Corporate Social Responsibility ECON 141

Corporate Social Responsibility

Corporate Social Responsibility Defining CSR Examples CSR in the Philippines How CSR affects businesses? How CSR affects communities and individuals?

CSR in Regional Trade and Investment Agreements CSR in Regional Trade and Investment Agreements Strengthening CSR
Assessing CSR Is it a sustainable solution? Can it challenge corporate power?

Corporate Social Responsibility

Defining CSR
Baker (2004): how companies manage the business processes to produce an overall positive impact on society World Business Council for Sustainable Development: 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

Defining CSR
Carroll (1991) suggests that in order for CSR to be accepted as legitimate, it has to address a broad spectrum of obligations to society, including economic, legal, ethical, and discretionary (philanthropic) responsibilities.
Philanthropic Responsibilities

Ethical Responsibilities

Legal Responsibilities

Economic Responsibilities

Defining CSR
Social responsibilities of businesses are attributed to the two salient features of a modern corporation: (1) the essential functions it performs for society (2) the immense influence it has on peoples lives

Examples of socially responsible activities

Economic growth and efficiency Education Employment and training Civil rights and equal opportunities Urban renewal and development Pollution abatement Conservation and recreation Culture and arts Medical care Government

How CSR affects businesses?

Image, reputation, and public perception Employee recruitment, retention, and motivation Improved efficiency of operations Institutionalization of CSR activities

How CSR affects communities and individuals?

Provision of services that government fails to provide Empowerment or self-pity? Cover up and green wash

CSR in Regional Trade and Investment Agreements

CSR
CSR addresses the social, environmental, and economic consequences of the activities of the corporations including their supply and value chains.

 Example: Coca-Colas water saving and water replenishment projects

CSR and Regional Trade and Investment Agreements

The inclusion of explicit references to CSR in trade and investment agreements is a relatively recent phenomenon. Objective: to strengthen the application and implementation of CSR projects

CSR and Regional Trade and Investment Agreements

Example: Canada-Peru Trade Agreements and European Parliaments resolution on CSR in RTAs Article 810: Corporate Social Responsibility Each party should ENCOURAGE enterprises operating within its territory to VOLUNTARILY incorporate CSR in their internal policies

CSR and Regional Trade and Investment Agreements

Should CSR be reflected in Regional Trade and Investment Agreements? How reflecting CSR in RTAs strengthen CSR?

Strengthening CSR
may be an opportunity to ensure that CSR objectives are being met at the company level may encourage the use of impact assessment methodologies in the implementation of these agreements

Issue:
The RTAs that have explicitly mentioned CSR have done so by encouraging CSR, not mandating.

Assessing Corporate Social Responsibility

Can a company be socially responsible?

Corporate structure is NOT capable of social responsibility. The scope of a companys responsibility is therefore self-defined and not socially defined.

In practice, CSR is not delivering.

The leaders are highly unethical companies. Voluntary codes of conduct dont work. Socially Responsible Investment (SRI) isnt enough.

Corporations gain more than society does

CSR is supposed to be win-win: The companies make profits and society benefits. CSR as Public Relations CSR as a Strategy to Avoid Regulation

Is CSR a sustainable solution?

As the economic climate changes, will companies continue to value their socially responsible image? Once CSR is exposed as a fraud, will the companies continue to spend money on it? Once CSR ceases to be flavor of the month with investors, will companies continue to care?

Can CSR challenge corporate power?

CSR gives companies the power to decide what it means to be responsible.

SOURCES:
http://www.globalcompactvietnam.org http://www.unep.ch http://www.csreurope.org http://www.corporatewatch.org