Corporate social responsibility (CSR) refers to a company's initiatives to assess and take responsibility for its effects on environmental and social wellbeing. CSR goes beyond legal compliance and involves voluntary actions that contribute to sustainable development. It has been defined in various ways but generally refers to balancing economic, environmental, and social interests. Key CSR issues companies address include environmental management, human rights, labor standards, community relations, and anti-corruption measures. Proper CSR implementation can benefit companies through improved reputation, customer loyalty, and risk management.
1. Definition[edit]
Since the 1960s,[12]
corporate social responsibility has attracted attention from businesses and
stakeholders in regard to its benefits and what it is. Corporate social responsibility has been defined
differently by different writers based on what they perceive about the concept. Having learnt from the
devastating effects of corporate social irresponsibility, companies are focusing on the impacts of
their operations not only on profits but the society and environment at large. Therefore, corporate
social responsibility refers to "the ethical principle that an organization should be responsible for how
its behaviour might affect society and the environment".[13]
From 1960, "corporate social
responsibility" has remained a term used indiscriminately by many to cover legal and moral
responsibility more narrowly construed.[12]
In response to the rising concerns on ethical issues in businesses, Carroll 1991 extended corporate
social responsibility from the traditional economic and legal responsibility to ethical and philanthropic
responsibility.[14]
Carroll demonstrates that corporate social responsibility is made up of four
responsibilities that are interrelated and argues that corporate social responsibility can not be
achieved without meeting the four responsibilities sequentially namely economic, legal, ethical and
philanthropic responsibilities. Similarly, Business Dictionary defines CSR as "A company's sense of
responsibility towards the community and environment (both ecological and social) in which it
operates. Companies express this citizenship (1) through their waste and pollution reduction
processes, (2) by contributing educational and social programs and (3) by earning adequate returns
on the employed resources."[15]
SocialResponsibility and Ethics
Social responsibility is an ethical theory, in which individuals are accountable for fulfilling
their civic duty; the actions of an individual must benefit the whole of society. In this
way, there must be a balance between economic growth and the welfare of society and
the environment. If this equilibrium is maintained, then social responsibility is
accomplished.
What it Means to be Socially Responsible and Ethical?
The theory of social responsibility is built on a system of ethics, in which decisions and
actions must be ethically validated before proceeding. If the action or decision causes
harm to society or the environment then it would be considered to be socially
irresponsible.
Moral values that are inherent in society create a distinction between right and wrong. In
this way, social fairness is believed (by most) to be in the “right”, but more frequently
than not this “fairness” is absent. Every individual has a responsibility to act in manner
that is beneficial to society and not solely to the individual.
2. WHAT IS CORPORATE SOCIAL
RESPONSIBILITY?
Corporate social responsibility (CSR) is a broad term used to describe a company’s efforts to improve society
in some way.
These efforts can range from donating money to nonprofits to implementing environmentally-friendly
policies in the workplace.
CSR is important for companies, nonprofits, and employees alike.
Corporate social responsibility is not a mandated practice in the United States; instead, it is
something extra that companies do to improve their local and global communities.
What is 'Corporate Social Responsibility'
Corporate social responsibility, often abbreviated "CSR," is a corporation's initiatives to
assess and take responsibility for the company's effects on environmental and social
wellbeing. The term generally applies to efforts that go beyond what may be required by
regulators or environmental protection groups.
CSR may also be referred to as "corporate citizenship" and can involve incurring short-
term costs that do not provide an immediate financial benefit to the company, but
instead promote positive social and environmental change.
Corporate Social Responsibility is a management concept whereby companies integrate social and
environmental concerns in their business operations and interactions with their stakeholders. CSR is
generally understood as being the way through which a company achieves a balance of economic,
environmental and social imperatives (“Triple-Bottom-Line- Approach”), while at the same time
addressing the expectations of shareholders and stakeholders. In this sense it is important to draw a
distinction between CSR, which can be a strategic business management concept, and charity,
sponsorships or philanthropy. Even though the latter can also make a valuable contribution to
poverty reduction, will directly enhance the reputation of a company and strengthen its brand, the
concept of CSR clearly goes beyond that.
Promoting the uptake of CSR amongst SMEs requires approaches that fit the respective needs and
capacities of these businesses, and do not adversely affect their economic viability. UNIDO based its
3. CSR programme on the Triple Bottom Line (TBL) Approach, which has proven to be a successful
tool for SMEs in the developing countries to assist them in meeting social and environmental
standards without compromising their competitiveness. The TBL approach is used as a framework
for measuring and reporting corporate performance against economic, social and environmental
performance. It is an attempt to align private enterprises to the goal of sustainable global
development by providing them with a more comprehensive set of working objectives than just profit
alone. The perspective taken is that for an organization to be sustainable, it must be financially
secure, minimize (or ideally eliminate) its negative environmental impacts and act in conformity with
societal expectations.
Key CSR issues: environmental management, eco-efficiency, responsible sourcing, stakeholder
engagement, labour standards and working conditions, employee and community relations, social
equity, gender balance, human rights, good governance, and anti-corruption measures.
A properly implemented CSR concept can bring along a variety of competitive advantages, such as
enhanced access to capital and markets, increased sales and profits, operational cost savings,
improved productivity and quality, efficient human resource base, improved brand image and
reputation, enhanced customer loyalty, better decision making and risk management processes.
Definition of corporate social responsibility (CSR)
Movement aimed at encouraging companies to be more aware of the impact of their business on the
rest of society, including their own stakeholders and the environment. [1]
Corporate social responsibility (CSR) is a business approach that contributes to sustainable
development by delivering economic, social and environmental benefits for all stakeholders.
CSR is a concept with many definitions and practices. The way it is understood and implemented
differs greatly for each company and country. Moreover, CSR is a very broad concept that
addresses many and various topics such as human rights, corporate governance, health and safety,
environmental effects, working conditions and contribution to economic development. Whatever the
definition is, the purpose of CSR is to drive change towards sustainability.
Although some companies may achieve remarkable efforts with unique CSR initiatives, it is difficult
to be on the forefront on all aspects of CSR. Considering this, the example below provides good
practices on one aspect of CSR – environmental sustainability.
Example
Unilever is a multinational corporation, in the food and beverage sector, with a comprehensive CSR
strategy. The company has been ranked ‘Food Industry leader’ in the Dow Jones Sustainability
World Indexes for the 11 consecutive years and ranked 7th in the ‘Global 100 Most Sustainable
Corporations in the World’.
4. One of the major and unique initiatives is the ‘sustainable tea’ programme. On a partnership-based
model with the Rainforest Alliance (an NGO), Unilever aims to source all of its Lipton and PG Tips
tea bags from Rainforest Alliance Certified™ farms by 2015. The Rainforest Alliance Certification
offers farms a way to differentiate their products as being socially, economically and environmentally
sustainable. [2]