Definition of Corporate Social Responsibility

Defining Corporate Social Responsibility (hereinafter also CSR) has not been and will not be an easy task as there the most likely will not be a generally agreed definition. There seems to be an infinite number of definitions of CSR, ranging from the simplistic to the complex ones, and a range of associated terms and ideas. In some cases the definition has been distorted by researchers so much that the concept becomes morally vacuous, conceptually meaningless, and utterly unrecognizable or CSR may be regarded as the panacea, which will solve the global poverty gap, social exclusion and environmental degradation. [6]

One of the key challenges in studying and implementing responsible business practices has been the lack of commonly agreed definition of CSR. The term CSR is often used interchangeably with others, including corporate responsibility, corporate citizenship, business in society, social enterprise, sustainability, sustainable development, triple bottom line, societal value-added, strategic philanthropy, corporate ethics, and in some cases also corporate governance. [7] There are also clear links between these terms and those relating to socially responsible investments, community investing, social capital, and collaborative governance. In the business community, CSR is alternatively referred to as corporate citizenship, which essentially means that a company should be a “good neighbor” within its host community. The experts in each of these areas can offer sound reasons, why their term is different from the others. However, it is not within the scope of this dissertation to review all these different definitions and their mutual connections, but to provide a summarized opinion on CSR’s definition and its “synonyms”. A solid ground for a modern definition of CSR can provide the United Nations Global Compact's ten principles in the areas of human rights, labor, the environment and anti-corruption. These principles enjoy universal consensus and basically have been derived from the Universal Declaration of Human Rights, the International Labor Organization's Declaration on Fundamental Principles and Rights at Work, the Rio Declaration on Environment and Development, [8] and the United Nations Convention against Corruption. The Global Compact asks companies to embrace, support and enact, within their sphere of influence, a set of following core values in the following areas:

Human Rights:

Ø Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights; and

Ø Principle 2: make sure that they are not complicit in human rights abuses.

Labor Standards:

Ø Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining;

Ø Principle 4: the elimination of all forms of forced and compulsory labor;

Ø Principle 5: the effective abolition of child labor; and

Ø Principle 6: the elimination of discrimination in respect of employment and occupation.

The Environment:

Ø Principle 7: Businesses should support a precautionary approach to environmental challenges;

Ø Principle 8: undertake initiatives to promote greater environmental responsibility; and

Ø Principle 9: encourage the development and diffusion of environmentally friendly technologies.

Anti-Corruption:

Ø Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery. [9]

Often quoted definition of CSR provides Philip Kotler. In his view, “CSR is a commitment to improve community well-being through discretionary business practices and contributions of corporate resources”. [10] A key element in his definition is the word discretionary, which refers to a voluntary commitment a business makes in choosing and implementing socially and environmentally responsible practices and making contributions. The term community well-being, according to Kotler, includes human conditions as well as environmental issues. Kotler also uses the term corporate social initiatives to describe efforts under the CSR umbrella and offers the following definition: “Corporate social initiatives are major activities undertaken by a corporation to support social causes and to fulfil commitments to corporate social responsibility”.

Causes that can be supported through these initiatives are those that contribute to:

a) community health, safety, education, and employment;

b) the environment;

c) Community and economic development and other basic human needs.

Sir Geoffrey Chandler, a former Shell executive, defined CSR as “transparent business practices that are based on ethical values, compliance with legal requirements, and respect for people, communities, and the environment.”[11]

Thus, beyond making profits, companies are responsible for the totality of their impact on people and the planet. People in Chandler’s definition constitute the company’s stakeholders.

The International Labor Organization (ILO) described on its website CSR as “a way in which enterprises give consideration to the impact of their operations on society and affirm their principles and values both in their own internal methods and processes and in their interaction with other actors” and further specified CSR as “a voluntary, enterprise-driven initiative, which refers to activities that are considered to exceed compliance with law”. [12]

The European Union drew up its own definition of CSR. The Green Paper of the European Commission published in 2001 provides basically two definitions of CSR. In the introduction it is stated that “corporate social responsibility is essentially a concept whereby companies decide voluntarily to contribute to a better society and a cleaner environment”. Further in the Paper CSR is described as “a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis”. [13]

Whereas moral philosophers such as for instance Scot David Hume, Immanuel Kant, A. J. Ayer tend to approach term responsibility as a quality of human conduct, the EU´s concept of CSR can be understood as an attempt to reconcile the freedom of companies with the quest for social, economic and environmental welfare. This approach is supposed to contribute to sustainable development as defined by the Brundtland Commission.

In European perspective CSR strengthens mutual trust and confidence between business and society. The relationship between both can be qualified as a symbiotic. Moreover, being socially responsible means not only fulfilling legal expectations, but also going beyond compliance and investing more into human capital, the environment and the relations with stakeholders. [14]

The European approach finds ground in real life. The experience with investment in environmentally responsible technologies and business practice has suggested that going beyond legal compliance can contribute to companies’ competitiveness. Going beyond basic legal obligations in the social area, e.g. training, working conditions, management-employee relations, can also have a direct impact on productivity. It opens a way of managing change and of reconciling social development with improved competitiveness. Nevertheless, CSR should not be seen as a substitute to regulation or legislation concerning social rights or environmental standards, including the development of new and appropriate legislation.

Closely related to corporate social responsibility and often quoted as its final objective is the idea of sustainable development. The principle of sustainable development isn’t too old. In 1987 the Brundtland Commission [15] offered its initial definition of “Sustainable Development”, which is: "Development that meets the needs of the present, without compromising the ability of future generations to meet their needs." [16] In general terms, sustainable development refers to large global problems, like population control, global climate change, pollution of the environment, water shortage, and human rights issues. Essentially, it's about systems and limits. Sustainability in the corporate context refers to what corporations can contribute to solving these global problems. And one of the most important means that a company can utilize in fighting global issues and directing company to sustainable development is CSR concept.

Shortly after the idea of sustainable development became more rooted in the business environment, the idea of sustainable growth has emerged. Today business world does not speak about quantitative or qualitative growth, but rather about sustainable growth. Let’s quote Chad Holliday’s, former Chairman and CEO of DuPont Corporation, definition of sustainable growth: “As we think about the new century, we have determined that our central focus must be on sustainable growth. By this I mean, we must create both shareholder and societal value while we reduce our environmental footprint. And, this must be viewed along the entire value chains in which we operate. Sustainable growth is our operational definition of sustainable development. However, we believe business growth is every bit as essential in this equation as is sustainability. In the 21st century, we will not have one without the other. Economic growth will remain a central element of successful corporations and successful societies, but the environmental aspect of growth in the future must be different than in the past.” [17]

Anthony Corsano, holder of the Ernst & Young Metro New York Entrepreneur of the Year 2008 Award, sees corporate responsibility in part of every business decision the company makes. Corsano argues, “Whether it’s analyzing energy consumption to reduce carbon footprint, or simply improving the communities in which employees work, behaving like a good corporate citizen is critical to creating a sustainable business model”. Regarding benefits, he adds: “It saves money, it engenders employee loyalty, it attracts better employees and in every way it makes us a better business.” [18] According to Corsano, business managers have to include into their decision-making process CSR aspects as well in order to make their business sustainable, i.e. survive in constantly changing, developing and sometimes hostile business environment.

Some authors use instead of the term Corporate Social Responsibility the collocation “triple bottom line” to describe CSR from a broader perspective. However, in my opinion and in opinion of other authors, the phrase triple bottom line relates more or less to reporting only than to the whole CSR agenda. According to John Elkington, author of the book Cannibals With Forks and the inventor of the term, “triple bottom line” (or in other words "People, Planet, Profit") captures an expanded spectrum of values and criteria for measuring organizational (and societal) success: economic, environmental and social. In practical terms, triple bottom line accounting means expanding the traditional reporting framework to take into account environmental and social performance in addition to financial performance. [19]

Date: 2016-05-16; view: 487; Нарушение авторских прав