Chapter 11 - Corporate Social Responsibility And Sustainability Flashcards
Define CSR
“Business decision making linked to ethical values, compliance with legal requirements and respect for people, communities and the environment.”
(Business for Social Responsibility)
Outline some example of how companies might act in accordance with an awareness of social responsibility
- treat employees with respect
- operate ethically
- respect human rights
- sustain the environment
- be responsible neighbours
What is a corporate citizen?
A company that seeks to behave as a good citizen, by respecting its social responsibilities.
Define sustainability.
“Development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”
(Brundtland Report 1987)
What are the six capitals whose value companies should seek to maintain or enhance?
Financial Manufactured Human Intellectual Natural Social
What is another term for “CSR”?
Corporate citizenship.
With which corporate governance approach is CSR in accordance?
The stakeholder approach.
What is the six capitals model?
The concept that an organisation creates or destroys value over time using and affecting 6 types of capital.
Who loves you?
Jade loves you xx
What are the three pillars of CSR?
1 Economic objectives
2 Social objectives
3 Environmental objectives
Which three bodies drive the concern for CSR?
1 Governments
2 Investors
3 Companies themselves
What are the general OECD Guidelines for multinational companies?
- contribute to economic, social and environmental development
- respect human rights
- encourage the development of local business
- encourage the development of human capital
- refrain from seeking exemptions to local laws
- support good governance
- avoid improper involvement in local politics.
How does UK law encourage CSR?
CA S172 requires directors to promote the success of the company while having regard to:
- the interests of the company’s employees
- the need to foster relationships with suppliers and customers
- the impact of company’s actions on the community and environment
- the desirability of maintaining a reputation for high standards of conduct
Why were the OECD guidelines for multinational companies considered necessary?
To encourage the positive contributions that multinationals can make to economic, social and environmental progress.
Define SRI.
Socially Responsible Investing
Explain three approaches to implementing an SRI strategy.
- engagement (seeking to persuade a company toward CSR)
- investment preference (investing based on a balance between CSR requirements and financial opportunities)
- screening (only investing in companies that meet certain criteria).
Name 2 CSR Indexes
1 Dow Jones Sustainability Indices
2 FTSE 4 Good
How might companies be affected by a bad reputation for concerns about social and environmental issues?
They lose consumer and investor confidence and may be subject to government sanctions (e.g. BP)
What are the potential benefits of CSR?
- reduced reputational risk
- reduced business probity risk
- PR and marketing benefits
- commercial and financial benefits
How has AkzoNobel incentivised CSR?
By making 50% of director remuneration linked to CSR targets.
