corporate social responsibility

what is corporate social responsibility (CSR)?

a self-regulating business model that helps a company be socially accountable to itself, its stakeholders, and the public

it helps companies be conscious of the kind of impact they are having on all aspects of society, including economic, social, environmental

CSR is engaging in practices that operate in a way that enhances ________

society and environment instead of contributin negatively to them

what are the benefits of engaging in CSR?

benefits the society

boosts the brand:

-gives the brand value

-creates customer trust

-grows the company

-increases the net income

-investor relationships

-brand recognition

-employee engagement

-risk mitigation

-easier to access funding

is CSR mandatory for every business?

no, it is a voluntary instrument.

but it is very beneficial both for the society and for the business.

what actions qualify as CSR?

welfare-promoting actions performed over and above the economical and legal requirements of the business in a country

does a business have to be a certain size, maturity, or social status to engage in CSR?

no- businesses of all sizes can choose to introduce CSR.

it is typically used in large corporations, because the more visible a business is, the more responsibility it has to set standards of ethical behavior for its peers, competition, and industry

small-mid sized corporations also create CSR programs, but their initiatives are not as well-publicized

what business ethics can we include in a CSR program?

human rights

community

governance

environment

accountability

business conduct

what are ethics?

what is ethical behavior?

ethics: belief about what is right or wrong

ethical behavior: behavior conforming to individual beliefs and social norms about what is right and good

what are the 4 basic pillars of the types of CSR?

1. ethical (human rights)

2. financial

3. environmental

4. philanthropic

what is the ethical type of CSR?

the pillar of CSR rooted in acting in a fair and ethical manner.

companies often set their own standards, though external forces or demands by clients may shape ethical goals.

examples:

-fair treatment of all types of customers

-positive treatment of all employees, including favorable pay and benefits above the minimum

-using different suppliers of different races, genders, veteran status, economic status

-honest disclosure of operation concerns to investors in a timely and respectful manner

using different suppliers of different races, genders, veteran status, economic status is part of what type of CSR program/pillar?

ethical

Starbucks wanted to diversify its workforce and has pledged to hire 25,000 US military veterans and spouses by 2025, reaching this milestone six years early.

what type of CSR program does this belong to?

ethical

Moving to tackle racial and social equity, Starbucks announced a mentorship program to connect black, indigneous, and people of colour (BIPOC) to senior leaders and invest in partnerships.

what type of CSR program does this belong to?

ethical

what is financial CSR?

the link of CSR that ties together the other 3 areas. A company make plans to be more environmentally, ethically, and philanthropically focused; however, the company must back these plans through financial investments of programs, donations, or product research

this includes spending on:

-research and development for new products that encourage sustainability

-recruiting different types of talent to ensure a diverse workplace

-initiatives that train employees on DEI, social awareness, or environmental concerns

-transparent and timely financial reporting

Coca-Cola has the aim of collecting and recycling every bottle, making their packaging 100% recyclable and replacing all water used in creating their drinks back to the environment to ensure water security.

what type of CSR program does this belong to?

financial

what is environmental CSR?

the CSR that focuses in preserving mother nature. through optimal operations and support of related causes, a company can ensure that it leaves natural resources better than before its operations

examples:

-reducing pollution, waste, natural resource consumption, and emission

-supporting causes that can help neutralize the company's impact

-choosing distributing methods with less impact on emissions and pollution

MOWILEX is the 1st paint manufacturing company in Indonesia that is Carbon Neutral certified. It replaced freon in air conditioners and office and factory lights with LED technology. It stopped producing certain colors of lead-containing wood and metal paint two years before the deadline recommended by the UN.

And, it collaborates to plant 50,000 new trees that protect coastlines and capture carbon in Bali.

what type of CSI program does this company adopt?

environmental

what is philanthropic CSR?

a type of CSR that challenges how a company acts and how it contributes to society.

it refers to how a company spends its resources to make the world a better place.

examples:

-profit donations to charities/causes

-entering into transactions with suppliers/vendors that align with the company philanthropically

-supporting employee philanthropic endeavors through time off or matching contributions

- sponsoring fundraising evens or having a presence in the community for related events

Walmart provides access to its large fleet of refrigerated food trucks nationwide, so Feeding America can distribute fresh food to people in need. Walmart donates the use of their trucks and logistics expertise helping to coordinate the charity's needs.

what type of CSR is this?

philanthropic

why does CSR increase brand recognition, customer loyalty, and sales?

Consumers act more favorably towards a company that has acted to benefit its customers as opposed to those that have demonstrated an ability to delivery quality products

how does CSR improve the company's relationship with investors?

In a study by Boston Consulting Group, companies that are considered leaders in environmental, social, or governance matters had an 11% valuation premium over their competitors.

CSR has a positive impact in how investors feel about an organization and how they view the worth of the company

how does CSR impact the company's employee engagement?

A study by professionals from Texas A&M, Temple, and the University of Minnesota, found that companies that align CSR-related values strengthen employee retention.

this reduces employee turnover, unhappy workers, and the cost of new employees

how can implementing a CSR program help a company with risk mitigation?

Discrimination against employee groups, disregard for natural resources, or unethical use of company funds is more likely to lead to lawsuits, litigation or legal proceeds where the company may be negatively impacted financially and be captured in headline news.

why does CSR give companies an easier access to funding?

because investors are more willing to support a business that practices CSR

what is ISO 26000?

- a set of voluntary standards mean to help companies implement CSR

- provides guidance rather than requirements

-clarifies what social responsibility is and helps organizations translate CSR principles into practical actions

ISO 26000 clarifies what ______ is and helps organizations to ________

social responsibility; translate CSR principles into practical actions

what should we avoid as a company when creating a CSR model?

1. don't choose unrelated initiatives- avoid participating in charitable efforts that are not related to your business focus or that violate your company's ethical standards. do not blindly send money to a completely unrelated organization.

2. don't use CSR as a marketing scheme- it can backfire if your business doesn't follow through. instead of trying a one-time stunt, adopt CSR practices over time.

3. don't wait for the industry to catch up- set the bar for your industry if you adopt CSR early on

CSR strategy must be....

-voluntary

-enhance society and environment

-behave ethically

-be over and above legal requirements

-be profitable