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
