The Grey Chronicles

2009.October.11

Dissection of Corporate Social Responsibility



After the post on Corporate Social Responsibility [CSR], some readers emailed that I have failed to offer a definition in the discussion. Although I have implicitly stated that CSR definition is still debated to this day, thus defining it would only muddle the other issues. The purpose of the series of previous posts was to create sort of a compendium of the issues regarding CSR.

Disclosure of the Impact of Corporations on Society: Current Trends and IssuesWhile I was writing the first post on CSR, I initially offered a general definition of the term but decided on the last minute not to include it because the term, per se, was still debated. I stand corrected on this exclusion. The following is from Addendum to the UNCTAD secretariat report which states:

“The definition of corporate social responsibility has undergone substantial modifications over time,and it is still evolving along with society and society’s expectations. There is no globally accepted definition of CSR, nor is there a consensus on a definitive list of the issues it encompasses. It is generally agreed that CSR is neither corporate philanthropy nor strict compliance with law. The common denominator to most definitions is that CSR is a concept whereby enterprises integrate social and environmental concerns into their business policies and operations, with a view to improving their impact on society.” (UNCTAD, 2004)

For discussion purposes, I have quoted the following CSR definitions from private sector, international and civil society organizations. Words have been emphasized for obvious reasons.

“Corporate Social Responsibility is 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.” World Business Council for Sustainable Development [WBCSD]

“Corporate Social Responsibility means open and transparent business practices that are based on ethical values and respect for employees, communities and the environment. It is designed to deliver sustainable value to society at large, as well as to shareholders.” International Business Leaders Forum [IBLF]

CSR “generally refers to business decision-making linked to ethical values, compliance with legal requirements, and respect for people, communities and the environment.” Empresa

“Corporate social responsibility, or CSR, is the commitment of business to contribute to sustainable economic development, working with employees, their families, the local community and society at large to improve their quality of life, in ways that are both good for business and good for development.” World Bank [WB]

“Corporate citizenship can be defined as the contribution a company makes to society through its core business activities, its social investment and philanthropy programmes, and its engagement in public policy. The manner in which a company manages its economic, social and environmental relationships, as well as those with different stakeholders, in particular shareholders, employees, customers, business partners, governments and communities determines its impact.” World Economic Forum [WEF]

“Corporate citizenship refers to the way a company integrates basic social values with everyday business practices, operations and policies. A corporate citizenship company understands that its own success is intertwined with societal health and well being. Therefore, it takes into account its impact on all stakeholders, including employees, customers, communities, suppliers, and the natural environment.” Center for Corporate Citizenship [CCC] at Boston College


Andriof & Waddock (2002) DiagramBased loosely on Andriof and Waddock (2002) diagram which focused on three impacts: economic, social and environmental, as cited by Timothy S. Clark (2008), the most common terms used in the various organizations’ description of Corporate Social Responsibility are: employee, environment, society and community. Hereunder is a tabulation of the common terms, arranged in ascending order, which highlighted terms particularly attributed to human beings.

CSR Terms TabulationSome organizations which offered their definition of CSR were not included in the above because these were deemed too generalized for the purpose of dissecting common terms.

For example, Business for Social Responsibility [BSR] “CSR is operating a business in a manner that meets or exceeds the ethical, legal, commercial and public expectations that society has of business.”

OECD defines “Corporate responsibility involves the effectiveness of the ‘fit’ businesses develop with the societies in which they operate. The core element of corporate responsibility concerns business activity itself.” Meanwhile, the International Chamber of Commerce [ICC] states, “The voluntary commitment by business to manage its activities in a responsible way.”

Furthermore, the United Nations does not add another definition of CSR to the numerous existing ones, but broadens the concept of corporate social responsibility by using the term “global corporate citizenship”, which covers both rights and responsibilities of TNCs in the international context. Multinational corporations can demonstrate “good corporate citizenship by ‘embracing and enacting’, both in their individual corporate practices and by supporting appropriate public policies, a number of universally-agreed values and principles” in the sectors of human rights, labour conditions and environmental protection.

Also, the Amnesty International states: “Economic actors — be they companies or international financial institutions — are accountable for the human rights impact of their activities.” The National Policy Association’s definition of Corporate responsibility “is not just about ethical behaviour and accounting practices, it is also about how companies act toward their stakeholders as well as their shareholders.” While, the Taskforce on the Churches and Corporate Responsibility [TCCR] describes socially responsible corporations have a “stake in ensuring people are treated properly, receive fair and equitable wages, and operate under safe working conditions”. They must “take their responsibilities seriously and become involved in designing, implementing and monitoring social responsibility performance.”


Notes:

Andriof, Jörg. & Waddock S. (2002). Unfolding stakeholder engagement, Unfolding Stakeholder Thinking: Theory, Responsibility and Engagement Andriof, J., Waddock, S., Husted, B. & Rahman, S. [eds]. Sheffield, UK: Greeleaf Publishing, 2002. pp. 19—42. back to text.

Clark, Timothy S. (2008). IROs and CSR: Making Sense of the Corporate Social Relationship, Investor Relations update. Vienna, VA: National Investor Relations Institute, June 2008. pp. 17-20. back to text.

Hopkins, M. (1997). Defining indicators to assess socially responsible enterprises, Futures, 29:7. pp. 581—603. back to text.

Schmidheiny, S., R. Chase & DeSimone, L. (1997). Signals of Change: Business Progress towards Sustainable Development. Geneva: World Business Council for Sustainable Development [WBCSD], 1997. back to text.

United Nations Conference on Trade and Development [UNCTAD] (2004). Disclosure of the Impact of Corporations on Society: Current Trends and Issues. New York and Geneva: United Nations Conference on Trade and Development [UNCTAD], August 2004. pp. 22—24. back to text.

Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 LicenseDisclaimer: The posts herein do not necessarily represent any organization’s positions, strategies or opinions. Read the full version of self-imposed rules for this blog: A New Year; New Rules. Unless otherwise expressly stated, the posts are licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.
Comments are moderated to keep the discussion relevant and civil. Readers are responsible for their own statements.

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1 Comment »

  1. Thanks for this post – it helped to break down the different parts of CSR for me.

    Comment by Duncan Leung — 2009.October.14 @ 05:10 | Reply


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