THE INSTITUTE'S DOSSIER
Redrawing
Corporate Social
Responsibility
May 2014
The Dossiers de l’Institut are a collaborative
result of the work of BPI group consultants.
Publication director:
Philippe...
Institute for Leadership - BPI group - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - 3
When the wind blows,
there are those ...
4 - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - Institute for Leadership - BPI group
Table of contents
1I	 A Historical & ...
Institute for Leadership - BPI group - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - 5
Editorial
Globalization, the universa...
6 - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - Institute for Leadership - BPI group
However, at present, CSR initiatives ...
Institute for Leadership - BPI group - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - 7
A Historical & Philosophical
Overview...
8 - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - Institute for Leadership - BPI group
According to Milton Friedman, the pri...
Institute for Leadership - BPI group - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - 9
Continuing forward, Count Albert de M...
10 - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - Institute for Leadership - BPI group
Stakeholder theory systematically an...
Institute for Leadership - BPI group - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - 11
These two key points inform us that ...
12 - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - Institute for Leadership - BPI group
business practices based on ethical ...
Institute for Leadership - BPI group - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - 13
tegic management of human resources ...
14 - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - Institute for Leadership - BPI group
Global CSR – The Brundtland Commissi...
Institute for Leadership - BPI group - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - 15
In 2010, the International Standardi...
16 - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - Institute for Leadership - BPI group
An organization first needs to answe...
Institute for Leadership - BPI group - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - 17
ƒƒ Assess the current performance of...
18 - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - Institute for Leadership - BPI group
5 Great Socially Responsible Funds
1...
Institute for Leadership - BPI group - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - 19
CSR Rating Agencies: What is Their G...
20 - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - Institute for Leadership - BPI group
Morningstar Socially Responsible Inv...
Institute for Leadership - BPI group - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - 21
International Lens – A National
& Gl...
22 - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - Institute for Leadership - BPI group
The four pillars of the Strategy are...
Institute for Leadership - BPI group - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - 23
CSR in the U.S.
CSR is recognized as...
24 - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - Institute for Leadership - BPI group
principles and standards to the full...
Institute for Leadership - BPI group - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - 25
France’s CSR Engagement
Recent legal...
26 - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - Institute for Leadership - BPI group
ƒƒ CSR, competitiveness and sustaina...
Institute for Leadership - BPI group - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - 27
Key Drivers of CSR
The key CSR drive...
28 - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - Institute for Leadership - BPI group
Supply Chain
There are no national p...
Institute for Leadership - BPI group - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - 29
CSR in Spain
CSR Policies and Legisl...
30 - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - Institute for Leadership - BPI group
Media Coverage
CSR specialist media ...
Institute for Leadership - BPI group - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - 31
Club de Excelencia en Sostenibilidad...
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The Role of CSR in China
Corporate s...
Institute for Leadership - BPI group - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - 33
CSR’s Influence on Human
Resource Ma...
Corporate Social Responsability (english version)
Corporate Social Responsability (english version)
Corporate Social Responsability (english version)
Corporate Social Responsability (english version)
Corporate Social Responsability (english version)
Corporate Social Responsability (english version)
Corporate Social Responsability (english version)
Corporate Social Responsability (english version)
Corporate Social Responsability (english version)
Corporate Social Responsability (english version)
Corporate Social Responsability (english version)
Corporate Social Responsability (english version)
Corporate Social Responsability (english version)
Corporate Social Responsability (english version)
Corporate Social Responsability (english version)
Corporate Social Responsability (english version)
Corporate Social Responsability (english version)
Corporate Social Responsability (english version)
Corporate Social Responsability (english version)
Corporate Social Responsability (english version)
Corporate Social Responsability (english version)
Corporate Social Responsability (english version)
Corporate Social Responsability (english version)
Corporate Social Responsability (english version)
Corporate Social Responsability (english version)
Corporate Social Responsability (english version)
Corporate Social Responsability (english version)
Corporate Social Responsability (english version)
Corporate Social Responsability (english version)
Corporate Social Responsability (english version)
Corporate Social Responsability (english version)
Corporate Social Responsability (english version)
Corporate Social Responsability (english version)
Corporate Social Responsability (english version)
Corporate Social Responsability (english version)
Corporate Social Responsability (english version)
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Currently, there is an abundance of information about CSR and its importance along the corporate landscape. Although it definitely is a critical matter for organizations today, we have entirely lost its true meaning in translation. Considering that corporate social responsibility is largely perceived to be a linear, big-picture business practice, our dossier has attempted to ground the topic by renewing the lens through which we understand what it truly means to be a socially and ethically responsible company today and tomorrow. This dossier on CSR provides different perspectives about the mutli-faceted expectations of the modern day enterprise. We encourage you to share your feedback and play a part in initiating an active dialogue about innovation, leadership and social advancement.

Les informations concernant la RSE et son importance dans les entreprises sont aujourd’hui abondantes. Malgré le fait qu’il s'agisse d’une démarche cruciale pour les organisations, cet afflux d’information nous en a fait perdre le sens.
Considérant que la RSE est largement aujourd’hui perçue comme un dispositif global, éloigné du quotidien des entreprises, notre dossier tente de revenir à ses fondements et de renouveler la lunette à travers laquelle nous envisageons ce qu’est et sera une entreprise socialement et éthiquement responsable.
Ce dossier sur la RSE offre des points de vue et visions divers de ce que doit être l’entreprise d’aujourd’hui dans une telle perspective, et des attentes qui reposent sur elle.
N’hésitez pas à partager ici vos réactions, points de vue critiques ou complémentaires, pour faire vivre et progresser le débat au service de l’innovation et du progrès social !

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Corporate Social Responsability (english version)

  1. 1. THE INSTITUTE'S DOSSIER Redrawing Corporate Social Responsibility May 2014
  2. 2. The Dossiers de l’Institut are a collaborative result of the work of BPI group consultants. Publication director: Philippe BIGARD Coordination and editing: Shwetha CHANDRASHEKHAR Expert contributors: Audrey BARBE Pawel SABAL Shwetha CHANDRASHEKHAR Anne LEMAITRE Jean-Marie THUILLIER Philippe BIGARD Sabine LOCHMANN Illustrations: Jean-Michel MILON All illustrations are from the blog of J.M. Milon (lamineducoach.fr) and were chosen and used with permission of the author. Reproduction is prohibited. Other external sources and images used in support of this document are referenced and explicitly mentioned in the bibliography. Anything that is not referenced refers to the ideas developed by BPI group consultants and has been produced in-house. Therefore, use and citation of this file without permission of the authors is prohibited.
  3. 3. Institute for Leadership - BPI group - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - 3 When the wind blows, there are those that build walls and then there are those that build windmills. Clare Woodcraft, CEO of the Emirates Foundation
  4. 4. 4 - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - Institute for Leadership - BPI group Table of contents 1I A Historical & Philosophical Overview of CSR 7 Milton Friedman – The Agency Argument Against CSR 7 The Argument for CSR 8 2I International Lens – A National & Global Look into CSR 21 CSR in Canada 21 CSR in the U.S. 23 France’s CSR Engagement 25 CSR in Italy 26 CSR in Spain 29 3I CSR’s Influence on Human Resource Management 33 The Future of Business - Redrawing CSR 38 Maturity matrix - HR & Social Best Practices 41 4I Real-World Application – CSR Business Cases 43 5I BPI group – An Internal View of Corporate Social Responsibility 53 6I Closing Notes – Redrawing Corporate Social Responsibility 63 7I Sources 65 Literature 65 Web sites 66 8I Appendix 67 Videos 67 Books 67 Articles 68
  5. 5. Institute for Leadership - BPI group - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - 5 Editorial Globalization, the universal financial crisis, the incessant exploitation of natural resources and the relentless quest to strategically position the external organizational image are all collectively contributing to the increasing number of executives who want to align their organization with social responsibility and sustainable growth strategy. Implementation of CSR (corporate social responsibility) has become not only the guideline of how a company can develop its business while making a better contribution to society and the sustainability of the planet, but also a way of doing business which is designed to deliver long-term profits. In doing so, it is becoming apparent that Human Resources managers play a pivotal role in helping their organizations to achieve their goals of becoming socially and environmentally responsible firms while also aligning these objectives with financial performance metrics. This is as the Human Resources function today influences many key business processes which enable and foster the implementation of CSR practices and the development of a high performance CSR culture. Reflecting this, a survey conducted by The Society for Human Resources Management indi- cates that in companies with strong CSR policies, employee morale was 55% higher, while business processes were 43% more efficient than in companies with weak or non-existent CSR policies. Notably, despite sharing a mutual goal, CSR values adopt different forms not only due to the area in which they are applied, but also due to the specificity of the respective industry, culture, legal requirements, and organizational size. Taking these aspects into account, it is a key responsibility of the HR function to provide the organization with tools that enable the creation of a workforce which encompasses the values, skills, trust and motivation in achieving CSR strategy goals. By doing so, the HR function encourages and nurtures the concept of the "triple bottom line," which is also referred to as the 3P model: Profit, Planet and People. The TBL suggests that companies should be formulating three different bottom lines: one being the traditional measure of corporate profit, the second being the bottom line of a company's social involvement and the third being the bottom line of the company's environmental practices. Generally, the role of HR has primarily related to aspects of employment and workforce planning, compensation and benefits, well-being, safety at work and human development. Although, increasingly, we are witnessing a trend in which HR is beginning to embrace its role as the organizational advocate and manager of CSR. This is as talent today is progressively seek- ing to affiliate itself with companies which are invested in their sustainable development and social responsibility strategy. Hence it is crucial for the HR function and the entire organization as a whole to prioritize compliance with CSR values and policy. Audrey Barbe International Sales Development Manager BPI group
  6. 6. 6 - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - Institute for Leadership - BPI group However, at present, CSR initiatives are not being effectively executed and handled by organizations worldwide. On one extreme, an emerging trend CSR is beginning to influence is the birth of "greenwashing." Greenwashing refers to companies who deceptively promote their organization’s products, aims and/or policies as environmentally friendly and socially responsible. Furthermore, adding to the ineptitude of CSR today on the other end, there are several compa- nies and HR professionals who are executing innovative and socially responsible initiatives, yet not promoting their actions to the general public- consequently detracting its value to organizational stakeholders and the general public. This is only a minute fraction of the problem the application of CSR faces today. As we head into the business world tomorrow, we must learn to effectually integrate corporate social responsibility based practices into the foundation of the way business is conducted. In spirit, the following report examines and analyzes CSR trends today and tomorrow, and offers a lens into redrawing the conventional business approach to corporate social respon- sibility.
  7. 7. Institute for Leadership - BPI group - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - 7 A Historical & Philosophical Overview of CSR chapter 1Corporate social responsibility has long been strategically edged as fitting to good business practices. Aggressively rousing two extremes, the topic of CSR poses two arguments: The first stub- bornly states that it is against common business sense to part with profit, while the second disproves this by suggesting that conducting sustainable business through the inte- gration of CSR values is the only key to acquiring healthy bottom lines. Historically, Corporate Social Responsibility has etched its place into discussion and practice since the inception of business. As echoed by Mark S. Schwartz in his 2011 book, Corporate Social Responsibility: An Ethical Approach, the widespread assumption that the concept of CSR is only a recent sensation is not entirely accurate. In fact, even the notion that CSR has developed only over the last century is a fallacy. Social responsibility in a business context has been discussed and debated since the very beginning of business activity. Tracing back to the Code of Hammurabi almost 4000 years ago, a Babylonian law code and one of the oldest deciphered writings of significant length in the world, builders, innkeepers, and farmers were required to avoid acting negligently by causing death to others, or were condemned to punishment. Furthermore, responsible busi- ness practices have been outlined in the doctrines of the world’s religions such as Judaism, Christianity and Islam, which have existed for thousands of years, as the early conceptu- alization of CSR was broadly based on religious virtues and values such as honesty, love, truthfulness and trust1 . Milton Friedman – The Agency Argument Against CSR Progressing forward, the infamous modern debate of CSR was conceived and given prom- inence in the 18th century when Milton Friedman, a disciple of The Wealth of Nations author and economist Adam Smith, suggested from a conservative point of view that there is only one social responsibility of business, which is to use its resources and engage in activities designed to increase its profits. "There is one and only one social responsibility of business -- to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud." Milton Friedman, New York Times Magazine, September 1970 Although Friedman does mention this corporate motive to be in alignment with ensuring that businesses must remain without fraud or deception, this loosely termed statement provides room for great misconception about what it truly means to be an organizational entity oper- ating amidst societies of people who are employees, consumers, stakeholders, voters and taxpayers alike. 1  Cheng et al.,2014
  8. 8. 8 - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - Institute for Leadership - BPI group According to Milton Friedman, the principle that a business as an enterprise has social responsibilities is an ignorant statement, as it implies that a business is then a person, not an artificial system, as only people can have responsibilities, and business as a whole cannot be said to have responsibilities. Hence, the individuals who hold “responsibility” within a corporation are rather individual corpo- rate executives - these are employees of the owners of the business and they have a direct responsibility to their employers. This responsibility is to conduct the business in accordance with their desires, and generally, in respect particularly to corporations, this desire is to make as much money as possible while conforming only to basic rules of the society - including law and ethical custom. Thereby, if a corporation is seeking to increase overall profits by opting for a decision which may prove to be inconvenient to its community, it is entirely ethical, as it is complying with its business’ or rather employers’ desires of cutting expenses and maximizing profits, as a corporation generally seeks to do, and duly fulfilling its primary responsibility to its owners. Secondly, Freidman’s agency argument elaborates that the corporate executive is an agent of the stockholders of a company and would be exercising a distinct “social responsibility” of his own, if he were to spend the organization’s ‘money’ in a different way which does not complement the stockholders’ desires, or as how they would have spent it. In this sense, corporations must comply with their role as an agent of its stockholders by only conducting actions they desire. This ultimately is to increase profits by minimizing costs, because when management is hired, they are selected by stockholders of the business to facilitate management in such a way that would directly benefit the stockholders. In addition, Friedman states that a corporate executive does not have the social authority to make policy choices, and possibly lacks moral and social expertise, and should therefore avoid moral distractions by focusing on their specialized role of turning a profit. The Argument for CSR The Grassroots of CSR in Europe: Father Wilhelm Emmanuel von Ketteler, Count Albert De Mun & The Birth of Social Catholicism The grassroots of Corporate Social Responsibility were also prevalent in European history. In 1848, Father Wilhelm Emmanuel von Ketteler from Germany was initiating a new way of approaching the social and economic devastation caused by the Industrial Revolution2 . Through his ministry, he started a movement known as “Social Catholicism.” Identifying the early foundation of capitalism stained with ruthless competition and harsh individualism, he not only challenged the socialist and capitalist mindsets of his day, but also offered specific solutions which foreshadow current day management strategy. To note, at an assembly of German bishops on September 5, 1869, he listed the following, which, he maintained, “eliminate or at any rate diminish the evils of our present industrial system” – an early depiction of CSR values: 1 the prohibition of child labor in factories 2 the limitation of working hours for factory workers 3 the separation of the sexes in the workshops 4 the closing of unsanitary workshops 5 Sunday rest 6 the obligation to care for workers who are temporarily or permanently disabled 7 the appointment by the state of factory inspectors 2  Sister, 1953
  9. 9. Institute for Leadership - BPI group - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - 9 Continuing forward, Count Albert de Mun (1841-1914) a French pioneer in the Catholic Social Movement amidst the horrors of the Civil War, resolved to devote his life to serving workers. Among De Mun's most notable contributions to social reform in France was his decisive support for labor legislation. Through his speeches, articles, and organizations, he wielded a powerful influence in creating a public opinion favorable to state intervention to improve working conditions. As spokesman in the Chamber of Deputies for the conservatives who favored social reform, De Mun introduced many bills and amendments on labor questions, served on legislative commissions, and played a leading role in the debates on social laws. The program of laws which De Mun proposed may seem moderate enough today, but three decades passed before many of his recommendations were adopted3 . The reforms he advocated included the regulation of hours of work and the prohibition of night work for women and children, a fifty-eight hour week with a Sunday holiday, four weeks of rest for women after childbirth, compulsory accident and sickness insurance, old age pensions for farmers and for industrial workers, joint arbitration councils, minimum wages for sweatshop industries, encouragement of profit-sharing plans and cooperatives, the abolition of child labor, the protection of small rural holdings, and international cooperation on labor legislation. The Modern Day CSR Advocates The 20th and 21st century has begun to encompass transformations in perspective as opposed to those of Smith and Friedman, with opinions such as those of Joseph Stiglitz, former Chief Economist at World Bank and a Nobel Prize winner, who suggests that- “Whenever there are externalities–where the actions of an individual have impacts on others for which they do not pay, or for which they are not compensated–markets will not work well.” "I think it would probably be preferable to create clear standards of expectations, because "corporate social responsibility" are words that mean very different things for different people. Joseph E. Stiglitz, a 2001 Nobel Prize winning Economist Edward Freeman’s Stakeholder Approach In fact, dating back historically, there have been loyal and staunch advocates of the social responsibility of business much before it became engrained into mainstream business culture. As a world leader in business ethics and strategic management, R. Edward Freeman's foun- dational work in his book, Strategic Management: A Stakeholder Approach, published first in 1984, argues that management must balance its relationship amongst all stakeholders, or else, risks the sustainability of the firm. He reflects that corporations must not give prevalence to their shareholders over local community members, despite the inevitable truth that there will be occurrences when one group will benefit at the expense of others. Fundamentally, Stakeholder Theory is a theoretical explanation of how business actually oper- ates. The approach suggests that for any organization to be successful and sustainable, it has to create value for all its shareholders. This includes consumers, clients, suppliers, employees, local communities and shareholders. A key point it validates is that placing primacy to any one of these stakeholders in isolation translates to negligence. This is because the interests of all stakeholders must marry in alignment, and it is the respective job of management to examine and critically analyze how exactly these various interests will travel in harmony along the same direction. 3  Sister, 1953
  10. 10. 10 - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - Institute for Leadership - BPI group Stakeholder theory systematically analyzes the impact that organizations have on those who "affect them or are affected by them"4 . The company’s managers "should on the one hand manage the corporation for the benefit of its stakeholders in order to ensure their rights and participation in decision making and on the other hand management must act as the stockholder’s agent to ensure the survival of the firm; to safeguard the long term stakes of each group". Stakeholder theory is rising in application within multinational companies, who in many cases are more powerful than nations. These multinational corporations (MNCs) are able to recog- nize the distinct link between shareholders and long-term wealth. Moreover, companies and local authorities are realizing how important responsible management is, and thereby the significance of sustainable development. Considering how important all stakes are for a company to steadily survive in the marketplace, it is clear that sustainability is no easy feat for any organization today. Hence, Stakeholder Theory wisely suggests that a community of groups can together create something that no one of them singularly can create alone. ISO 26000 According to the Commission Green Paper (2001), CSR is a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis. Amongst other things, this definition helps to emphasize that an important aspect of CSR is the interactions enterprises have with their internal and external stakeholders- namely, employees, customers, neighbors, non-governmental organizations, public authorities, etc., as emphasized above. Notably, stakeholder theory is an important part of ISO 26000, which is the only international standard designed to provide organizations with guidelines for social responsibility. According to ISO 26000 an organization should: ƒƒ identify its stakeholders; ƒƒ be conscious of and respect the interests of its stakeholders and respond to their expressed concerns; ƒƒ recognize the interests and legal rights of stakeholders; ƒƒ recognize that some stakeholders can significantly affect the activities of the organization ƒƒ assess and take into account the relative ability of stakeholders to contact, engage with and influence the organization; ƒƒ take into account the relation of stakeholders' interests to the broader expectations of society and to sustainable development, as well as the nature of stakeholders' relation- ships with the organization; ƒƒ consider the views of stakeholders that may be affected by a decision even if they have no formal role in the governance of the organization or are unaware of their interest in the decisions or activities of the organization. Business’ Relationship with Society Posing a considerable argument for CSR, Mark Sagoff, one of America’s foremost environ- mental philosophers emphasizes that we must question whether what we want for ourselves individually as business entities is consistent with the goals we would set for ourselves collectively as citizens. Adding in to this perspective, Peter Singer, Australian ethical and political philosopher best known for his work in bioethics and his role as one of the intellectual founders of the modern animal rights movement, points out that when we humans change the natural environment in which we live, that we often harm ourselves. 4  Freeman, 1984
  11. 11. Institute for Leadership - BPI group - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - 11 These two key points inform us that the business as an entity does not operate in isolation- it in fact is fueled day in and day out solely on its interdependency with its community and all respective stakeholders. Thereby, it is evident that organizations have a special responsibility to protect the communities within which they operate - especially in preserving their very own self-interest. As evident, the role of business in society has borne a profound transformation in the last few decades. While companies have been given increasingly greater freedom, they have also been held responsible for a range of issues that were previously considered the sole responsibility of the state. At present, whether we accept it or not, business is expected to voluntarily promote efforts to mitigate climate change, protect human rights and safeguard the environment. Operating within a multi-tier economic, social and environmental playing field, the organization of today can no longer afford to conduct business in a solely linear fashion, as it has been accustomed to for so long. The Meaning of Corporate Social Responsibility Today Today, simply put, CSR refers to an institution which insists that companies as well as local authorities and offices voluntarily take into account the interests of social and environmental concerns in their business operations, and additionally also consider relationships with groups operating in their environment – namely, stakeholders. This model enables profit generating organizations to take into account social interests such as: environmental issues, honest relationships with customers and employees, owners and investors, suppliers, competitors and the local community. The modern concept of CSR was proposed in 1953 by Howard R. Bowen - who is considered as the "father" of CSR. In his book "Social Responsibility of Businessmen", he introduced for the first time the term "corporate social responsibility" and developed the first of its definition. His thesis was a basis for discussion on the phenomenon of social responsibility for a long time. According to Bowen’s definition, corporate social responsibility is a "duty of managers to implement policies and make decisions regarding business in a manner which is consistent with the goals and values of our society." Interestingly, during Bowen’s time, and even long after, it was assumed that corporate social responsibility was only an attribute entitled to entrepreneurs, as opposed to how it is embraced today – as an organizational duty. The first doctrine of corporate social responsibility was contrived by an American industrialist and philanthropist, one of the richest men of his time: Andrew Carnegie. Carnegie wrote that "wealth should be regarded as a sacred trust, managed by the possessor, into whose hands it flows, for the greatest good of the people". According to Carnegie, the concept of CSR is primarily based on the principle of beneficence, according to which the wealthy members of society should help those who are less privileged, such as the unemployed and the disabled, the sick and elderly. The idea of CSR expectedly also has its fair share of opposition. This includes, amongst others, Milton Friedman, who had a negative preconception about the interdependent relationship between the actions of society and the environment. His opinions were largely based on the belief that the ultimate goal of the enterprise should be to multiply its profits, with a key focus on shareholder expectations and realities of the free market - which are both based on consumer interest rather than public interest. Outlined in more detail, the debate against CSR suggests that a company’s activities should be focused solely on the implementation of economic assumptions, and not on moral actions. It further elaborates that CSR based decisions are often imposing, which can lead to unnecessary animosity among management. Despite the opposition which CSR faces today, it is becoming a practice which is emerging as crucial to long-term sustainability. Although there is no universal definition of a socially responsible company, usually it refers to an organization which operates with transparent
  12. 12. 12 - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - Institute for Leadership - BPI group business practices based on ethical values, compliance with legal requirements and respect for the community and the environment. Essentially, CSR propels that in complement to the prioritization of profit, the company is responsible for its whole impact on its surrounding communities and moreover, the planet. Specifically, the "people" it refers to are the company’s stakeholders who include: employees, customers, business partners, investors, suppliers, retailers, and both governmental and civil society. Conversely, stakeholders are increasingly expecting companies to adopt business conduct which is more environmentally and socially responsible. Today, more and more companies realize that in order to maintain efficiency and compet- itiveness in a rapidly changing business world, they need to become socially responsible. In the last decade itself, globalization has blurred boundaries in the marketplace, while the emergence of post-modern technology has accelerated time into an easily quantifiable commodity. Contemplating these changes in the corporate environment, there is an increasing need for companies to develop their risk management ability and to effectually protect the reputation of their brands, and due to the advent of globalization, embracing CSR practices positions organizations at a fiercely competitive level in attracting skilled workers, investors and consumer loyalty. A common misconception about CSR is that it merely subsists of community based philan- thropic and charitable services, which is entirely not the case. Although engaging in these types of initiatives is not irrelevant, as it allows companies to create a good equation with members of its local commu- nity, limiting CSR only to philanthropy can have a negative impact on organizational climate. Notably, an organization must be comprehensive in its CSR approach to include the governance of working conditions of employees and its external suppliers in addition to considering accountability for the environment it operates in. Distinctly, Archie Carroll was one of the first scientists to have made a distinction between the different types of organizational responsibility. He termed it as the “Pyramid of Corporate Social Responsibility” for corporations. Fundamentally, Carroll defined the primary duty of the enterprise to be its economic responsibility, which involves ensuring profitability. The second responsibility outlined in the model is an organization’s legal responsibility; its duty to act in accordance with the framework drawn up by the government and the judiciary. Following, the company’s third responsibility is an ethical obligation which comprises of remaining rightful to stakeholders and its own operating environment. Finally, the company’s fourth commission is its discretionary responsibility, which refers to proactive and strategic behavior that may help the company and the society, or both, such as contribution of resources to educational, cultural or social purposes. Why is CSR a Necessity Today? The conclusions of research on CSR progressively point to the evident fact that incorporating corporate social responsibility practices in business is crucial for the long-term stability of a company. Companies, who blindly and narrowly are enticed by the profit motive alone, without concern for a wide range of stakeholders, will face external discrepancies in the long term. Thus, companies must be able to understand the needs of their stakeholders in a broader sense and duly recognize them as interdependent factors to their success. For example, the stra- Discretionary Responsibilities Ethical Responsibilities Legal Responsabilities Economic Responsibilities Archie Carroll Model of Corporate Social Responsibility
  13. 13. Institute for Leadership - BPI group - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - 13 tegic management of human resources is interconnected to customer satisfaction, and it is essential for companies seeking to understand customer needs to align themselves with the fluctuating market by effective self-management. This is as success in the corporate world is not linear; there are several implicit factors which must be taken into consideration to arrive at a holistic perspective of what contributes to the sustainability of the enterprise. Duly, Corporate Social Responsibility is gradually gaining deserved importance in discussion of its broader role in society. Its emergent number of supporters rightfully draws attention to the clear impact of business on the world around us, and moreover to the fact that social and environmental concern is crucial for sustainable development and survival. In effect, the implementation of CSR practices within all facets of the organization is a key element to build lasting value and a competitive advantage in the marketplace. This is primarily due to growing expectations from society at large with respect to how business should be conducted in the 21st century. The Triple Bottom Line – Why CSR Cares about the Planet & People alongside Profits Fittingly so, the topic of CSR draws light to the triple bottom line. Contrived in 1994 by John Elkington, a world authority on corporate responsibility and sustainable development, the triple bottom line refers to the allocation of three distinct bottom lines which place emphasis on profit, people and the planet. The first one outlines the conventional summation of corporate profit, fundamentally, the bottom line of the enterprise’s financial profit and loss. The second refers to the organization’s account of ‘people’ which measures how socially responsible an organization has been throughout its operations in respect to its human capital. The third bottom line of the company aims to assess its impact on the ‘planet,’ configuring how environmentally responsible it has been. Parting ways with a one metric measurement of success, the TBL suggests that success can be defined otherwise. It offers a non-linear approach to organizational sustainability. Aiming to quantify and examine the financial, social and environmental performance of the enterprise, the TBL is a holistic approach to conducting business which is morally conscious and strategically profitable. Overall, the long-term benefits of corporate social responsibility should be examined when considering embracing a CSR based company culture. The following outlines how CSR impacts the 3Ps – Profits, People and the Planet: PROFITS • Maximizes profit due to sustainable business practices • Company growth and development • Increased competitive advantage in marketplace • Strong incentive for innovation & product development • Positive external and internal organizational reputation • Increased customer and investor interest • Increased customer and stakeholder loyalty • Increased reduction in costs due to operational efficiencies PEOPLE • Increased employee satisfaction and motivation • Increased interest of applicants • Greater talent attraction and retention • Positive organizational image among employees • Improvement of organizational culture • Improved public relations with community and local authorities • Increased employee engagement and consequent performance PLANET • Environmental risk reduction • Environmentally friendly products • Reduction of raw materials wastage • Reduction of pollution and greenhouse gas emissions
  14. 14. 14 - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - Institute for Leadership - BPI group Global CSR – The Brundtland Commission Due to the emerging recognition and interest in CSR amongst organizations and their stake- holders, the United Nations established The Brundtland Commission in 1983, aiming to unite countries to pursue sustainable development together. The result of the committee’s unison was a report published in 1987 that among others defined sustainable development as "development that meets the needs of the present without compromising the ability of future generations to meet their own needs". Moreover, the report clearly indicated the strong correlation between social, economic and environmental factors in respect to sustainable development as illustrated below. Social Environmental Economic EquitableBearable Viable Sustainable The Brundtland Commission also played a key role in incentivizing the formation many other organizations, initiatives and institutions designed to promote sustainable growth and social responsibility among societies and business. Economic dimension Social dimension 20101987 Social Responsible Investinf
  15. 15. Institute for Leadership - BPI group - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - 15 In 2010, the International Standardization Organization (ISO) launched a standard in address- ing sustainable development and social responsibility: ISO 26000, which is the only interna- tional standard designed to provide organizations with guidelines for social responsibility, as mentioned previously. This standard helps to clarify what social responsibility is, by helping businesses and organizations to translate principles into effective actions and shares best practices relating to social responsibility on a global scale. Its universal application allows for use of ISO 26000 in all types of organizations (small to large businesses, communities, NGOs, trade unions, etc.) regardless of their size, field of activity and location. Furthermore, ISO 26000 complies with several major international founding documents such as the Universal Declaration of Human Rights, the conventions of the International Labour Organization, which reflects its international accord. Social Responsibility: 7 Core Subjects More than 90 countries participated in the development of the ISO26000 standard, with more than 100 organizations actively taking part in the process in France alone. As an internationally communal tool available for all organizations, ISO26000 propels business practices which positively contribute to society at large. Additionally, it is important to note that many of the rules and best practices described in ISO 26000 may already be imposed by the current legis- lation system. In accordance, BPI group as a leading HR consulting firm, wholly acknowledges the necessity for CSR and hence took part in the standard development process and today continues to embrace CSR practices in its daily activities. Extensively, there are several potential areas of action for the inclusion of Corporate Social Responsibility in daily business practices. For example, each country can deem which activ- ities can be considered as a social responsibility, such as the degree of energy efficiency, establishing a code of ethics, the programs implemented for the local community, reliable information on labels, etc. Then, the consequent development of standards and appropriate regulations can encourage the implementation of CSR principles. Corporate Social Responsibility Methodology As mentioned, CSR activities are not limited to conventional volunteering and charity based work, which are relatively easy to implement and assess. CSR practices extend beyond the vicinity of frontline activities, as they include all exchanges of the company- both internal and external. Hence, it is crucial to adopt a systematic approach and methodology that clearly defines how to implement CSR. Some companies, like Danone and others, develop their own tools which guarantee continuous improvement, as they identify and prioritize both stakeholders and required action. Due to the fact that CSR commands long-term commitment, businesses may not be able to apply policies within all facets of operations. For this reason, organizations should decide which areas it will take action in as its first step. Next, once the company decides to engage in CSR activities, it should duly take the right steps to identify and create an action plan. CSR involvement decision-making The decision to become socially responsible can often be seen as a small step which is merely consequent to legal requirements. However, CSR means much more than that. It means a new way of thinking about company protocol. It entails thinking about the organization as an interdependent entity, not one which is entirely autonomous. Moreover, the decision to become socially responsible is a decision which requires company executives to have a great thorough understanding of the organization’s relationship with its direct stakeholders, and indirect stakeholders- the general public.
  16. 16. 16 - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - Institute for Leadership - BPI group An organization first needs to answer 3 key questions during the CSR involvement deci- sion-making process: 1) What is CSR? 2) Why do we want to do engage in CSR? and 3) What are the ultimate potential benefits and costs? Subsequently, only when executives are completely convinced of the necessity of CSR, will it become a part of the firm’s strategy. At this point, the right actions to be undertaken can be defined in order to achieve the company’s strategic goals. Definition and prioritization of stakeholders According to ISO 26000, when addressing its social responsibility strategy, an organization must understand three integral relationships: ƒƒ Between the organization and society An organization should understand how its decisions and activities impact society at large. An organization should also understand society’s expectations of responsible behaviour concerning these impacts. ƒƒ Between the organization and its stakeholders An organization should be aware of its various stakeholders. The decisions and activities of an organization may have poten- tial and actual impacts on these individuals and organizations. These potential or actual impacts are the basis of the "stake" or interest that causes the organizations or individuals to be considered stakeholders; and ƒƒ Between the stakeholders and society An organization should understand the rela- tionship between the stakeholders who are affected by the organization, on one hand, and the expectations of society on the other. Although stakeholders are part of society, they may have an interest which is not consistent with the expectations of society. Stakeholders have unique interests with respect to the organization which can be distinguished from societal expectations of socially responsible behaviour with respect to any issue. Once a company understands these three relationships, it is ready to define and recognize its stakeholders. A company should also take into account that the organization, stakeholders and society all have different perspectives. The primary step for organizations when prioritizing its stakeholders includes the assessment of the relationship between its stakeholders and itself, and moreover of the mutual impact they have on each other. Subsequently, the company can illustrate the result on a matrix, which helps to signify the dialogue from the two previous criteria. This includes: i. Engaging in dialogue with key stakeholders, little known or unknown; ii. Supporting information with important stakeholders, little known or unknown; iii. Continuing the dialogue with major stakeholders, and already well known. Definition and prioritization of actions and action plan In a similar manner to prioritizing stakeholders, a company should define and prioritize activities to undertake. The identification of relevant policy areas is a prerequisite for the determination of priorities of action. According to ISO 26000, an organization should "develop a set of criteria for deciding which core subjects and issues have the greatest relevance and are the most important." The policy should include the specifics of the organization, including an analysis of the current situation, in terms of risks, opportunities, strengths, and weaknesses. In order to design an apt plan of action to address priorities within the organization, a company should: ƒƒ Determine the importance of the issue - assess the risks and opportunities relating to action;
  17. 17. Institute for Leadership - BPI group - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - 17 ƒƒ Assess the current performance of the organization in this field (its strengths and weaknesses); Once a company defines and prioritizes its stakeholders and its consequent actions to execute, it is ready to define an action plan. This action plan should include all allocated resources to each respective action. At this point there are two challenges for HR, first, to define its own resources for implementation of action and second, to support others within the department during this process. Sustainable reporting & investment An important part of the decision making process when considering a long term investment is the comprehensive analysis of a company’s governance. Duly, many companies include their main assumption of management, long term strategy and CSR activities in their annual performance report along with additional financial information. The Global Reporting Initiative (GRI) founded in 1997 in Boston is a non-profit organization which was established to promote sustainable development and to provide Sustainable Reporting Framework for companies around the world. A sustainability report is an organi- zational report that gives information about economic, environmental, social and managerial performance. Internal benefits resulting from sustainable reporting include: ƒƒ Increased understanding of risks and opportunities ƒƒ Emphasized link between financial and non-financial performance ƒƒ Influencing long term management strategy and policy, and business plans ƒƒ Streamlining processes, reducing costs and improving efficiency ƒƒ Benchmarking and assessing sustainability performance with respect to laws, norms, codes, performance standards, and voluntary initiatives ƒƒ Sidestepping blame in publicized environmental, social and governance failures ƒƒ Comparison of internal performance, and between other organizations and sectors External benefits of sustainability reporting include: ƒƒ Mitigating - or reversing - negative environmental, social and managerial impact ƒƒ Improved organizational reputation and brand loyalty ƒƒ Enabling transparency to external stakeholders about company’s true value, tangible and intangible assets ƒƒ Demonstrating how the organization influences, and is influenced by expectations of sustainable development According to a survey conducted by GRI, Accounting for Sustainability and Redley Yeldar in 2011, over 80% of respondents share that additional financial information is very useful and relevant to their decision-making process when analyzing an investment. This reflects the need for comprehensive, transparent, and thorough information about company performance during the investment decision making process. In order to benchmark organizational sustainability performance, S&P Down Jones provides Sustainability Indices which assess how a company is performing – sustainability wise. The index is a response for increasing investor needs and an emergence of investor willingness to diversify their portfolios by investing in companies which embrace industry-wide best practices with regard to sustainability and social respon- sibility. In recent times, visible social and environmental changes and an incline in acknowl- edgement of all related issues played a strong incentive for investors to invest particularly in socially responsible companies and create a separate investment category known as Social Responsibility Investment (SRI). From 2007 to 2010 alone, SRI assets increased more than 13%, while professionally managed assets overall increased less than 1%.
  18. 18. 18 - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - Institute for Leadership - BPI group 5 Great Socially Responsible Funds 1. Parnassus Equity Income 2. Neuberger Berman Socially Responsible 3. Winslow Green Growth 4. Vanguard Intermediate-Term Tax Exempt 5. Domini International Social Equity Higher Education: Training for Top Management Another sign of societal evolution which depicts the growth of socially responsible thinking are schools and universities around the world which provide dedicated CSR and sustainable development courses. Specifically, the influence of corporate social responsibility on MBA programs is rapidly evolving as a result of the economic difficulties over the past five years. Following the 2008 financial crisis, and protests around the world against the perceived greed fostered in some industries, there has been an upsurge of blame placed at business schools for failing to ingrain the importance of CSR values on their students. According to the Association of MBAs, only 20% of UK MBA courses have a mandatory CSR module. Whereas, on the other hand, more business schools are beginning to provide CSR dedicated MSc and MBA courses. Global Ranking - Top 10 MBA Programs with Corporate Social Responsibility Curriculum 1. Harvard Business School, Harvard University 2. Stanford Graduate School of Business, Stanford University 3. INSEAD 4. The Wharton School, University of Pennsylvania 5. IE Business School, IE University 6. Columbia Business School, Columbia University 7. Tuck School of Business, Dartmouth College 8. London Business School 9. The Kellogg School of Management 10. Ross School of Business, University of Michigan
  19. 19. Institute for Leadership - BPI group - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - 19 CSR Rating Agencies: What is Their Global Impact? A 2010 Journal of Business Ethics Study by Steven Scalet & Thomas F. Kelly - Summary of Findings In the last two decades, there has been a pronounced growth of CSR rating agencies that assess corporations based on their social and environmental performance. Steven Scalet & Thomas F. Kelly investigate the impact of CSR ratings on the behavior of individual corporations in their study. They examine in particular to what extent corporations adjust their behavior based on how they rank. Their primary finding is that being dropped from a CSR ranking appears to do little to encourage firms to acknowledge and address problems related to their social and environmental performance. Specific rankings appear not to have a widespread effect of influencing firms to acknowledge negative CSR events and publicly present plans and actions to address them. Whether firms are well or poorly ranked, they appear to focus on and publicly discuss their “positive” CSR activities. The study discusses the wider significance of these results as well as the overall significance of CSR rankings for a global economy. It suggests that to fully understand the significance of CSR rating agencies for a market society, it matters to know their actual impact on corporate decision making. Regardless of the reasons that motivate agents to seek information about social responsibility, CSR rating agencies are an industry that has emerged to provide non-financial assessments to guide decisions for investors, consumers and many other stakeholders. Whether rating agencies are assessed from a strategic or larger moral perspective, the relationship between rankings and firm behavior is a fundamental concern for anyone interested in the development of the CSR movement and the impact of rating agencies on the social performance of corporations. An exchange between John Mackey, the CEO of Whole Foods Market, and the late Nobel Laureate Milton Friedman offers a particularly illuminating contrast between these two competing points of view. Mackey writes, ‘‘It is the function of company leadership to develop solutions that continually work for the common good.’’ Friedman responds: The differences between John Mackey and me regarding the social responsibility of business are for the most part rhetorical. Strip off the camouflage, and it turns out we are in essential agreement. [Whole Foods Market] has done well in a highly competitive industry. Had it devoted any significant fraction of its resources to exercising a social responsibility unrelated to the bottom line, it would be out of business by now or would have been taken over. Source: Scalet & Kelly, 2010 A CSR Must Read - Sustainable Excellence: The Future of Business in a Fast-Changing World by Aron Cramer & Zachary Karabell (2010) From their work with these Global 1000 companies, authors Cramer and Karabell know firsthand how business can successfully grapple with big-picture issues like resource scarcity, supply chain complexities, and the diverse expectations of government and the public. In Sustainable Excellence, they tell the story of how Coca-Cola and Greenpeace collaborated on a refrigerator that fights climate change. They show how companies like Best Buy and Nike are transforming the very products they sell to deliver more value to consumers with less waste. They recount how GE and Google created an innovative partnership that is developing "smart grids" that radically reduce energy use. And they show how business leaders like Starbucks' founder and CEO Howard Schultz put sustainable excellence at the center of his company's business strategy. Through these and other fascinating stories, Sustainable Excellence makes the case for a different way of doing business--one that will define both business success and economic vitality in the 21st century. Source: The Corporate Social Responsibility Newswire
  20. 20. 20 - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - Institute for Leadership - BPI group Morningstar Socially Responsible Investment Index The Morningstar Socially Responsible Investment Index was created jointly by Morningstar Japan K.K. and the Center for Public Resources Development, a non-profit organization. Companies are reviewed based on a thorough analysis of their performance on governance/accountability, market (consumers/ customers, suppliers), employment, social contribution, and the environment. (January 2012) FTSE4Good Global Index The FTSE4Good Global Index has been designed by FTSE, which is an independent company jointly owned by The Financial Times and the London Stock Exchange. Companies on the FTSE4Good Global Index have met stringent social and environmental criteria, and are positioned to capitalize on the benefits of responsible business practices. (September 2011) Dow Jones Sustainability Index (DJSI) The Dow Jones Sustainability World Index was developed jointly by Dow Jones & Company and SAM Research to assess corporate sustainability. Companies are reviewed based on a thorough analysis of economic, environmental, and social performance. (September 2013) Vigeo Vigeo assesses both the performance of companies and organizations and their level of Corporate Social Responsibility (CSR) management. They assess the degree to which companies and public corporations take into account environmental, social, and corporate governance objectives, which constitute risk factors and business opportunities for them in the definition and implementation of their strategy and policies. Oddo & Cie Oddo Securities propose analyses that generally take into account ESG issues which have a financial impact on the companies in their business sector. They also provide services that monitor the day-by-day non-financial news at companies. Ethibel Pioneer & Excellence Forum Ethibel, which maintains Ethibel Investment Registers, is an independent consultancy agency for socially responsible investments that advises banks and brokers offering ethical savings accounts and investment funds. Ethibel Excellence Investment Registers is a universe for the investment composed by highly scored companies from a social responsibility perspective. This universe is continuously updated and monitored. (October 2013) Standard & Poor’s Standard & Poor's Ratings Services, the world's leading provider of credit ratings, provides transparency not only on a company's financial fitness but also its environmental, social and governance (ESG) performance. They specialize in exploring how ESG issues affect creditworthiness. They have also established an Environmental Finance Global Industry Focus Team (GIFT) to promote the global consistency and analytic rigor of their environmental finance sector analysis, including global carbon markets, climate change finance and clean energy.
  21. 21. Institute for Leadership - BPI group - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - 21 International Lens – A National & Global Look into CSR chapter 2CSR in Canada Canadian organizations recognize the value of incorporating CSR prac- tices into their organizational infrastructures. This form of operating responsibly and ethically is a direct reflection of Canadian values which thrive on promoting and contributing to the sustainable development of domestic and global communities. Canada as a nation is a strong advocate of CSR. The Government of Canada requires and urges all Canadian companies working both domestically and internationally to respect all applicable laws and standards, to operate transparently and in consultation with local and foreign government policy in order to ensure business activities are conducted in a socially and environmentally responsible manner. The Government of Canada works with organiza- tions in the country, civil society groups, foreign governments and communities, as well as other stakeholders to foster and promote CSR thoroughly (Government of Canada, 2014). Canada’s CSR Strategy In March 2009, building on its long-standing commitment to the Organisation for Economic Co-operation and Development (OECD) and its Guidelines for Multinational Enterprises, the Government of Canada released Building the Canadian Advantage: A Corporate Social Responsibility (CSR) Strategy for the Canadian International Extractive Sector. This is enforced by the government’s belief that Canadian companies are often instrumental in bettering the lives of people in the communities in which they operate, as these comple- mentary initiatives will provide the tools, guidance and advice they need to meet and exceed their obligations with respect to corporate social responsibility. The specific initiatives are: ƒƒ Creating a new Office of the Extractive Sector Corporate Social Responsibility Counsellor to assist in resolving social and environmental issues relating to Canadian companies operating abroad in this field. A competency-based selection process will be launched shortly to identify qualified candidates for this position. ƒƒ Supporting a new Centre of Excellence to be established outside government as a one-stop shop to provide information for companies, non-governmental organizations and others. ƒƒ Continuing Canadian International Development Agency assistance for foreign govern- ments to develop their capacity to manage natural resource development in a sustainable and responsible manner. ƒƒ Promoting internationally recognized, voluntary guidelines for corporate social responsi- bility performance and reporting.
  22. 22. 22 - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - Institute for Leadership - BPI group The four pillars of the Strategy are: 1. Support for host country capacity-building initiatives related to resource governance and for host countries to benefit from these resources to reduce poverty; 2. Promote the following widely-recognized voluntary international CSR performance guidelines: ƒƒ The OECD Guidelines for Multinational Enterprises (DFAIT chairs and provides the secretariat for Canada’s National Contact Point for the OECD Guidelines); ƒƒ The International Finance Corporation Performance Standards on Social and Environmental Sustainability; ƒƒ The Voluntary Principles on Security and Human Rights; and ƒƒ The Global Reporting Initiative 3. The Office of the Extractive Sector CSR Counsellor; 4. The development of the Centre for Excellence in CSR1 . The CSR Strategy was informed by consultations undertaken with a number of stakeholders, including the "National Roundtables on Corporate Social Responsibility and the Canadian Extractive Sector in Developing Countries," as well as recommendations made by the former Standing Committee on Foreign Affairs and International Trade (SCFAIT). In 2006, the Government of Canada organized the multi-stakeholder National Roundtables, which provided an opportunity to encourage a practical and solutions-oriented dialogue on ways to expand the knowledge and capacity of Canadian companies to conduct their operations in a socially and environmentally sustainable manner. Active Promotion of CSR Canada’s network of diplomatic missions abroad actively promotes CSR guidelines through seminars, conferences, workshops and other activities involving companies, representatives of host governments and civil society; and provides advice to companies and stakeholders related to CSR. Canada promotes CSR in a number of multilateral fora including the OECD, the Group of Eight, the Asia Pacific Economic Co-operation, the Organization of American States, la Francophonie, and the Commonwealth. Canada’s efforts are further advanced by including voluntary provisions for CSR in its most recent free trade agreements (FTAs) and foreign investment promotion and protection agree- ments (FIPAs). Canadian companies, civil society, and government have been at the forefront of efforts to create a global consensus on responsible mining and sourcing practices to address the phenomenon of “conflict minerals” in the gold, tin, and tantalum and tungsten sectors. Canada supports the OECD Due Diligence Initiative for responsible supply chains of conflict minerals. In addition, Canada has provided strategic funding of key projects towards peace and prosperity in the Great Lakes Region and provided funding in the 2009-2010 fiscal year to 50 corporate social responsibility projects and initiatives in over 30 countries around the world2 . 1  Government of Canada, 2014 2  Government of Canada, 2014
  23. 23. Institute for Leadership - BPI group - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - 23 CSR in the U.S. CSR is recognized as a critical component to business operations by American organiza- tions today. The Corporate Social Responsibility (CSR) team in the Bureau of Economic and Business Affairs leads the Department’s engagement with U.S. businesses in the promotion of responsible and ethical business practices. As shared by the U.S. Department of State, the mission of the CSR office is to: ƒƒ Promote a holistic approach to CSR to complement the EB Bureau’s mission of building economic security and fostering sustainable development at home and abroad. ƒƒ Provide guidance and support for American companies engaging in socially responsible, forward-thinking corporate activities that complement U.S. foreign policy and the principles of the Secretary’s Award for Corporate Excellence (ACE) program. ƒƒ Build on this synergy, working with multinational companies, civil society, labor groups, environmental advocates, and others to encourage the adoption of corporate policies that help companies "do well by doing good." EB’s CSR team coordinates a cross-functional, intra-departmental, and interagency team to provide support and guidance on major areas of responsible corporate conduct, including: -- Good Corporate Citizenship -- Contribution to the Growth and Development of the Local Economy -- Innovation -- Employment and Industrial Relations -- Human Rights -- Environmental Protection -- Natural Resources Governance, including the Kimberley Process -- Transparency -- Anti-Corruption -- Trade and Supply Chain Management -- Intellectual Property -- Women's Economic Empowerment The Organization for Economic Cooperation and Development (OECD) is a unique forum where the governments of 34 democracies with market econo- mies work with each other, as well as with more than 70 non-member econo- mies to promote economic growth, prosperity, and sustainable development. Source : U.S. Department of State OECD Guidelines: Concepts and Principles 1. The Guidelines are recommendations jointly addressed by governments to multinational enterprises. They provide principles and standards of good practice consistent with applicable laws and internationally recognised standards. Observance of the Guidelines by enterprises is voluntary and not legally enforceable. Nevertheless, some matters covered by the Guidelines may also be regulated by national law or international commitments. 2. Obeying domestic laws is the first obligation of enterprises. The Guidelines are not a substitute for nor should they be considered to override domestic law and regulation. While the Guidelines extend beyond the law in many cases, they should not and are not intended to place an enterprise in situations where it faces conflicting requirements. However, in countries where domestic laws and regulations conflict with the princi- ples and standards of the Guidelines, enterprises should seek ways to honour such
  24. 24. 24 - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - Institute for Leadership - BPI group principles and standards to the fullest extent which does not place them in violation of domestic law. 3. Since the operations of multinational enterprises extend throughout the world, interna- tional co-operation in this field should extend to all countries. Governments adhering to the Guidelines encourage the enterprises operating on their territories to observe the Guidelines wherever they operate, while taking into account the particular circum- stances of each host country. 4. A precise definition of multinational enterprises is not required for the purposes of the Guidelines. These enterprises operate in all sectors of the economy. They usually comprise companies or other entities established in more than one country and so linked that they may coordinate their operations in various ways. While one or more of these entities may be able to exercise a significant influence over the activities of others, their degree of autonomy within the enterprise may vary widely from one multinational enterprise to another. Ownership may be private, State or mixed. The Guidelines are addressed to all the entities within the multinational enterprise (parent companies and/ or local entities). According to the actual distribution of responsibilities among them, the different entities are expected to co-operate and to assist one another to facilitate observance of the Guidelines. 5. The Guidelines are not aimed at introducing differences of treatment between multina- tional and domestic enterprises; they reflect good practice for all. Accordingly, multi- national and domestic enterprises are subject to the same expectations in respect of their conduct wherever the Guidelines are relevant to both. 6. Governments wish to encourage the widest possible observance of the Guidelines. While it is acknowledged that small- and medium-sized enterprises may not have the same capacities as larger enterprises, governments adhering to the Guidelines never- theless encourage them to observe the Guidelines’ recommendations to the fullest extent possible. 7. Governments adhering to the Guidelines should not use them for protectionist purposes nor use them in a way that calls into question the comparative advantage of any country where multinational enterprises invest. 8. Governments have the right to prescribe the conditions under which multinational enterprises operate within their jurisdictions, subject to international law. The entities of a multinational enterprise located in various countries are subject to the laws applicable in these countries. When multinational enterprises are subject to conflicting requirements by adhering countries or third countries, the governments concerned are encouraged to co-operate in good faith with a view to resolving problems that may arise. 9. Governments adhering to the Guidelines set them forth with the understanding that they will fulfil their responsibilities to treat enterprises equitably and in accordance with international law and with their contractual obligations. 10. The use of appropriate international dispute settlement mechanisms, including arbitra- tion, is encouraged as a means of facilitating the resolution of legal problems arising between enterprises and host country governments.
  25. 25. Institute for Leadership - BPI group - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - 25 France’s CSR Engagement Recent legal evolutions at the EU level The European Commission is encouraging European countries to integrate CSR into their poli- cies and practices of all public and private stakes. A proposal for a directive on the disclosure of non-financial and diversity information has been made in April 2013 (the examination by the European Parliament and the European Council is momentarily unknown). This proposal sets the necessity to make non-financial reporting compulsory. Over 18,000 companies will have to observe this new obligation (this comprises of companies with over 500 employees, companies whose statement of account is above 20 million euros, and companies whose turnover is above 40 million euros). Companies will have to provide non-financial information on environmental and social issues, on respect for human rights, on policies fighting against bribery, and on gender equity policies. For each, they should describe their policies, give an account on the results, and give an evaluation of the risks on these five issues and how they propose handling it. Although, the rule offers companies the possibility of not disclosing all information, provided they explain why they choose to opt out of doing so. With this proposal, it is very clear that extra-financial information is becoming a key element in the private market place. But, public companies also have to comply to some CSR obligations. A directive on public procurement has in fact been adopted on January the 15th 2014 (Le mieux disant met l'Etat au défi). It aims at enhancing CSR in public procurement processes. European countries are required to integrate non-financial criteria in their procurement processes, and to consider CSR during production and manufacturing. The public contract will also outline concerns about gender equity, balance between professional and personal life, environmental protection and respecting the International Labor Organization standards. This new directive has been reciprocated well in France thus far. In fact, a new public CSR initiative has been recently launched in the country, reflecting how Europe’s legal requirements are influencing and shaping the establishment of CSR amongst domestic businesses. CSR in France: a lens on the CSR platform In France, a law regarding extra financial reporting has been in place since 2001. It was followed by the two “lois de Grenelle” in 2009 and 2010, which make it compulsory for large organizations to publish an annual report on CSR. Under the influence of the European Union and after a continuous lobbying of diverse actors from NGOs to employee unions, France has arrived at a new agreement. On June the 17th 2013, the government launched the CSR platform. It aims at creating a space where all the actors concerned by CSR can share their point of views on CSR, talk about concrete actions that have been or should be put in place, all in order to reach a certain degree of coherency on this large subject. The government of France hopes that this new platform helps organizations to implement CSR actions in large but also small companies (La législation française en matière de reporting extra-financier). The ambition is to spread awareness amongst French citizens on CSR related issues. The platform is made of 48 members split into 5 different colleges which are organized by specialty: public administration, employer representatives and members of professional associations (national association of HR directors, college of CSR directors, etc.), unions, NGOs and lobbying groups, and researchers (two economists specializing in CSR, one expert on gender equality and another on HR). The president of the platform is Patrick Pierron, national secretary of CFDT (one of the five main unions in France) and he is primarily in charge of the government of CSR policies. Michel Doucin has been designated permanent general secretary of the platform. Since 2008, he has been ambassador in charge of bioethics and CSR. After several discussions, it has been decided that members could voluntarily join one of the three working groups. Each of the three groups will focus on a specific theme. The issues to be discussed are the following:
  26. 26. 26 - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - Institute for Leadership - BPI group ƒƒ CSR, competitiveness and sustainable development in SMB. This working group has three main objectives: -- Identify all good practices of companies with less than 5,000 employees; -- Try to define and measure the economic advantages gained due to CSR, and evalu- ate if measurement should vary between sectors and amidst the size of companies; -- Identify how to promote CSR in those companies and help them to integrate CSR actions into their practices. ƒƒ How to improve financial transparency and companies’ governance on sustainable development by integrating European and international legal evolution on the subject? -- Identify all the different legal frameworks on extra-financial reporting (at a national and international level); -- Identify the tools that could help gain leverage in the promotion of responsible governance, that could help share the added value of business, and that could help develop responsible finances. ƒƒ How to enhance responsibility of companies on their value chain, meaning on their subsidiaries and their suppliers? -- Enhance the development of responsible purchases; -- Promote fair competitiveness; -- Precisely outline the extent to which companies should be responsible towards their subsidiaries; -- Promote the adherence of international legal frameworks The following insights into CSR in Italy and Spain are shared as released by the updated edition of CSR Europe’s Guide to CSR in Europe. Offering an overview of corporate social responsibility (CSR) currently, the country insights have been developed by CSR Europe’s national partner organisations based upon their areas of operations. Topics covered in each chapter include national CSR policies and legislation, key drivers of CSR, main organisational actors, and recent developments in various thematic areas including environment, supply chain, human rights, equal opportunities, community engagement, and sustainable products and services (A Guide to CSR in Europe, 2010). CSR in Italy CSR Policies and Legislation After the Italian Multi-Stakeholder Forum launched by the Labor Minister Maroni in 2004-2005, there were no longer high level CSR initiatives by the national Government or Parliament. While initiatives were often promoted locally with a bottom-up approach by some Regions – Toscana, Umbria, Marche, Emilia-Romagna – with very active legislation and programs. The current Minister of Labor and Social Affairs, Sacconi, published in 2009 a White Book on the Future Social Model, focusing on subsidiarity, employability, health and safety and equal opportunities. On the other hand, the activities of the Foundation I-CSR, established by Maroni to promote CSR, were further scaled down. The debate around the “social market economy” has been recently gaining ground, with the powerful Economic Minister Tremonti committed to promote, in collaboration with OECD, “global legal standards” based on propriety, integrity, transparency. Also having the Italian Tajani as Commissioner of DG Enterprise and Entrepreneurship might represent an opportunity to revive government interest in CSR.
  27. 27. Institute for Leadership - BPI group - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - 27 Key Drivers of CSR The key CSR drivers in Italy currently are climate change, safety in the workplace, high unemployment with youth unemployment also hindered by skill shortages, an increasingly diverse workforce (ageing population, lowest female activity rate in Europe, lack of culture in the integration of a large number of immigrants, up until a few decades ago many Italians were emigrants). Degree of Public Awareness on CSR Awareness with the public at large is growing, but their understanding remains relatively limited. On the contrary, in the most progressive sectors of the business community, accord- ing to a recent survey (link) conducted by Fondazione Sodalitas with the CEOs of 45 leading companies about the future of CSR in Italy, substantial progress has been achieved recently in integrating responsible and sustainable competitiveness into company strategies and related mainstreaming practices. Environment ƒƒ National Action Plan: Italy, as an EU country, signed the Kyoto Protocol in 2001 and it also now belongs to the EU ETS schemes. Italy approved on April 28th 2010, the CO2 Emissions National Allocation Plan for the new plants of the ETS system, effective from 2009 until 2012. Italy approved on June 11th the National Action Plan for Renewable Energies and Energy Efficiency, requested by the European Directive 2009/28/CE, which foresees that Italy will achieve the 17% target of renewable energy use by 2020. ƒƒ Main Environmental Challenges: Key challenges include the dominance of oil/gas as energy supplies, inefficient waste management (high level of waste production, still low recycling rates in many regions, predominance of landfill disposal) and water scarcity in several regions. The most relevant environmental challenges are: costal erosion; sea level rises along the costal areas; air pollution, mainly in the Pianura Padana geographic area, and in the cities located in this region. Levels of PM10 and other pollutants are often higher than maximum permitted levels. ƒƒ Energy and Eco-Efficiency: Companies and sectors (such as glass, ceramic and cement industries) which are expected to reduce their gas emissions have been identified and their reduction targets assigned. In recent years, the progress in achieving Kyoto objectives has been slow at the national level, due to reluctance by businesses and government due to their claim that it could be damaging for an economy still relying heavily on manufacturing. However, the economic crisis had a positive impact in the CO2 emission reduction, and it’s now foreseeable to achieve the Kyoto target (-8% for Italy). The renewable Energy sector grew thanks to the introduction of an incentive scheme (“Conto Energia”) that is the most generous in Europe. It is estimated that the production of renewable energies by 2008 was 60,5 TWh, while by 2020 107 TWh should be produced (a majority of this derived from hydroelectric) in order to meet the targets of the action plan. Public Awareness on Environment Regional and local levels demonstrate good awareness and carry out successful initiatives. There are different forms of incentives for private citizens and for companies: Green and White Certificates, “Energy Account” and detraction from taxes. Consumers are becoming greener, but this is still a relatively recent phenomenon. At a National level, there is an increas- ing awareness of this issue: the Ministry of the Environment has recently launched the SCP (Sustainable Consumption and Production) Strategy in order to favor and spread models of sustainable consumption and production.
  28. 28. 28 - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - Institute for Leadership - BPI group Supply Chain There are no national programs or partnerships related to supply chain control, while manage- ment systems are widespread with Italy ranking number one worldwide in SA8000 certification. Several suppliers of big companies are involved in the control process. Additionally, many Tuscan SMEs are certified through the regional Fabrica Etica process. Requirements on control of environmental aspects are also becoming increasingly important. Human Rights Italian laws, in general, respect ILO standards on human rights and working conditions. The rights of employees are described in the Law of Work Protection covering work safety, trainings and working conditions. An important document that has been published and diffused is the “OECD Guidelines on CSR focusing on SMEs”promoted by the Italian Foreign Ministry in the context of the project “Sustainable development through the Global Compact”. Equal Opportunities Gender equality is an especially important issue in Italy, as women’s activity rate is considerably behind the rest of Europe. Commitment by companies to well structured diversity management programs is still rather limited. A big step forward has been the launch in October 2009 of the Italian Diversity Charter by leading business networks and the network of Equality Bodies, with the patronage of the Ministries of Employment and Equal Opportunities. By September 2010, about 80 companies, employing more than 500.000 people had signed the Diversity Chart. Conversely, integration of immigrants and foreign workers is well developed in some compa- nies, especially those with a high percentage of foreign employees. Community Engagement ƒƒ Perceived role of businesses in the local community: Italy has a long tradition of company philanthropy, evolved in time from paternalism to partnering with NGOs. ƒƒ Cooperation between local communities and businesses: There is encouraging growth in Corporate Foundations, established also by SMEs, to enhance effectiveness of philan- thropic programs. The first baseline survey on Italian Corporate Foundations, conducted in 2009 by Fondazione Sodalitas in partnership with Università Cattolica and Fondazione Giovanni Agnelli, allowed this emerging community to surface and profile its key features and challenges. Employee volunteering, first adopted by multinationals, is gaining ground also with Italian companies, including SMEs. Sustainable Products and Services The number of SMEs working on sustainable products is growing, especially in the mass market. There are also some good examples of innovation in the service sector (especially for waste management and green energy). The new Sustainable Products and Services Program of the Ministry for Environment is promoting Green Public Procurement and local programs to increase green consumer policies. In this respect, a working group between different levels and departments of Government, Control Bodies, NGOs and best practice companies was recently established. Main CSR Challenges The main CSR challenges in Italy are engaging public authorities in the CSR debate and enforcing a strategic approach towards CSR involving the organization as a whole, especially the products and sales departments.
  29. 29. Institute for Leadership - BPI group - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - 29 CSR in Spain CSR Policies and Legislation Spain’s national government has been gaining prominence in CSR areas, especially during the last 4 years and some important legislation has come into force: ƒƒ LISMI. Ley 13/1982, Law for the social integration of handicapped people, among other measures it establishes the obligation of hiring a minimum quota of 2% of handicapped people in companies with more than 50 workers. (It also establishes alternative measures). ƒƒ LO 3/2007 for the effective equality between women and men. Organic law passed in 2007 that pursues to guarantee the effective equality between women and men within all fields, especially within the labor market. ƒƒ Ley 30/2007 on Public Procurement and PRE/116/2008 the Green Public Bid Plan of the ƒƒ General Administration of the Government and its Public Bodies. Environmental and social criteria are included under certain requirements for the hiring of Civil Servants. ƒƒ Royal Decree 221/2008 by which the State Council of Social Responsibility of Companies is set up3. It’s a multi-stakeholder advisory body for the State Government regarding CSR that includes representatives from different key areas for CSR such as public administra- tions, enterprises, trade unions or organizations and institutions focused on CSR. ƒƒ Royal Decree 1615/2009, for regulating the granting and use of the distinctive “Equality in the Company.” At a regional level, there have been some interesting initiatives like a Corporate Citizenship Law in Valencia (11/2009 of 20 November), a bill of law of steward- ship and governance in Baleares and a bill of law of CSR in Extremadura. Key Drivers of CSR According to the 5 working groups created in the State Council, there are 5 key areas in Spain: ƒƒ Diversity management, social cohesion and cooperation development ƒƒ CSR to face economic crisis: CSR contribution to productive economy ƒƒ Transparency, communication, CSR standards and Reporting ƒƒ Social Responsible Investment ƒƒ Integrating CSR in Education Scheme. Main CSR Actors The main state actor is MTIN, Ministry of Labour and Immigration, who is in charge of CSR. Spanish regions (Comunidades Autónomas) are also approaching CSR in a formal way. Islas Baleares (Balearic Islands) has created the Dirección General de RSE4. Other regions such as Cataluña, País Vasco and Andalucía are taking action. Other organizations pushing forward CSR agenda are: ƒƒ Forética as a multistakeholder organization (including companies, NGOs and universities), ƒƒ Club de Excelencia en Sostenibilidad as a business organization, ƒƒ Asepam, the Spanish association of Global Compact or the different CSR Observatories promoted by workers and NGOs. Degree of Public Awareness on CSR In relation to CSR awareness, Spain has a long way to go. According to Informe Forética 2008 90% of big companies know what CSR is about but only 49.3% of small companies carry it out. In this sense, CSR is present in the vision, mission and strategy of most large companies in Spain. Nearly 80% of them have generalized policies on the subject and the creation and consolidation of specific units within the organization. On the other hand, only 48.3% of Spanish consumers could identify what CSR was according to the same report.
  30. 30. 30 - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - Institute for Leadership - BPI group Media Coverage CSR specialist media has been developing in recent years, especially online. Broader media are just starting to cover CSR (normally within special reports). The economic crisis has rein- forced media interest on CSR as it’s seen as a way out of it. Environment In 2007, the Spanish Government developed “Spanish Climate Change and Clean Energy Strategy” in defining ongoing actions and establishing objectives together with a follow-up plan, assessment and verification. For public procurement please refer to section 2. Among main Environmental Challenges are greenhouse gas emissions, water availability, demographic change, as well as unsustainable urban development. In the National Climate Change and Clean Energy Strategy there is one chapter dedicated to Energy Efficiency, with objectives, measures and indicators. Foretica’s report or Informe Forética 2008 shows a consensus on the origin of Climate Change; more than 80% of the people interviewed acknowledged it and agreed that it has been produced by human activities together with natural phenomenon. Supply Chain According to Informe Forética 2008 Spanish companies are aware of the importance of complying with Human Rights in their Supply Chain and with their workers (and so do customers) and it appears as one of the top issues to label a company as socially responsible. Nonetheless, only 12% of companies develop any kind of social or environmental audits for their suppliers to monitor if they are working on it. Human Rights No big problems in relation to Human Rights in companies operating just in Spain, medium risk in relation to immigrant workers, especially in the construction sector. Multinational companies are working hard on these issues abroad, especially in relation to supply chains. Multi-sectoral research conducted by Club de Excelencia en Sostenibilidad shows that implementing Suppliers Code of Conduct has become an increasingly common practice in enterprises in order to protect their own public reputations. Equal Opportunities Although strong public involvement (with initiatives such as the Equality Ministry, Organic Law for the effective equality between women and men, Diversity Charter,…) is still one of the biggest issues in Spain. Big companies, with more than 250 employees, are compelled to develop equality programs but there are also voluntary initiatives both public (Distinction of equality) or by other organizations (i.e. Charter de la diversidad). Community Engagement Community Engagement is extensively developed in Spain especially thanks to Savings Banks and their social programs, and thanks to the Foundations created by big companies which work hard in this area. Sustainable Products and Services According to Forética’s report (Foot note 1) nearly 40% of Spanish consumers have given up buying products produced by irresponsible companies. Around 55% declared that they would pay more for a product from a responsible company if they could be 100% sure about it. Another report on the issue was published in 2008 by CECU11 (Consumer associ- ation) Another research study published by Club de Excelencia is “Consumo Responsible y Desarrollo Sostenible”. Company Best Practices Best practices presented to the 2007 and 2008 CSR Spanish Marketplace El Mercado de la RSE carried out by Forética can be downloaded, and organized by up to 12 categories.
  31. 31. Institute for Leadership - BPI group - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - 31 Club de Excelencia en Sostenibilidad has joined best practices in the field of CR in the “Best Practices Catalogue in Corporate Responsibility”. Main CSR Challenges The main challenges are to bring CSR to SMEs, and to generate greater consumer awareness. Club de Excelencia en Sostenibilidad in collaboration with PWC and Madrid City Council has developed an initiative to help SMEs plan their strategies on CSR15. Specific CSR issues could be equal opportunities and CSR management, and the relation of CSR to the economic crisis. The Role of CSR in India India is widely regarded as a country in which corporate social responsibility has long played an important role. National and international nongovernmental organizations and UN agencies are involved in the public debate in the business community and the media. However, the involvement of the business community is concentrated among a few long-established family-owned companies that contribute a significant amount in the field of CSR, in both theory and practice. The Indian subsidiaries of German companies are bound by their parent companies’ guidelines for socially responsible behavior, but how these guidelines are actually implemented is left up to each subsidiary. Their CSR activities focus on their employees (providing training and improving social security), the environment and aid efforts within India or in the region, which are currently concentrating on providing help to tsunami victims. Public policymakers are seeking to achieve inclusive and sustainable growth, and calling on private enterprise to contribute its share. There is no evidence of CSR activities in the informal sector of the Indian economy, which is responsible for slightly less than half of GDP and employs some 93 percent of India’s workforce. Indeed, workers in this sector are afforded no rights or protections whatsoever, and all indications are that no efforts are being made to fight poverty, promote education or health, protect the environment or encourage employee participation in business development. The UN Global Compact seeks to promote the CSR activities of businesses in India. However, it has not succeeded in involving important NGOs, or most importantly, the unions. The UN Global Compact is not well known within the business sector or the NGO community. For some time now, German development organizations (GTZ, InWent) have been cooperating closely with the country’s important trade associations. The Indo-German Chamber of Commerce has developed its own approach to CSR, and provides conceptual and advisory support for German companies in India. While CSR is not at the top of the agenda of German political foundations, some of them are starting to devote more attention to this area. The German government, represented by the Ministry of Labor, is working to achieve greater international cooperation on CSR under the Heiligendamm Process, which includes India as one of five outreach countries. Talks have been held in the context of a formalized partnership between Germany and India. Representatives of the German business community meet with embassy officials at least once a year, during their monthly business lunches, to discuss CSR. Source: German Embassy, New Delhi
  32. 32. 32 - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - Institute for Leadership - BPI group The Role of CSR in China Corporate social responsibility (CSR) is receiving more attention in China, although it still plays only a marginal role for the majority of Chinese companies, particularly private ones. Large state-owned companies and companies that invest in China are expected to increase their social involvement, which will no doubt have an effect on small and medium-sized enterprises as well. Foreign companies have traditionally been active in this area, and they are increasingly involved in environmental and labor-protection projects. Generally they are guided by their own corporate standards. As domestic and foreign private companies engage in direct competition, they are recognizing that social responsibility can be used as a tool in marketing their products and increasingly resonates with the growing middle class, which has the resources to purchase these products. CSR receives little media coverage. After the Sichuan earthquake in the spring of 2008, however, it was obvious that the efforts of domestic and foreign companies were recognized and appreciated. Source: German Embassy, Beijing The Role of CSR in South Africa ICompanies’ social responsibility is an important topic in South Africa with respect to the economy, the state, and public opinion. There is active support from the government as well as domestic and foreign companies. In response to a 2005 survey by Trialoge of more than 100 stock exchange-noted companies in South Africa, 73.5% of those surveyed said that they take corporate citizenship “very seriously,” 24.5% said that they take it “seriously.” The social involvement of companies in South Africa reaches back to the time of social grievances during apartheid. Until 1994, many companies invested actively in social initiatives since the state saw no need to act on behalf of the colored groups in the population. Business recognized that the poor living conditions of the black majority were putting the brakes on economic development. In this context, the “Urban Foundation,” which was established in 1976 (today: National Business Initiative, NBI) set as its goal the improvement of the quality of life of the black communities. Since 1994, political change and the efforts to balance out the unequal distribution of wealth from the times of apartheid have driven CSR forward in South Africa. Decisive for the involvement today is the “Black Economic Empowerment Act” (BEE) of 2003, which was set up by the government and specifies the advancement of historically-disadvantaged groups in the population. Especially the “Corporate Social Investment” guidelines of the BEE have a supporting effect since with their assistance, CSR programs are formalized and the results can be communicated. In 2003, companies spent 2.35 billion RAND (approximately 193.4 million EUR) for social programs in South Africa. Companies’ expenditures in the CSR sector thus correspond to approximately half of what international donors gave for comparable activities, however only 1% of the total that the state invests in social projects each year. The trend indicates increasing expenditures in the CSR sector. Sources: German Embassy, Pretoria / Stef Coetzee, CSR-Towards a new paradigm
  33. 33. Institute for Leadership - BPI group - REDRAWING CORPORATE SOCIAL RESPONSIBILITY - 33 CSR’s Influence on Human Resource Management chapter 3Today, as organizations face economic crises, structural upheaval, societal changes, environmental degradation, inter- nal and external conflicts, they are seeking for a concrete solu- tion which may offer sustainability in the days to come - a solution w h i c h provides value in creating a better today and an even better tomorrow. With CSR emerging as the novel approach to conducting business currently, it is becoming more apparent that the pull between organizational goals and CSR based goals is a product of the aim to co-create both private and public value. A 2012 Harvard Business Case Paper, Why Every Company Needs a CSR Strategy and How to Build It, proposes that: “The heart of CSR’s concept rests on the ability of a company to create private value for itself, which in turn creates public value for society.” It continues to elaborate a key reality for organizations who seek to adopt CSR into the core of their business operations – a point which examines the analysis of value creation. For example, top management of large corporations who are required to inexcusably adhere to their business’ figures will not place the concept of creating shared value at the top of their priority list. Whereas, when concerning smaller players in the marketplace, namely, smaller organizations, it would not be financially viable to pursue identical CSR goals which market leaders, and expectedly, larger, more successful organizations seek after. Hence, in this situation, the kind of shared value a smaller organization would strive for would have to be streamlined and more appropriately outlined in order to truly benefit proportionately from the value it creates through its CSR efforts. Issues such as these are exactly why the application and integration of CSR requires the involvement and mediation of the HR function. The bottom line is essentially that the effective and active integration of CSR influences and impacts all company activity, deeming it as a substantially demanding process in which HR plays a key role. The collaboration of CSR with HR management efforts will lead an organization to several fundamental changes concerning objectives, priorities, and respective course of action required. Ultimately, this will necessitate a strong commitment and acknowledgement of the necessity of the proposed changes from top management as well as from each key player within the HR management team. Looking back for example, the history of strategic integration of CSR values dates back to at least the 19th Century in the UK where the innovative working practices of Quaker organiza- tions such as Cadburys and Rowntree Mackintosh put employee welfare and ethical behavior at the heart of their business values (Rangan, Chase, Karim, 2012). As mentioned in the introduction, HR plays a significant role in leading and coordinating various aspects of CSR. This is as social responsibility is directly related to a company’s values, as it naturally involves people and their relationships. Identically, organizational culture greatly influences how people interact and their following contributions to society, as the nature of a company’s internal culture determines how employees view CSR related issues. According to Fernandez, Junquera & Ordiz, organizational culture and HR decisions are critical components for creating a sustainable competitive.

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