"Corporate responsibility" redirects here. For other types of responsibility, see Corporate

responsibilities.

Corporate social responsibility (CSR, also called corporate conscience, corporate

citizenship, social performance, or sustainable responsible business/ Responsible

Business)[1] is a form of corporate self-regulation integrated into a business model. CSR policy

functions as a built-in, self-regulating mechanism whereby a business monitors and ensures its

active compliance with the spirit of the law, ethical standards, and international norms. In some

models, a firm's implementation of CSR goes beyond compliance and engages in "actions that

appear to further some social good, beyond the interests of the firm and that which is required

by law."[2][3] CSR is a process with the aim to embrace responsibility for the company's actions

and encourage a positive impact through its activities on the environment, consumers,

employees, communities, stakeholders and all other members of the public sphere who may

also be considered as stakeholders.

The term "corporate social responsibility" came into common use in the late 1960s and early

1970s after many multinational corporations formed the term stakeholder, meaning those on

whom an organization's activities have an impact. It was used to describe corporate owners

beyond shareholders as a result of an influential book by R. Edward Freeman,Strategic

management: a stakeholder approach in 1984.[4]

Corporate social responsibility is basically a concept whereby companies decide voluntarily to contribute to a better society and a cleaner environment. Corporate social responsibility is represented by the contributions undertaken by companies to society through its business activities and its social investment. This is also to connect the Concept of sustainable development to the company’s level.

Over the last years an increasing number of companies worldwide started promoting their Corporate Social Responsibility strategies because the customers, the public and the investors expect them to act sustainable as well as responsible. In most cases CSR is a result of a variety of social, environmental and economic pressures.

The Term Corporate Social Responsibility is imprecise and its application differs. CSR can not only refer to the compliance of human right standards, labor and social security arrangements, but also to the fight against climate change, sustainable management of natural resources and consumer protection.

The concept of Corporate Social Responsibility was first mentioned 1953 in the publication ‘Social Responsibilities of the Businessman’ by William J. Bowen. However, the term CSR became only popular in the 1990s, when the German Betapharm, a generic pharmaceutical company decided to implement CSR. The generic market is characterized by an interchangeability of products. In 1997 a halt in sales growth led the company to the realization that in the generic drugs market companies could not differentiate on price or quality. This was the prelude for the company to adopt CSR as an expression of the company’s values and as a part of its corporate strategies. By using strategic and social commitment for families with chronically ill children children, Betapharm took a strategic advantage.

In July 2001, the European Commission decided to launch a consultative paper on Corporate Social Responsibility with the title „Promoting a European Framework for Corporate Social Responsibility“. This paper aimed to launch a debate on how the European Union could promote Corporate Social Responsibility at both the European and international level.

The paper further aimed to promote CSR practices, to ensure the credibility of CSR claims as well as to provide coherence in public policy on CSR.

Corporate Social Responsibility: definitions and meanings

The are several definitions for Corporate Social Responsibility (CSR) that can be

found in literature, each characterized by its own meaning and attribute.

The World Business Council for Sustainable Development defines the CSR

as a “business' commitment to contribute to sustainable economic

development, working with employees, their families, the local

community, and society at large to improve their quality of life”. Under

this point of view, the CSR rests on the fundamental pillars of both the

economic growth and the quality of life as an engine for “sustainable”

development.

The Canadian Centre for Philanthropy: CSR is “a set of management

practices that ensure the company minimises the negative impacts of

its operations on society while maximising its positive impacts”. This

definition therefore provides the link between the decisions tied to the

social responsibility and “the business" derived from the respect of the

lawyer instruments, the population, the communities, and the

environment.

The Corporate Social Responsibility Newswire Service: the CSR is “the

integration of business operations and values whereby the interests of all

stakeholders including customers, employees, investors and the

environment are reflected in the company’s policies and actions.”

The UNI (Ente Nazionale Italiano di Unificazione) in Italy. The principles

on which the CSR is based can be summarized as follows: first, its

importanceThe Importance of CSR

“It’s all about the bottom line”. There are few people, whether in the private or public sector, who haven’t heard that phrase. Because the bottom line refers to the last line of a financial statement – profit or loss – it has traditionally been the ultimate measure of short and long-term organizational decisions, referring to the economics of costs and revenue.

While economics is still important, the increased complexity of global markets and sophistication of consumers, as well as the increased importance of environmental and social impacts, have changed the way successful organizations look at what positively impacts their bottom line.

Today, organizations that want to achieve long-term success must consider what is known as the Triple Bottom Line: Economic, Environmental and Social. This Triple Bottom Line is also known as the 3Ps: Profit, Planet and People.Corporate Social Responsibility (“CSR”), as a strategic practice, is key to organizational success because it is one of the few practices that can positively impact all three elements of the Triple Bottom Line, contributing to a healthy bottom line and long-term sustainability.

Because CSR can influence economic, environmental and social factors in a variety of ways, there is no “one size fits all” approach. An effective CSR strategy must consider alignment with the organization’s business strategy, commercial added value, and sustainability of impact. The benefits of an effective CSR approach to an organization can include:

Stronger performance and profitability Improved relations with the investment community and access to capital Enhanced employee relations and company culture Risk management and access to social opportunities Stronger relationships with communities and legal regulators

At Schema, it is our role to understand our clients’ short and long-term organizational objectives, and develop effective CSR strategies that are sustainable and can be implemented, measured and reported on.

advantaBenefits of Corporate Social Responsibility

When corporations and businesses participate in Corporate Social Responsibility, it not only benefits the business itself, but its employees, customers, community, and the world as a whole.

What is Corporate Social Responsibility?Corporate Social Responsibility can also be considered corporate citizenship, or responsible business. It is a business model adopted by corporations that wish to improve their company, communities, and more. It is a self-regulating system that commits the corporation to following the laws of business, maintaining a high ethical standard, and following international norms. Often, Corporate Social Responsibility results in businesses committing themselves to certain social goods, or even an attempt to improve the environment. Overall, Corporate Social Responsibility is a company’s promise to create a positive impact in the world; this does not mean they do not have a profit motive, it merely means they care about the world while trying to make money.

BusinessOne of the main benefits of Corporate Social Responsibility is to the business itself. It creates a positive image for the business, and will result in more customers. Often, customers will want to support a business that does good for the community. This is because when the customer supports that business, they are also helping themselves in the future. In addition, investors are more likely to become a part of the business, because people want to invest in a business that has high ethical standards and has a strong customer base. Also, energy-saving measures, or increasing sustainability, will save the company energy and money in the long-run. Overall, Corporate Social Responsibility will result in winning over customers and more investors, which will give the business more money.

EmployeesA survey conducted on “Net Impact” found that more than half of workers wish to be a part of a company where they can make an impact, and that making an impact would make them happy. This means that a corporation that practices Corporate Social Responsibility will have happier workers, which benefits the company and the employees. In addition, 35% of the respondents said that they would accept a pay cut in order to work for a company that practices Corporate Social Responsibility. This statistic is very telling; to many people, money is less important than making a difference in the world, and this indicates that a business that cares about the world will be more successful as a whole.

Community and the WorldThe benefits of Corporate Social Responsibility to the local community and the world is self-explanatory. A company committed to Corporate Social Responsibility will often support projects that will do things like lower pollution, or lower energy output, or in some cases, companies will even give portions of their profit to charities, or will have their employees volunteer for community-building non-profits. Overall, a commitment to Corporate Social Responsibility will help the community surrounding the corporation, but it will also have a larger impact on the world, particularly if multiple companies commit to it.

Specific ExampleAn example of Corporate Social Responsibility is through “The Body Shop.” The Body Shop published a full report on their Corporate Social Responsibility initiatives, and they were one of the first to do so. The founder Anita Roddick was committed to protecting the environment, as well as protecting the rights of both humans and animals. The corporation has even founded their own charity titled The Body Shop foundation, which helps fund those pioneers in business. The Body Shop has also started a fair trade program, with a strong anti-animal testing stance. Since then, it has made profits of over $60 million a year.

The Body Shop is just a single example of a corporation that is committed to Corporate Social Responsibility, but it is a trend that has been growing over the past few years. The benefits to Corporate Social Responsibility expand past simply

helping a charity, or giving the company a good image. It affects everyone in the business, including shareholders, employees, and customers, as well as everyone in the community, and in some cases, the world.

- Corina BalsamoSources: Sustainable Business Forum, CNBC, Simply CS

Disadvantage

What Are the Disadvantages of Corporate Social Responsibility?By Neil Kokemuller, eHow Contributor 

 

 

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Environmental requirements of CSR are often too expensive for many companies.

Corporate social responsibility (CSR) is a prominent 21st century business ideology that heightens expectations of companies regarding social and environmental standards. The results of CSR compliance are generally viewed as a good thing by most companies. Challenges lie in allocating time and resources necessary to develop a CSR approach that meets governmental and social standards and achieves compliance with

informal CSR guidelines related to social and environmental responsibility.

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Reasons for Corporate Social Responsibility

1. Role of Profito One of the biggest features addressed by CSR is its intent to cause

companies to recognize responsibilities to stakeholders outside of shareholders. This includes customers, communities, employees and suppliers. While proponents of CSR point out the long-term benefits of taking care of these core relationships, shareholders are often deterred at the notion that companies will invest in anything that does not create immediately obvious financial gain. With CSR, detecting measurable bottom line benefits is a challenge as social and environmental programs are hard to account for with regard to financial gain.

Competitive Disadvantage

o One of the most common arguments companies make when indicating reluctance to CSR policies is the disadvantage it causes against companies that do not. In other words, if company A does its part to invest resources to take care of its communities and the environment and company B does not, company B retains its resources, including money, for other business pursuits. Thus, without strict adherence industry wide, some companies argue that they cannot fall behind by putting money into CSR programs.

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Loss of Focus

o A main driver at the onset of CSR was increased interest in making the customer a primary focus of business operations. This coincides with continued realization that customer retention and loyalty are keys to long-term business success. Detractors of CSR as a major component of corporate governance argue that guidelines have expanded beyond this

basic initial emphasis. David Vogel points out in his "CSR Doesn't Pay" article for Forbes, that many companies that abide by CSR guidelines do so more from fear of public backlash than because they believe it is good for long-term business performance. He adds that most parties generally agree that taking care of customers is good in the long run, but expensive requirements in human rights, environmental sustainability and community development are too much to ask of many companies.

Lasting Impact

o How long CSR will remain a prominent business concern is a common question asked by those who argue against CSR as a major concern with corporate governance. According to the My Efficient Planet website, CSR has existed for more than 50 years. However, its prominence as a major business consideration has certainly increased in the 21st century due to heightened awareness of ethical issues in business and environmental preservation standards. Detractors argue that CSR emphasis is a short-term fad in response to prominent scandals like Enron, and current interest in green-friendly practices.

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