known for its CSR initiatives as for its products. One of the ways the brand has fulfilled this goal is through ethical sourcing.
In 2015, Starbucks ensured that 99% of its coffee supply chain is ethically sourced, and it aims to make that100% through continued efforts and partnerships with local coffee farmers and organizations.
The brand bases its approach onCoffee and Farmer Equity (CAFE) Practices , one of the coffee industry’s first set of ethical sourcing standards created in collaboration with Conservation International. CAFE assesses coffee farms against specific economic, social, and environmental standards, ensuring Starbucks can source its product while maintaining a positive social impact.
For its work, Starbucks was named one of the world’s most ethical companies in 2021 by Ethisphere.
Issues with CSR “Greenwashing”
When companies feign interest in company responsibility to improve their bottom line, it is known as greenwashing. People like to support companies that are socially conscious, but when a corporation greenwashes, they are setting themselves up for failure.
While feigning interest in social responsibility can have short-term benefits, if you’re discovered it can have lasting negative impacts on your reputation. The Volkswagen/Audi car groups recent problems with diesel emission figures illustrate this point.
Volkswagen had become the world’s leading car manufacturer behind its green initiative. People around the world were drawn to the company because their green standards were better than any other company. Except they weren’t – they were shown to have falsifying emission figures by software manipulation.
Volkswagen cars weren’t green at all – in fact, they were emitting pollutants well above the limit and lying about it.
Solution: Authenticity
The path to overcoming greenwashing is easy: be authentic. Don’t claim to care about something you truly don’t care about. Companies have a history of manipulating the public by claiming that they are leaders in an issue that people care about. Fortunately often these companies get caught in their lie, but often not before thousands of people are taken in – and often at huge consequences for their reputation.
A company needs to identify its core values – the things they really care about – and then build the company around those things. If they can’t be authentic about social initiatives, it is better not to engage in them. Volkswagen is learning the price of greenwashing the hard way – in millions of Euros lost and a ruined reputation.
Issues with CSR Using Company Initiatives to Hide or Avoid Controversy
Sometimes companies try to hide or avoid controversy by pointing to their corporate social programs. The idea is that people won’t look at the problems lurking under the surface if you enact social programs that do lots of good.
While using company initiatives to avoid controversy is rooted in thinking very similar to greenwashing – what’s important is how a company addresses the problem when it’s been brought to light. Sometimes better initiatives and a change in thinking are created when the controversy is brought forward.
Solution: Owning and Fixing Problems Along Your Supply Chain
The best thing a company can do is address and fix problems when they’re presented. Trying to obfuscate or point to other things you’ve done won’t work – face the problem head-on.
A good example of a company that has owned its mistakes is NIKE. In the 1990s Nike was confronted about the working conditions of its factories in Asia. Their shoes and clothing was being made by employees with very poor pay/working conditions, and pressure was put on them to address the issue.
In 1998, Nike acknowledged that to maintain their position they had to change. From that time forward, Nike has continually been a leader in human rights and has been the standard in their industry. They release a report every year of each factory they partner with around the world and report on workers’ conditions.
While Nike may never be completely exonerated for their errors in the ’90s, they have since taken genuine and authentic steps to address the issue through corporate initiatives. For example being involved in the MAR Women First Thanks to Corporate Social Responsibility they have greatly improved their image and continued to be one of the leading sportswear brands.
Issues with CSR Never Establishing the Big Picture Behind Your Efforts
Some companies struggle to show how their efforts are working together towards a bigger purpose. While this isn’t nefarious, it also isn’t fully embracing the full power of CSR. When company initiatives are focused on a particular problem or issue, it is easier to get people to embrace the movement.
Apple is a company that focuses on many issues: accessibility, the environment, inclusion and diversity, privacy, and supplier responsibility. While these are all positive and should be issues Apple cares about, they don’t do a particularly good job of expounding how those tie into an overall mission.
Solution: A Coherent Narrative
A coherent narrative can help describe what you’re building toward, and help people embrace your initiatives. Apple’s goals are each described and they report how they’re working towards each of them, but what does that mean for Apple? What is success?
Establish the big picture behind your efforts and people will be more likely to support your initiatives. You may be able to turn Corporate Social Responsibility into a social movement and lead the discussion on issues that are important to you.
Issues with CSR Allowing Your Efforts to Fade Over Time
While we’ve been talking about corporate responsibility gone wrong, many company initiatives are born out of a desire to do good. They are started with the best intentions and have the highest amount of publicity and support when first started. Over time it can be harder to stay true to the efforts put in place, fatigue can set in and all of a sudden the initiatives are adrift – and focus is lost.
Remember Google’s original slogan - “Don’t Be Evil”? Ironically, many people see some of the new changes going on at Google as just that, evil. They worry about the mountains of personal data that the company is collecting, and what it may do with them. It is key that Google remains consistent and dedicated to its mission because if they fail it could be more than a failure of corporate responsibility – it could mean a huge invasion of privacy for billions of people.
Solution: Consistency and a Dedication to Excellence
The solution to fading responsibility efforts sounds so simple, and yet it takes tremendous character and effort to sustain – especially the longer a corporation operates.
Consistency and a dedication to excellence require an individual, or individuals, to stand up and lead the charge and hold everyone accountable, to set the vision so that others can follow. Corporate responsibility is important, not just because it can improve the bottom line, but because of the impact it can have on the world. Through it a company can forge a solid reputation as an organisation that cares about its actions and the legacy it will leave behind.
So companies aim to make their efforts authentic, own and fix any mistakes they might make, develop a coherent narrative that others can follow, and then consistently deliver on the CSR plan.
SUMMARY
CSR is a convenient blanket term that can cover a variety of issues and ways of operating related to responsible, ethical and sustainable business practice
CSR can help to forge a positive image and aid the growth of a business
Failure to address Planet and People related issues at the expense of Profit can be catastrophic for a company.
