1. What is Corporate Social Responsibility?
Corporate Social Responsibility (CSR) is essentially a corporate conscience adopted by enterprises, which mandates its own code of practice, which may not necessarily be mandated by law. It is an enterprises’ sense of responsibility towards the community and environment in which it operates. There are usually three elements, respect of the environment, contribute to the community and respect for employees. It differs from business ethics, which usually refers to practices within a business whereas CSR concern primarily external parties, such as citizens and society at large, referred to as stakeholders. CSR is often linked with the term triple bottom line (TBL) and the three Ps, profit, people and planet. Each one of these three stakeholders must profit from an enterprises existence and activities.
Restraint and Fairness
CSR is as much about the exercise of restraint, as it is about adherence to the laws of fair practice such as equal opportunity and gender equality. It is one thing for large corporations to profess concern for their far reaching effects on the societies in which they reside however it is another for them to actually practice such things as the precautionary principle with regard to a potential environmental harm which may be caused to an eco-system. To paraphrase a legal aphorism, CSR not only must be done it must also be seen to be done. It is not unknown for corporations to be professing to be good corporate citizens whilst at the same time buying from overseas enterprises employing workers in third world countries with “slave like” labour laws. Whilst not to spread anything of a negative nature a small number of very well known brands have certainly been caught out in this regard.
CSR is similar to business ethics applied to large enterprises and their effects on the societies within which they exist. Sustainable growth, for instance, often puts limits on growth, which may easily translate into reduced revenue. While shareholders may comply with the limits imposed by impact studies or philanthropic investments for the greater good, CSR is a continual balancing act to appease both the shareholders and stakeholders. While for-profit corporations have a responsibility to the shareholders to produce profits and promote growth, CSR asks that these interests be measured against the wider concerns of society and individuals, balancing the needs for profitability with standards that ensure fair business practice, environmental concerns and Fair Trade practices.