This document provides an overview of a course on corporate social responsibility from an international perspective. The course objectives are outlined, including defining CSR, its link to competitive advantage, implementation, and social entrepreneurship. The course is divided into four parts that cover an introduction to CSR including its origins and links to sustainable development, corporate governance, and business ethics. It also discusses stakeholders, CSR implementation, and social entrepreneurship. Key concepts like hard and soft law in the EU and France are examined.

1. CSR- INTERNATIONAL
PERSPECTIVES
Patrick GILORMINI

2. Course objectives
• What is corporate social responsibility ?
• How corporate social strategy leads to
competitive advantage?
• How corporate social responsibility is
implemented and managed ?
• What is corporate social entrepreneurship?

3. Course overview
• Part 1: Introduction to CSR
1. Corporate social responsibility linked to
sustainable development, corporate
governance and ethics
2. Stakeholders approach to business and society
relationship
3. Hard law and soft law in E.U. and France
• Part 2 : The business case for CSR
• Part 3 : CSR Implementation
• Part 4: Social Entrepreneurship

4. INTRODUCTION TO CSR
Part 1.1

5. What defines a corporation ?
• Corporations regarded as ‘moral persons’ in the
eyes of the law : rights and responsibilities in society
• Corporations regarded as notionally ‘owned’ by
shareholders , but exist independently of them :
limited liability
• Managers and directors have a ‘fiduciary’
responsibility to protect the investment of
shareholders.

6. Origin of CSR
• Howard Bowen :American economist and president
of the University of Iowa. He coined the concept of
Corporate Social Responsibility.
• He defined Corporate social responsibilities as "the
obligations of businessmen to pursue those policies,
to make those decisions, or to follow those lines of
action which are desirable in terms of the objectives
and values of our society.“
[Social Responsibilities of the Businessman, 1953]

7. Can a corporation have social responsibility ?
Milton Friedman [1970] : “the social responsibility of
business is to increase its profits”
Corporate executives have responsibilities to their
employees, stockholders, and principals to maintain
the highest financial intake possible while acting
within the bounds of the law of social mores, but
these executives should not perpetuate their own
social agendas (or the popular social agenda of the
day) with the corporations’ finances.

8. Can a corporation have social responsibility ?
Milton Friedman premises :
• Only human beings have a moral responsibility for
their actions
• Its managers' responsibility to act solely in the
interests of shareholders
• Social issues and problems are the proper province
of the state rather than corporate managers
If corporate executives start pandering to the desires
and whims of society then they will be elevating
socialist doctrines and corrupting the free market
economy.

9. SD gaining momentum
1972 United Nation
conference on environment,
Stockholm
Kyoto
Protocol
2002, Johannesburg
World Summit on SD
1970 1980 1990 2000
Stop growth and protect
environment
Changing ecodevelopment
concepts
Scientifics et NGO
Changing
actors
Grenelle
de l’envir.
2007
Horizon
Grenelle
Corporate social responsibility
Triple Bottom Line
Corporations
1992, Rio
Earth Summit
Sustainable development
Governments, Nations
1987 Brundtland
Commission
Consumers
1999 ONU
Global
compact
2012
Momentum gained in 20 ans
July 2012 ESDES Université Catholique de Lyon 9

10. Part 1.1
CSR LINKED TO SUSTAINABLE DEVELOMENT,
CORPORATE GOVERNANCE AND BUSINESS ETHICS
ESDES Université July 2012 Catholique de Lyon 10

11. Ethics , governance, CSR and SD linked in a continuum
Sustainable
development
Corporate social
responsibility
Corporate
Governance
Business ethics
Macro-économic
and world wide
social issues
Micro-economic et
regional issues
Corporate
management and
control issues
Corporate strategy Corporate structures
Decision making
and processes
Moral issues and
Personal
dilemnas
pgilormini@univ-catholyon.fr 11 septembre 2009

12. Sustainable development
The Declaration of Rio on Environment and Development ,
1992, recognized that sustainable development was a
balance of three interconnected dimensions:
Territorial and
global
framework
pgilormini@univ-catholyon.fr 12 septembre 2009

13. Corporate social responsibility
What are the responsibilities of business in the context of a wider society ?
• How they are defined and negotiated ?
• How they are managed and organized ?

14. Corporate social responsibility
Archie B. Carroll (1983:608), “corporate social responsibility involves the conduct of a
business so that it is economically profitable, law abiding, ethical and socially supportive.
To be socially responsible then means that profitability and obedience to the law are
foremost conditions when discussing the firm’s ethics and the extent to which it supports
the society in which it exists with contributions of money, time and talent”

15. Corporate social responsibility

16. What does CSR involve ?
• Business has social obligation above and beyond
making a profit
• Corporations have an obligation to constituent
groups in society other than stockholders and
beyond that prescribed by law or union contract
• CSR requires voluntary action
pgilormini@univ-catholyon.fr 16 septembre 2009

17. Six characterizations of CSR
Characterization Description
License to operate CSR is a condition for doing business.
Find the most effective way to meet
stakeholders’ requirements
Long-term business investment Like RD , CSR improve the business
environment for future progress
Vehicle for achieving goals and
reputation
Stronger customer loyalty, more
committed employees,…
Activity to avoid exposure to risk Avoid being singles out or exposed to
unnecessary outsider intrusion
Economic and constructive Companies reinforce the economic
foundation and viability of the
communities in which it operates
Oxymoron ! Companies are designed to increase
shareholder wealth !

18. Corporate governance
• The formal system of oversight, accountability,
and control for organizational decisions and
resources
• Governance issues:
– Board of directors independance, quality, and
performance
– Shareholders activism and investors confidence
– Internal control and risk management
– Executive compensation
July 2012 ESDES Université Catholique de Lyon 18

19. Views of Corporate Governance
• Shareholder model (stock companies) :
– Grounded on classic economic precepts
– Goal of maximizing wealth for investors and
owners
– Managers act as agents of investors whose
primary goal is increasing the value of the
stock they own
• Democratic model ( cooperative companies ):
– One person , one vote right
– Elective process for nomination
July 2012 ESDES Université Catholique de Lyon 19

20. Views of Corporate Governance
• Stakeholder model of corporate governance :
– Company has also a responsibility to answer to other
stakeholders including employees, suppliers, government
regulators, communities and special interest groups with
which it interacts
– Due to limited resources companies must determine which
of their stakeholders are primary
– Once primary groups have been identified managers must
implement appropriate governance mechanisms to
promote development of long term relationships
July 2012 ESDES Université Catholique de Lyon 20

21. Business Ethics
• Moral obligations involving the distinction
between what is good and what is bad
• Ethical issues :Honesty , Fairness, Integrity
– Abusive or intimidating behavior
– Conflicts of interests
– Bribery
– Lying…
July 2012 ESDES Université Catholique de Lyon 21

22. Paul Ricoeur (1913-2005)
• Aristotelian view that action always aims at some good.
• Its ultimate aim is to be a constituent in a “‘good life’ with
and for others in just institutions” (Oneself as Another,
262).
– For a good life, one must have associates with and for
whom one acts.
– Furthermore, societal institutions, particularly political
institutions, set the context for action and significantly
affect its efficacy.
– For a good life, we aim to have institutions that meet
our sense of justice in the obligations they impose and
the privileges and opportunities they grant (Oneself as
Another, 180).

23. Ethics , governance, CSR and SD linked in a continuum
Sustainable
development
Corporate social
responsibility
Corporate
Governance
Business ethics
Macro-économic
and world wide
social issues
Micro-economic et
regional issues
Corporate
management and
control issues
Corporate strategy Corporate structures
Decision making
and processes
Moral issues and
Personal
dilemnas
pgilormini@univ-catholyon.fr 23 septembre 2009

24. Sustainable development
World Commission on
Environment and
Development ( Brundtland),
1987 :
”Sustainable Development is
development that meets the
needs of the present without
compromising the ability of
future generations to meet
their own needs.
septembre 2009 pgilormini@univ-catholyon.fr 24

25. Sustainable development
Agenda 21 : a blueprint for sustainability in the 21st century.
• Provides options for combating the deterioration of land, air and water,
whilst conserving habitats and their diversity.
• Deals with poverty, over consumption, health and education.
• Promotes roles for all. Everyone – governments, business, trade unions,
scientists, teachers, indigenous people and youth – have roles to play in
achieving sustainable development and should be involved in the
decision making processes.
• Encourages the reduction of environmentally and socially detrimental
processes, but within a framework which allows economic success

26. Sustainable development
France move towards a green and equitable economy:
• Sustainable consumption and production,
• The knowledge society
• Governance
• Climate change and energy
• Sustainable transport and mobility
• Conservation and sustainable management of biodiversity
and natural resources
• Public health, risk prevention and management
• Demography, immigration and social inclusion
• International challenges of sustainable development and the
fight against global poverty
http://www.developpement-durable.gouv.fr/IMG/pdf/NSDSp60.pdf

27. Sustainable development
• Sustainable development calls for improving the quality of
life for all of the world’s people without increasing the use of
our natural resources beyond the earth’s carrying capacity.
• The long-term success of sustainable development will
depend on new approaches to transform business-as-usual
at every level of society, both public and private.
• In addition to the important role played by governments, the
active leadership of NGOs, businesses and other Major
Groups is key to transforming sustainable development from
vision to reality.

28. Sustainable development
• Major Groups identified in Agenda 21:
– Business and industry
– Children and youth
– Farmers
– Indigenous people
– Local authorities
– Non-governmental organizations
– Scientific and technological communities
– Women
– Workers and trade unions

29. Sustainable development
U.N. Open Working Group proposal for Sustainable Development Goals

30. Sustainable development
U.N. Knowledge platform : http://sustainabledevelopment.un.org/index.html

31. Ethics , governance, CSR and SD linked in a continuum
Sustainable
development
Corporate social
responsibility
Corporate
Governance
Business ethics
Macro-économic
and world wide
social issues
Micro-economic et
regional issues
Corporate
management and
control issues
Corporate strategy Corporate structures
Decision making
and processes
Moral issues and
Personal
dilemnas
pgilormini@univ-catholyon.fr 31 septembre 2009

32. A semiotic square analysis of the concept of « good »
Good Bad
Benignness Indifference
Contrariety or opposition
Complementarity or implication
22/11/2014 Patrick Gilormini 32

33. Legal, illegal and just
• Four categories of actions based on rightness
– Those that are legal to do but which the law
does not require to be done
– Those that must be done or not done according
to law
– Those that are illegal but may well be justified
(i.e. a requirement of justice )
– Those that are just but illegal

34. Major issues in business ethics
ETHICS
Prescribing the good life
MORALITY
Proscribing bad actions
GOOD
Positive action for
good or to prevent
harm being done
BENIGN
Avoiding doing
harm, supports the
doing of good but
takes no positive
action to do good
INDIFFERENT
Ignoring harm done
by or to others and
disregarding the
rights of others
BAD
Taking action to do
harm
Taking no action to
prevent harm being
done
Social
developme
nt and
caring
Social
responsibilit
y and
supporting
Reciprocity Fairness Lying and
dishonesty
Cheating
and
selfishness
Bullying
and social
irresponsi-bility
Harming
and social
environ-ment
disengage-ment

35. Part 1.2
STAKEHOLDERS APPROACH
TO BUSINESS AND SOCIETY RELATIONSHIPS
ESDES Université July 2012 Catholique de Lyon 35

36. Who is a stakeholder ?
• « Any group or individual who can affect or is
affected by the achievement of the organization’s
objectives » Freeman , 1984
• « Bear some form of risk as a result of having
invested some form of capital , human or financial ,
something of value, in a firm » or « is placed at risk
as a result of a firm’s activity » Clarkson 1994
July 2012 ESDES Université Catholique de Lyon 36

37. A firm’s stakeholders
• Constituents that have a stake in , or claim on ,
some aspects of a company’s products , operations
, markets, industry and outcomes
• Individuals or groups who depend on the
organisation to fulfill their own goals and on whom,
in turn, the organisation depends
July 2012 ESDES Université Catholique de Lyon 37

38. A firm’s stakeholders
Globalization
Economic Stakeholders
Customers, creditors,
distributors, suppliers
Organizational Stakeholders
Employees, Managers,
Shareholders, Unions
Societal Stakeholders
Communities
Government and
regulators, Nonprofits
and NGO’s ,
Natural
Environment
Technologies
July 2012 ESDES Université Catholique de Lyon 38

39. A sorting rationale for stakeholder identification
1. Firm and stakeholder are in relationship
2. The firm is dependant on the stakeholder
3. The stakeholder has power on the firm
4. Firm and stakeholder are in contractual
relationship
5. The stakeholder has a legitimate or moral
claim on the firm
6. The stakeholder has something at risk
July 2012 ESDES Université Catholique de Lyon 39

40. Stakeholder typology
POWER
URGENCY
LEGITIMACY
Dormant
Dominant
Discretionary
Definitive
Dependant
Dangerous
Demanding
Non Stakeholder
Mitchell, Agle, Wood, 1997
July 2012 ESDES Université Catholique de Lyon 40

41. What about a stakeholder theory?
Donaldson and Preston, 1995

42. What about a stakeholder theory?
• The stakeholder theory is descriptive : the corporation is a
constellation of cooperative and competitive interest
possessing intrinsic values.
• The stake holder theory is also instrumental : a framework
for examining the connections between management
practice and achievement of performance goals
• Its fundamental basis is normative:
– Stakeholders are identified by their interests in the
corporation, whether the corporation has any
corresponding functional interest in them
– Each group of stakeholders merits consideration for its
own sake and not merely because of its ability to further
the interests of some other groups , as the shareowners

43. What about a stakeholder theory?
• The stakeholder theory is managerial:
– it recommends attitudes, structures and practices
– It requires simultaneous attention to the legitimate interest
of all legitimate stakeholders
• However :
– simultaneous attention to stakeholders interests does not
resolve the longstanding problem of identifying and
evaluating their “legitimate” stakes in the corporation
– Does not imply that all stakeholders should be equally
involved in all processes or decisions
Donaldson and Preston, 1995

44. Part 1,3
HARD LAW AND SOFT LAW IN FRANCE
AND THE EUROPEAN UNION

45. CSR between Hard law and Soft law
Hard law means binding laws. To
constitute law, a rule, instrument or
decision must be authoritative and
prescriptive. In international law, hard
law includes self-executing treaties or
international agreements, as well as
customary laws. These instruments
result in legally enforceable
commitments for countries (states)
and other international subjects.
Ex. conventions or international
agreements
Soft law means commitments made
by negotiating parties that are not
legally binding.
Ex. E.U. codes of conduct,
guidelines, communications

46. Legislative process in E.U.

47. What is CSR ?
European Commission Green Paper “Promoting a
European Framework for Corporate Social
Responsibility” COM (2001) 366
• CSR as a concept whereby companies integrate
social and environmental concerns in their
business operations and in their interactions
with their stakeholders on a voluntary basis as
they are increasingly aware that responsible
behaviour leads to sustainable business
success.
July 2012 ESDES Université Catholique de Lyon 47

48. What is CSR in E.U.?
European Commission Green Paper “Promoting a
European Framework for Corporate Social
Responsibility” COM (2001) 366 :
• CSR is also about managing change at company level
in a socially responsible manner. This happens when a
company seeks to set the trade-offs between the
requirements and the needs of the various stakeholders
into a balance, which is acceptable to all parties. If
companies succeed in managing change in a socially
responsible manner, this will have a positive impact at
the macro-economic level.
July 2012 ESDES Université Catholique de Lyon 48

49. What is CSR in E.U. ?
A renewed EU strategy 2011-14 for Corporate Social Responsibility:
The Commission puts forward a new definition of CSR as “the
responsibility of enterprises for their impacts on society”. Respect for
applicable legislation, and for collective agreements between social
partners, is a prerequisite for meeting that responsibility. To fully meet
their corporate social responsibility, enterprises should have in place a
process to integrate social, environmental, ethical, human rights and
consumer concerns into their business operations and core strategy in
close collaboration with their stakeholders, with the aim of:
– maximizing the creation of shared value for their
owners/shareholders and for their other stakeholders and society at
large;
– identifying, preventing and mitigating their possible adverse impacts.
July 2012 ESDES Université Catholique de Lyon 49

50. What does CSR involve in E.U. ?
• To maximize the creation of shared value, enterprises are
encouraged to adopt a long-term,strategic approach to CSR, and
to explore the opportunities for developing innovative products,
services and business models that contribute to societal wellbeing
and lead to higher quality and more productive jobs.
• To identify, prevent and mitigate their possible adverse impacts,
large enterprises, and enterprises at particular risk of having such
impacts, are encouraged to carry out risk-based due diligence,
including through their supply chains.
• Certain types of enterprise, such as cooperatives, mutuals, and
family-owned businesses, have ownership and governance
structures that can be especially conducive to responsible business
conduct.
• For most small and medium-sized enterprises, especially
microenterprises,the CSR process is likely to remain informal and
intuitive.
[COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN
ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS]
July 2012 ESDES Université Catholique de Lyon 50

51. Reporting Policies among the European Member States

52. Reporting Policies among the European Member States
“comply or explain” approach: It requires companies to
report how they comply with the “corporate governance
code”, or to explain where and why not.

53. Legislative process in France

54. French CSR policy and legislation
• Laws regulating non-financial data in private bodies in
France as early as 1977 with the Social Assesment Law
(Bilan Social), which required listed companies to report on
asset of social data.
• The Nouvelles Regulations Economiques (NRE) law passed
in 2001, through article 116, makes reporting on social and
environmental impacts mandatory for listed companies. the
NRE law has acted as an impulse for non-financial
reporting.
• The combination of both volunteer and legal actions, and
the necessity to give a global answer to all the stakeholders
gave a great impetus these last five years to non-financial
reporting and CSR policies.

55. National Sustainable Development Strategy
• The first national sustainable development strategy was set in motion on
3 June 2003 by the Raffarin government, for a period of five years.
• It was revised and renewed in 2008 for a further five years, building on
the experience and outcomes of the first period of implementation.
• The new national sustainable development strategy for the 2010-2013
period was adopted on 27 July 2010 by the Inter-Ministerial Committee
for Sustainable Development.
• This 2010-2013 national sustainable development strategy is centred on
nine strategic issues: sustainable consumption and production -
knowledge society - governance - climate change and energy -
sustainable transport and mobility - conservation and sustainable
management of biodiversity and natural resources - public health, risk
management and prevention - demography, immigration and social
inclusion - and international challenges relating to sustainable
development and the fight against poverty in the world.

56. The Grenelle Environment Round Table
• Launched in 2007, the Grenelle Environment Round Table
comprises a series of meetings between the State and
representatives of civil society (local authorities, NGOs,
employers and workers) aiming to arrive at long term
decisions regarding sustainable development.
• A total of 268 commitments have arisen from the Grenelle
Environment Round Table.
• Between 2008 and 2010, the Parliament adopted the texts
that were required to turn these commitments into effective
legislation: the Grenelle I Act (promulgated 3 August
2009) and the Grenelle II Act (promulgated 12 July 2010).
Article 53 of the Grenelle I Act and Articles 224-225 of the
Grenelle II Act cover matters of governance, reporting and
SRI.

57. New CSR reporting obligation with article 225 of 12 July 2010
The article 225 requires a CSR reporting obligation:
- for listed companies
- for others companies (number of employees and balance sheet total is defined by a
decree of the State Council (Conseil d'Etat))
It also includes information on the way in which society takes account of the social and
environmental consequences of its activity as well as its societal commitments for
sustainable development.
The staff representative institutions and stakeholders participating in dialogue with the
companies can put forward their opinion on the approach of corporate social,
environmental and societal responsibility as a supplement to the indicators presented.
The social and environmental information with regard to legal and regulatory
information is subject to verification by an independent third-party body, according to
terms set by Conseil d'Etat decree. This verification gives rise to a recommendation
which is sent to the shareholders' or members' meeting at the same time as the report
of the board of directors or executive board.
Several State Council (Conseil d'Etat) decrees enforce this article.

58. Other regulatory initiatives
• Diversity is also the object of regulations as a series
of law recommended companies to negotiate
agreements with trade unions on gender equality.
In March 2006, a law proposes to reduce the
salary gap between men and women by 2010. In
case of no respect of this engagement there should
be some financial sanctions.
• Equally, a quota of 6% of disabled people should
be respected in the staff of companies with more
than 20 employees.

59. Key drivers of CSR in France
• The emergence of CSR in France is the result of the
consequences of globalization and the influence of
foreign corporations as well as the successful
development of the French socially responsible
investment (SRI) market.
• The development of the SRI market is reflected in
the strong growth in SRI assets under management
(AuM) and mandates in France, increasing from
€3.9 billion in 2003 to €169.7 billion in 2013.