Social responsibility is the responsibility of an organization for the impacts of its decisions and activities on society and the environment, through transparent and ethical behaviour that:
Contributes to sustainable development, including the health and the welfare of society
Takes into account the expectations of stakeholders
Is in compliance with applicable law and consistent with international norms of behaviour, and
Is integrated throughout the organization and practised in its relationships.
Also is a corporation's initiatives to assess and take responsibility for the company's effects on environmental and social wellbeing. The term generally applies toefforts 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.
For many companies, it’s not enough to make money and satisfy customers. These companies often go the extra mile to give a little something back to their employees, the community, and the world at large. They’ve developed solid reputations for going out and doing some good, turning their success into an opportunity to help others. The following companies are just a few examples of those doing Corporate Social Responsibility right.
Starbucks
Starbucks has been around for more than four decades, and from the very beginning it has worked hard to operate in an ethical manner. Starbucks ranked as Fortune Magazine’s fifth most socially responsible company in 2012. There are a number of good reasons for the high ranking. The company looks for better ways to develop sustainable production of its coffee. It has set in place some guidelines it calls C.A.F.E Practices, ensuring environmental leadership, economic accountability, and product quality. Starbucks also supports Ethos Water, which provides clean water to more than a billion people.
Disney
Disney is a name known around the world, and though the company has been around for a long time, its reputation is still a glowing one. The Walt Disney Company largely focuses on a few areas of social responsibility, namely community, the environment, and volunteerism. Disney has been a major provider of aid after natural disasters, such as the 2010 earthquake in Haiti. The company also takes an interest in protecting the environment, giving proceeds from nature films to plant trees in the rain forest and protect thousands of acres of coral reef.
NuSkin
NuSkin is a personal care company with a big focus on helping communities around the world. One of the company’s major initiatives is called Nourish the Children. The program was started in 2002 and allows company sales leaders, employees, and customers to donate nutrient-rich meals to needy children. In March 2014, NuSkin announced that it had surpassed 350 million donated meals. The company also operates the Force For Good Foundation, which works to offer children relief from illiteracy, disease, and poverty.
Microsoft
Microsoft is another major company that takes great effort in giving back. The company was even named the best at Corporate Social Responsibility by the Reputation Institute. One way Microsoft is helping out is through its annual Employee Giving Campaign, where employees attend fundraising events for nonprofit organizations. The campaign has been held every year since 1983 and has raised more than $1 billion in contributions to more than 31,000 organizations.
TOMS Shoes
TOMS Shoes might not be as well known as some of the other companies on this list, but its charity work is still impressive. The entire company was founded on the idea of giving back. For every pair of shoes sold, another pair is donated to a child in need. More than 10 million pairs of shoes have been donated, and that charitable effort has now extended to vision care for kids.
For these companies and many others, business isn’t all about the bottom line. They make strides to be a caring part of the community and help out those who live in less fortunate circumstances. They’re companies that know how important Corporate Social Responsibility can be to others.
Corporate social responsibility
The concept of CSR is underpinned by the idea that corporations can no longer act as isolated economic entities operating in detachment from broader society. Traditional views about competitiveness, survival and profitability are being swept away.Corporate social responsibility (CSR) promotes a vision of business accountability to a wide range of stakeholders, besides shareholders and investors. Key areas of concern are environmental protection and the wellbeing of employees, the community and civil society in general, both now and in the future.
Some of the drivers pushing business towards CSR include:
1. The shrinking role of government
In the past, governments have relied on legislation and regulation to deliver social and environmental objectives in the business sector. Shrinking government resources, coupled with a distrust of regulations, has led to the exploration of voluntary and non-regulatory initiatives instead.
2. Demands for greater disclosure
There is a growing demand for corporate disclosure from stakeholders, including customers, suppliers, employees, communities, investors, and activist organizations.
3. Increased customer interest
There is evidence that the ethical conduct of companies exerts a growing influence on the purchasing decisions of customers. In a recent survey by Environics International, more than one in five consumers reported having either rewarded or punished companies based on their perceived social performance.
4. Growing investor pressure
Investors are changing the way they assess companies' performance, and are making decisions based on criteria that include ethical concerns. The Social Investment Forum reports that in the US in 1999, there was more than $2 trillion worth of assets invested in portfolios that used screens linked to the environment and social responsibility. A separate survey by Environics International revealed that more than a quarter of share-owning Americans took into account ethical considerations when buying and selling stocks. (More on socially responsible investment can be found in the 'Banking and investment' section of the site.)
5. Competitive labour markets
Employees are increasingly looking beyond paychecks and benefits, and seeking out employers whose philosophies and operating practices match their own principles. In order to hire and retain skilled employees, companies are being forced to improve working conditions.
6. Supplier relations
As stakeholders are becoming increasingly interested in business affairs, many companies are taking steps to ensure that their partners conduct themselves in a socially responsible manner. Some are introducing codes of conduct for their suppliers, to ensure that other companies' policies or practices do not tarnish their reputation.
Some of the positive outcomes that can arise when businesses adopt a policy of social responsibility include:
1. Company benefits:
Improved financial performance;
Lower operating costs;
Enhanced brand image and reputation;
Increased sales and customer loyalty;
Greater productivity and quality;
More ability to attract and retain employees;
Reduced regulatory oversight;
Access to capital;
Workforce diversity;
Product safety and decreased liability.
2. Benefits to the community and the general public:
Charitable contributions;
Employee volunteer programmes;
Corporate involvement in community education, employment and homelessness programmes;
Product safety and quality.
3. Environmental benefits:
Greater material recyclability;
Better product durability and functionality;
Greater use of renewable resources;
Integration of environmental management tools into business plans, including life-cycle assessment and costing, environmental management standards, and eco-labelling.
Nevertheless, many companies continue to overlook CSR in the supply chain - for example by importing and retailing timber that has been illegally harvested. While governments can impose embargos and penalties on offending companies, the organizations themselves can make a commitment to sustainability by being more discerning in their choice of suppliers.
The concept of corporate social responsibility is now firmly rooted on the global business agenda. But in order to move from theory to concrete action, many obstacles need to be overcome.
A key challenge facing business is the need for more reliable indicators of progress in the field of CSR, along with the dissemination of CSR strategies. Transparency and dialogue can help to make a business appear more trustworthy, and push up the standards of other organizations at the same time.
The Global Reporting Initiative is an international, multi-stakeholder effort to create a common framework for voluntary reporting of the economic, environmental, and social impact of organization-level activity. Its mission is to improve the comparability and credibility of sustainability reporting worldwide.
