Photographer : Patrick Boury |
What is corporate social responsibility?
Corporate social responsibility (CSR) has been defined by the World Business Council for Sustainable Development as “the continuing commitment by companies to behave ethically and to contribute to economic development, while improving the quality of life of the workforce and their families, as well as the local community and society at large.”
Sounds important doesn’t it? But what does this actually mean for companies and the community?
Put simply, being a good corporate citizen is about a company making a lasting commitment to giving something back to the community. This principle obligates a company to consider and integrate social and environmental concerns, as well as economic concerns, into its operations and decision-making. A company is required to look out for more than just the interests of its shareholders—it must look after the interests of all people who affect, or are affected by, the business, such as its employees, customers, suppliers, community organisations or even the local neighbourhood.
This involves:
- acting responsibly in the workplace by creating a safe and healthy working environment that upholds the rights of employees
- acting responsibly in the market place by maintaining high standards of business practice; and
- taking responsibility for the social and environmental impact of business operations
By balancing the social, environmental and economic obligations of a company, CSR aims to make sure that business operations and development are ‘sustainable,’ that is they meet the needs of the present generation, without interfering with the ability of future generations to meet their own needs.
What does this involve?
Because the characteristics and circumstances of individual companies are different, the way CSR is put into practical action varies from company to company. Some examples of how this commitment may be undertaken include:
- investing in community projects
- supporting research initiatives
- introducing occupational health and safety measures
- adopting environmentally friendly practices, or
- drafting and applying a code of ethics to company operations
Some examples
Even after reading the definitions of CSR, this principle can still seem pretty complicated. A great way of understanding exactly what is meant by CSR, is by taking a look at some practical examples in Australia.
One of the ways in which
Woolworths (the fresh food people) undertake their CSR obligation, is through their commitment to the environment. As part of this obligation, Woolworths created the ‘greenbag’ as a plastic bag alternative and also provides training to its 30,000 staff on how to ‘fill the bag and not the environment.’
AGL (Australia’s energy company) is another good example. It operates the ‘energy for life’ community investment program, which involves paying the winter energy bills for homeless shelters in NSW, Victoria and South Australia.
For
McDonalds, the motto ‘giving back’ forms an ‘integral part of everything [they] do.’ One example of how McDonalds gives back to the community is through the Ronald McDonald House charity. This provides seriously ill children with facilities and support that helps these kids to live a ‘brighter, happier and healthier’ life.
When and why did it come about?
The principle of CSR was developed in response to the incredible power and influence that multi-national corporations have. This power means that their decisions and activities have a massive impact on the lives of ordinary people. These impacts are varied—they may be as global as pollution resulting from production processes, as local as the employment opportunities provided to the community or as personal as an individual’s addiction to a company product. As a result, society’s expectations of what corporations should and shouldn’t do have changed from what they were in the past. These days corporations are expected not only to look out for themselves, but to act responsibly to help meet the social and environmental needs of communities.
Is it compulsory?
No, despite the enormous powers of corporations to affect the global society, CSR is not a legal requirement in Australia. At the moment any commitments made by companies to give back to their communities are purely voluntary. Although a lot of companies take this commitment seriously, there are also many companies that do nothing at all.
How do I know this?
Corporate Responsibility Index,
http://www.corporate-responsibility.com.au/about/c...
Redmond P 2005, ‘Corporate Social Responsibility: An overview’,
Reform, No. 87, June
St James Ethics,
Corporate social responsibility,
http://www.ethics.org.au/things_to_read/articles_t...
Standen M 2005, ‘The corporation in society’,
Reform, No. 87, June
Wikipedia Free Encyclopedia,
Corporate social responsibility,
http://en.wikipedia.org/wiki/Corporate_social_resp...
