Social Responsibility And Sustainability: How B...
The term Corporate Social Responsibility (CSR) has a fluid definition, and can vary across different corporate programs that benefit the community (Chandler, 2015). In simple terms, CSR is any action a corporation does to benefit the relationship between a corporation and the community, and to make a positive difference in the community with employee engagement, financial support, and volunteerism. Corporate social responsibility is a business trying to do well in the community through responsible actions.
Social Responsibility and Sustainability: How B...
While environmental sustainability is usually a part of corporate social responsibility, CSR does not only focus on sustainability. For many companies, treating the environment well is important, and this value may be reflected in their CSR programs. For example, to counteract the damage Ford's car industry causes to the environment, they try to practice sustainability and community responsibility in their CSR practices in order to be as environmentally friendly as possible. They are trying to limit the harm they make on the environment, and do so partially through corporate social responsibility.
Ethical corporations are vital to our society. When a company chooses to support the community and be responsible, they choose to support ethical business practices. In the case of Patagonia, customers are confident that the products they buy are not made using sweatshops, do use ethically sourced materials, and come from environmentally conscious factories. These are important elements of corporate social responsibility and sustainability because this provides companies an opportunity to raise awareness and make changes for environmental rights.
Corporate social responsibility and sustainability are important to corporations for a variety of reasons. Motivations that affect corporate social responsibility are social power, public image, money and wealth, and conformity (Crowther, 2018). Other aspects that make these areas important are values, which give motivations meaning, and stakeholders, who help drive a CSR program.
While making decisions about actions toward corporate social responsibility and sustainability, companies must be aware of the stakeholders who are impacted (Laszlo, 2003). In terms of the environment, stakeholders include employees, local communities, and nature. This list is not exhaustive, but represents the areas that will be directly affected by sustainability.
Corporate Social Responsibility (CSR) or Social Impact is a form of international private business self-regulation[1] which aims to contribute to societal goals of a philanthropic, activist, or charitable nature by engaging in, with, or supporting professional service volunteering through pro bono programs, community development, administering monetary grants to non-profit organizations for the public benefit, or to conduct ethically oriented business and investment practices.[2][3] While once it was possible to describe CSR as an internal organizational policy or a corporate ethic strategy[4] similar to what is now known today as Environmental, Social, Governance (ESG); that time has passed as various companies have pledged to go beyond that or have been mandated or incentivized by governments to have a better impact on the surrounding community. In addition national and international standards, laws, and business models have been developed to facilitate and incentivize this phenomenon. Various organizations have used their authority to push it beyond individual or even industry-wide initiatives. In contrast, it has been considered a form of corporate self-regulation[5] for some time, over the last decade or so it has moved considerably from voluntary decisions at the level of individual organizations to mandatory schemes at regional, national, and international levels. Moreover, scholars and firms are using the term "creating shared value", an extension of corporate social responsibility, to explain ways of doing business in a socially responsible way while making profits (see the detailed review article of Menghwar and Daood, 2021).[6]
Considered at the organisational level, CSR is generally understood as a strategic initiative that contributes to a brand's reputation.[7] As such, social responsibility initiatives must coherently align with and be integrated into a business model to be successful. With some models, a firm's implementation of CSR goes beyond compliance with regulatory requirements and engages in "actions that appear to further some social good, beyond the interests of the firm and that which is required by law".[8]
Since the 1960s,[16] corporate social responsibility has attracted attention from a range of businesses and stakeholders and been referred to by a number of other terms, including "corporate sustainability", "sustainable business", "corporate conscience", "corporate citizenship",[17] "purpose," "social impact," "conscious capitalism", and "responsible business".[18][19][20]
Carroll extended corporate social responsibility from the traditional economic and legal responsibility to ethical and philanthropic responsibility in response to the rising concerns on ethical issues in businesses.[23] This view is reflected in the Business Dictionary that defines CSR as "a company's sense of responsibility towards the community and environment (both ecological and social) in which it operates. Companies express this citizenship (1) through their waste and pollution reduction processes, (2) by contributing educational and social programs, and (3) by earning adequate returns on the employed resources."[24][25]
The relationship between corporate social responsibility and a firm's corporate financial performance is a phenomenon that is being explored in a variety of research studies that are being conducted across the world. Based on these research studies, including those conducted by Sang Jun Cho, Chune Young Chung, and Jason Young, a positive relationship exists between a firm's corporate social responsibility policies and corporate financial performance. To investigate this relationship, the researchers conducted a regression analysis and preceded the analysis with the provision of several measures that they utilized to serve as proxies for key financial performance indicators (i.e. return on assets serves as a proxy for profitability).[48]
In the 21st century, corporate social responsibility in the supply chain has attracted attention from businesses and stakeholders. A corporations' supply chain is the process by which several organizations, including suppliers, customers, and logistics providers work together to provide a value package of products and services to the end-user, who is the customer.[51]
Corporate social irresponsibility in the supply chain has greatly affected the reputation of companies, leading to a lot of costs to solve the problems. For instance, incidents like the 2013 Savar building collapse, which killed over 1000 people, pushed companies to consider the impacts of their operations on society and the environment. On the other hand, the horsemeat scandal of 2013 in Europe affected many food retailers, including Tesco, the largest retailer in the United Kingdom,[52] leading to the dismissal of the supplier. Corporate social irresponsibility from both the suppliers and the retailers has greatly affected the stakeholders who lost trust in the affected business entities, and although sometimes it is not directly undertaken by the companies, they become accountable to the stakeholders. These surrounding issues have prompted supply chain management to consider the corporate social responsibility context. Wieland and Handfield (2013) suggested that companies need to include social responsibility in their reviews of component quality. They highlighted the use of technology in improving visibility across the supply chain.[53]
All six of the corporate initiatives are forms of corporate citizenship. However, only some of these CSR activities rise to the level of cause marketing, defined as "a type of corporate social responsibility (CSR) in which a company's promotional campaign has the dual purpose of increasing profitability while bettering society."[54]
An engagement plan can assist in reaching the desired audience. A corporate social responsibility individual or team plans the goals and objectives of the organization. As with any corporate activity, a defined budget demonstrates commitment and scales the program's relative importance.
Corporate social responsibility and its resulting reports and efforts should be verified by the consumer of the goods and services.[69] The accounting, auditing, and reporting resources provide a foundation for consumers to verify that their products are socially sustainable. Due to an increased awareness of the need for CSR, many industries have their own verification resources.[70] They include organizations such as the Forest Stewardship Council (paper and forest products), International Cocoa Initiative,[71] and Kimberly Process (diamonds). The United Nations Global Compact provides frameworks not only for verification, but also for reporting human rights violations in corporate supply chains.[72]
For companies operating in emerging markets, engaging in CSR practices enables widespread reach into a variety of outside markets, an improved reputation, and stakeholder relationships.[88] In all cases (emerging markets vs. developed economies), implementing CSR policies into the daily activities and framework of a company has been shown to allow for a competitive advantage versus other companies, including the creation of a positive image for the company, improved stakeholder relationships, increased employee morale, and attraction of new consumers who are committed to social responsibility.[88] Despite all of the benefits, it is important to note that several drawbacks exist, including possible accusations of hypocrisy, the difficulty of measuring the social impact of CSR policies, and oftentimes placing companies at a disadvantage against competitors when prioritizing CSR ahead of advancing a company's R&D.[88] 041b061a72