Corporate Social Responsibility Flashcards
CSR definition (Carroll)
‘Encompasses the economic, legal, ethical and philanthropic expectations placed on organisations by society at a given point of time’
The obligations goes beyond statutory obligation to comply with legislation
Economic - shareholder return, employee safety and pay, quality product @ fair price
Legal - follow legislation as minimum
Ethical - do what is right, just and fair
Philanthropic - discretionary behaviour of charity, ppl lives, arts
Four different models that identify the different positions/stances organisations can take in regards to social and ethical responsibilities
(1) CSR (Carrol) - Economic, Legal, Ethical, Philanthropic
(2) Corporate Citizenship (Matten et al) - limited view, Equivalent view, Extended view
(3) Ethical Stances (Johnson and Scholes) - Short term shareholder interest, Long term shareholder interest, Multiple shareholder obligations, Shaper of society
(4) 7 Responsibility viewpoints (Gray Owen and Adams)
7 Responsibilities Viewpoint (Gray, Owen and Adam)
(1) Pristine Capitalists
No moral responsibility beyond obligation to shareholders and creditors
(2) Expedients
Social responsibility appropriate if in business economic interest
(3) Proponents of the social contract
There exists effectively a contract between organisations and those affected by their decisions
(4) Social Ecologists
Business activities result in resource exhaustion, waste and pollution and must be modified
(5) Socialists
Promote egalitarian equality. Business decisions not to be determined by requirements of capitalism and materialism but by equality
(6) Radical feminists
Promote feminine values such as co-operation and empathy
(7) Deep ecologists
Man has no extra right to resources than other species
Sustainability
• ‘Limiting the use of depleting resources to a level that can be replenished’
Sustainable development - development that meets need of the present without compromising the ability of future generations to meet their own needs
• Two approaches :
Weak Sustainability - focus on human species, natural environment is a resource. Western economic viewpoint
Strong Sustainability - sustain all species. Harmony with natural world
• Environmental footprint - Measure of impact particular business activity has on environment including resource depletion, aesthetic impact, pollution, long term waste disposal, local quality of life (tourism)
Social Accounting
The communication of social and environmental effects of a company economic actions to stakeholders
Social Footprint - measure of the impact (on people, society, communities; good or bad) that an entity can have on a given set of concerns or stakeholders interests.
Reporting guidelines framework include:
- ISO 14000 Environmental standard
- Global Reporting Initiative (GRI)
- AA1000 Standard (3BL)
- FTSE4 Good Index
Social Audit
Process of checking if organisation has achieved set target
Involves:
- Establish if organisation has rationale for engaging in socially responsible activities
- Current environmental programmes are congruent with mission of company
- Assessing objectives and priorities related to programmes
- Evaluate companies involvement in such programmes past, present, future
Environmental Reporting
Purpose
- serve information needs of internal and external stakeholders
- reduce agency gap, company less able to conceal important information
Advantages
- Demonstrates firm’s responsiveness to issues that threaten the perception of their ethics and competence
- Cover environmental risks, therefore shareholders can assess how that risk is being effectively managed
- Encourages operational efficiency and saves costs as data from report provides useful management information
Environmental Audit
A systematic, documented, periodic and objective evaluation of how well an entity, its management and equipment are performing.
Aim: safeguard the environment
Actions:
- Facilitate managements control of environmental practises
- Assess compliance with entity policy and external regulations
- Help identify possible liabilities
- Assess threat of unethical behaviour
- Form of marketing for investors sensitive to environmentally and socially questionable presentation on portfolio
Environmental Management Systems
EMS
Eco-Management and Audit Scheme (EMAS) Requirements: - Environmental policy - On-site environmental review - Environmental management system - Environmental audits - A public environmental statement
ISO14000 ISO14001 prescribes that an EMS must have : - An environmental policy statement - Assessment of environmental aspects - Monitoring and reporting - Internal audits for senior management - Public declaration of compliance
Global Reporting Initiative (GRI)
- Resulted from failure of current governance structures to respond to changes in global economy
- Aims to develop transparency, accountability, reporting and sustainable development
- Vision is that reporting on economic, environmental and social importance as routine and comparable as financial reporting
Guidelines of a framework of a sustainability report:
(1) Vision and Strategy
Description of strategy of sustainability including CEO statement
(2) Profile
Overview of structure and operations, and scope of report
(3) Governance Structure and Management Systems
Description of structure, policies and management systems
(4) GRI Content Index
Identifying where information listed in guidelines is in the annual report
(5) Performance Indicators
Measure of impact divided into integrated, economic, environmental and social performance indicators
Integrated Reporting (IR)
- is a process that results in a periodic integrated report about value creation overtime and communications regarding value creation.
- Integrated Report : “A concise communication about how an organisations strategy, governance, performance and prospects, in the context of its external environment, lead to the creation of value in the short, medium and long term”
- Different from other forms of reporting:
- Focus on process not product
- Uses series of capitals to illustrate how an organisation creates value for ALL stakeholder
• Category of capital
Financial - funds available for use in production or service provision
Manufactured - manufactured physical objects used in production or service provision. Inc building infrastructure
Human - skills, experience, motivation
Intellectual - intangible assets providing competitive advantage
Natural - inputs to goods and services from natural environment
Social - institutions and relationships within and between communities and groups
• 7 Guiding principles
(1) Strategic and forward looking
(2) Connectivity across all relationship that create value
(3) Stakeholder relationships
(4) Materiality - disclosing matters that substantially affect value creation
(5) Reliability and Completeness - avoid bias
(6) Conciseness - encourage people to read about
(7) Consistent and Comparable
Developing and pursing a CSR
> Authentic, firm and public commitment to CSR by board
Determine critical business obj and priorities of company
Develop CSR strategy that contribute to achievement of those obj
Align CSR with org core competencies
Integrate CSR into culture, governance and strategy development of company
Develop key performance indicators to measure impact of CSR strategies
4 Strategies from Carroll
Reaction - deny responsibilities
Defence - admit responsibility but fight it
Accommodation - accept and do what demanded
Proaction - seek to go beyond industry norms
