8 What is Corporate Social Responsibility? Flashcards
Definition Corporate Social Responsibility
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Corporations have a responsibility to those groups and individuals that they can affect, i.e., its stakeholders, and to society at large. Stakeholders are usually defined as customers, suppliers, employees, communities, and shareholders or other financiers.
The Commission has defined CSR as the responsibility of enterprises for their impact on society and, therefore, it should be company led. Companies can become socially responsible by
integrating social, environmental, ethical, consumer, and human
rights concerns into their business strategy and operations following the law
seven core subjects of CSR
8 organizational governance community involvement/development labour practices consumer issues fair operating practices human rights environment
Responsible business conduct (RBC)
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making a positive contribution to economic, environmental and social progress with a view to achieving sustainable development
Sustainable Development
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Sustainable Development is a development that meets the needs of the present without compromising the ability of future generations to meet their own needs. (Brundtland-Commission, 1987)
-Enviroment: preservation of ecological systems, biodiversity, and of natural basics of human life -Economy: economic growth wealth maximization profit maximization -Society: social justice equality of opportunity human rights
UN Global Compact
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-worlds largest corporate sustainability initiative
-participating corporations commit at CEO level
ten principles on human rights, labor, environment and anti-corruption and take actions to support the Sustainable Development Goals (SDGs)
Sustainability Development Goals
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- adopted by all UN Member States in 2015 as part of the 2030 Agenda for Sustainable Development
- 17 Sustainable Development Goals (SDGs) and 169 targets of the new agenda will be monitored and reviewed
Sustainable Development Report 2019 and 2020
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Nordic countries top the SDG Index, with Denmark leading followed by Sweden and Finland
Germany: Rank 6
The Index score can be interpreted as a percentage of achievement
No country is on track achieving the 17 goals
Difficulty in getting data due to Covid 19 in 2020
Carroll’s Four Part Definition of CSR + Caroll`s Pyramid of CSR
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siehe VL
Shareholder Value and Social Responsibility
Milton Friedman’s provocative point of view (1970):
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- it must mean that he is to act in some way that is not in the interest of his employers.
- at the expense of corporate profits
- spending someone else’s money for a general social interest
- reduce returns to stockholders
- make as much money as possible while conforming to the basic rules of the society
-only people can have responsibilities not a legal construct like a company
However, from Friedman’s point of view, this should be the individual shareholder’s objective and not the manager’s.
Shareholders should decide how to use their capital for social concerns.
Seven Types of CSR acitivies (Blowfield & Murray 2019)
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1.Leadership, vision, and values
-Defining corporate purpose, values, and vision translating into policies and procedures
-Ethical leadership also by empowering employees 2.Marketplace activities
-Product responsibility with CSR product labeling and responsible customer relations
-Ethical competition and making markets work for all 3.Workforce activities
-Diversity and equality
-Responsible remuneration, work-life balance, health, safety, and skills development
Employee communication and representation
4.Supply chain activities
-Driving social and environmental standards through the supply chain
-Being a fair customer
5.Stakeholder engagement
-Responding to and managing stakeholders
-Transparent reporting and communication
6.Community activities
-Financial donations and volunteering employee time
-Giving gifts and being a good neighbor
7.Environmental activities
-Resource and energy use, pollution, and waste management
-Environmental product responsibility
-Transport planning
