Corporate social responsibility and stakeholders Flashcards
What is the universally accepted definition of CSR?
How does the EU define CSR?
No universally accepted definition
= concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis’
How does the World Business Council for Sustainable Development define CSR?
= the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large
How does King IV, the South African Corporate Governance Code, define CSR?
= Corporate citizenship = the recognition that the organisation is an integral part of the broader society in which it operates
Where was the term ‘corporate citizenship’ originally used?
What does it describe?
What does it require companies to do?
• Term originally used in King II
• Describes how companies should act in the same way as the citizens of the countries in which they operate to meet the countries’ legal, social, ethical and economic responsibilities expected of its citizens
• Requires companies to balance the financial needs of its shareholders with the societal need of the countries within which it operates
What are the 2 ways sustainability can be defined?
- Refers to an organisation focusing on its long term survival
○ = Requires organisations to balance their current requirements for operating their businesses without compromising the needs of future generations
○ CSR obviously plays a part in ensuring the long-term survival of the organisation - Refers to the sustainability of the planet
○ = How a company carries out its operations, develops strategy, and manages risk to have a positive impact or lessen a negative impact on the environment
○ Definition more closely aligns with CSR
What is the difference between business ethics, corporate responsibility, and sustainability?
· Business ethics is about integrating the company’s ethical values into business behaviours and functions. Essentially, the organisation doing ‘the right thing’.
· CR is about doing good deeds, having a positive effect on communities and environment and lessening negative impacts;
· Sustainability is about the long term
Name 3 aspects of CSR that are required by law and regulations?
What are the 4 driving factors on why many CSR activities carried out by organisations voluntarily?
= those that provide for health and safety at work, employee protection, and environmental laws
- organisations themselves
- governments and bilateral organisations
- investors
- customer demand
Organisations are voluntarily carrying out CSR activities as they have realised they can use them for what 5 things?
- To obtain competitive advantage =Cadbury announced that its products would be certified by Fairtrade
- To reduce risk (especially reputation risk)
- To attract human capital = employees want to work for organisations pursuing CSR
- For innovation
- For sustainability = to be sustainable organisation must focus on CSR activities e.g. sourcing the different resources they need = develop strategies for utilising their resources more effectively and efficiently
Why have governments in many countries become interested in CSR?
How have governments helped organisations contribute to CSR?
What did the World Bank Group do?
•= due to the pressure from their citizens to protect the environment and improve the quality of life for those citizens
• Introduced Laws and regulatory requirements setting minimum standards for protection of the environment and society at large e.g. health and safety, protection of employee rights, UK Modern Slavery Act, consumer rights etc.
World Bank Group = issued guidance in areas such as human rights and good corporate governance practices
Why do many investors take a company’s CSR practices into consideration in their investment decision making?
What 3 factors may investors consider?
What is socially responsible investment (SRI)?
• They recognise the impact of CSR issues on success
- company’s record on human rights and child labour
- impact of the company’s activities on the environment
- the nature of business
Some investors won’t invest in products they consider harmful to society = tobacco = type of investment referred to as (SRI)
What is Greenwashing?
What will stakeholders be looking out for?
= practice of making an unsubstantiated or misleading claim about the environmental benefits of a produce, service, technology, or company practice
• e.g. an organisation committing to reduce the environmental impact of its product line before the products are even ready
• looking out for organisations that are not delivering on the promises they make
• If found out = risk a drop in brand value and trust, loss of sales and drop in share price E.g. VW ‘Diselgate’
What has been the impact of the millennial generation on CSR?
• Millennials constantly share views and opinions on social media = has led to an overwhelming demand for CSR as the potential workforce and consumer base look to do business only with those whom they feel are making a positive impact on society
What are the 4 categories of CSR activities?
- Pet projects = reflect the personal interests of board members
• Activities get a lot of press coverage but offer minimal benefits to society or the organisation
• E.g. sponsoring an art exhibition - Philanthropy = large form of charitable donations
• e.g. large donations of money to charitable organisations
• Often little attention with these donations = questionable benefits to the organisation - Propaganda = primarily focus on building the organisation’s reputation and have little benefit to society
• E.g. sponsoring large sporting events
• If perceived there is a gap between the organisation’s words and actions, this may be dangerous to the reputation of the organisation - Partnerships = CSR activities that create shared value for the organisation and society
• 2004 Unilever created the Dove Self-Esteem Project = aimed at helping girls and young women to develop a positive relationship with the way they looked = have reached over 20 million young people
What are the 7 essential principles to create win-win CSR partnerships as stated by Albani and Henderson?
- Identify clear reasons to collaborate
- Find a fairy godmother = important for both organisations to identify a core group of people totally committed to the partnership
- Set simple, credible goals
- Get professional help
- Dedicate good people to the cause
- Be flexible in defining success
- Prepare to let go = organisations should plan an exit strategy for the partnership
CSR FRAMEWORKS
What do the UN Guiding Principles on Business and Human Rights ensure?
Which businesses do they apply to?
What are countries required to do?
• principles ensure businesses play a role in the protection of human rights
• principles apply to all businesses regardless of their size, sector, location ownership or structure
• Countries are required to put in place effective remedies for those who suffer from business-related human rights abuses
