7 - Corporate Social Responsibility Flashcards
what is corporate social responsibility
- maximise positive stakeholder benefits whilst minimising negative effects
- ethical behaviour = improves quality of life for community and society
what is sustainability
meeting the needs of the current generation without compromising the needs of the future generations
examples of corporate social responsibility
- equal opportunity policies
- emissions/recycling policies
- fair trade policies
- charitable donations
- supply chain policies/standards
what are the elements of sustainability set out by CIMA
- strategy/oversight; drivers into strategy
- execution/alignment; small targets etc
- performance and reporting; targets and monitoring performance
OECD principles of sustainability (15)
- achieve sustainable development
- respect human rights
- encourage local capacity building
- encourage human capital formation
- refrain from accepting exemptions
- uphold good corp gov and apply principles
- develop self regulatory practices
- promote employee awareness of policies
- refrain from discriminatory/disciplinary action
- carry out risk based due diligence
- avoid contributing to adverse impacts
- prevent/mitigate adverse impact even if indirect
- encourage business partners to follow guidelines
- engage with stakeholders to open meaningful opportunities
- abstain from improper conduct
arguments in favour of CSR
(in the enlightened self interest theory)
- extra customers
- avoid boycotts
- retains good employees
- boost investment
- avoidance of punitive legislation
- contribute to positive society
arguments against CSR
- businesses shouldn’t bear burden
- aim is to maximise shareholder wealth, they can spend on what they want
- social issues are issues of the gov
- profitability is socially responsible in itself, trickle down effect
- increased costs of ethical materials, turning away unethical customers
carroll’s 4 part model
- economic = generating a return
- legal = compliance with regulations
- ethical = seen to do what is right
- philanthropic = desired actions, not required
carroll’s social responses
- reaction
- defence
- accommodation
- proaction
stages involved in a CSR strategy
- identify stakeholders
- classify stakeholders into internal, connected, external
- establishing stakeholder claims
- assessing importance of stakeholder groups
- deciding upon a response
what is a stakeholder needs analysis
organisations researching stakeholders and their needs
benefits of CSR strategies
- determine resources available to be socially responsible
- proactively respond to threats
- decide how to manage stakeholder relationships
- develop sustainable business practices
- balance economic/social value
- determine capacity of organisation to pursue philanthropic activities
consequences of CSR
- suppliers must meet standards
- suppliers adherence must be verified
- failures in supply chain will reflect on reputation
- higher prices for more CSR responsibility
which areas of a business are impacted by CSR operations
- process design; waste reduction, energy efficiency etc
- product design; sustainable materials, recycling etc
- quality management; high quality to reduce waste
what are the G4 standards
- economic = performance
- environmental = emissions, fuel, transport, energy etc
- social = labour practices, human rights, society, product responsibility
what principles should be considered in a sustainability report
- stakeholder inclusiveness = how concerns are addressed
- sustainability context = wider context view
- materiality
- completeness
what are GRI’s quality requirements
- balance
- comparability
- accuracy
- timeliness
- clarity
- reliability
what does the ILO’s Tripartite Declaration cover
- general policies
- employment
- training
- conditions of work/life
- industrial relations
what do the principles of the UN Global Compact cover
HUMAN RIGHTS
LABOUR STANDARDS
ENVIRONMENT
ANTI CORRUPTION
what are the aspects covered in the international integrated reporting council
- strategic focus and future orientation
- connectivity of information; how is capital being used
- stakeholder relationships
- materiality
- conciseness
- reliability and completeness
- consistency and comparability; KPIs
what is capital used for
assess value creation
types of capital
- financial
- manufactured
- intellectual; eg patents
- human
- social and relationship
- natural; eg minerals
what 3 aspects does Elkington’s triple bottom line cover
- economic prosperity = benefit enjoyed by host society
- environmental quality = minimise harm
- social justice = beneficial practices towards labour/community
alternative approaches to CSR
- integrated approach = brand and CSR in synchrony
- selective approach = CSR in certain ways eg through sub-brands
- invisible approach = use CSR to bolster trust in brand
which areas do the 15 oecd policies cover
- info disclosure
- respect for labour standards
- contribution to sustainable development
- respect for human rights
- supply chain responsibility
- consumer interests
- science and tech
- competition
- taxation
- environment
- bribery and corruption
- whistleblower protection
more detailed approach to a CSR strategy
- make published commitment to CSR
- determine objectives and create a CSR strategy to achieve them
- align CSR with core competencies
- integrate CSR into culture, governance and strategy
- develop KPIs to measure impact of strategies
OECD’s general corporate responsibility policies
The OECD’s general principles of corporate social responsibility are:
- Be respectful of human rights.
- Encourage local capacity.
- Abstain from improper involvement in local political activities.
- Reject exemptions not contemplated in the regulatory framework related to environmental, health, safety, labour, taxation, financial incentives, or other issues.
- Encourage the formation of human capital.
key issues found in the CIMA and AICPA report ‘evaluation of corporate sustainability practices’
- sustainability is long term; helps the planet
- accountants have key role to play in reporting
- sustainability plans to comply with laws/regulations, reduce risk, cut costs and improve efficiency
CIMA 2010 research article conclusions
- strong ethics add value to bottom line
- ethics come from the top
- management info vital to track effectiveness
- reporting must provide evidence of impact
- management accountants responsible for ethical culture
