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 decisionmaking 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 companys 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 companys 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 countrys 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 societys values and contribute to societys 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 companys 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