CORPORATE SOCIAL RESPONSIBNILITY

Corporate social responsibility (CSR) is a self-regulating business

model that helps a company be socially accountable—to itself, its
stakeholders, and the public. By practicing corporate social
responsibility, also called corporate citizenship, companies can be
conscious of the kind of impact they are having on all aspects of
society, including economic, social, and environmental.

To engage in CSR means that, in the ordinary course of business,

a company is operating in ways that enhance society and the
environment, instead of contributing negatively to them.

Understanding Corporate Social Responsibility (CSR)

Corporate social responsibility is a broad concept that can take
many forms depending on the company and industry. Through
CSR programs, philanthropy, and volunteer efforts, businesses
can benefit society while boosting their brands.

As important as CSR is for the community, it is equally valuable

for a company. CSR activities can help forge a stronger bond
between employees and corporations, boost morale and help
both employees and employers feel more connected with the
world around them.

For a company to be socially responsible, it first needs to be

accountable to itself and its shareholders. Often, companies that
adopt CSR programs have grown their business to the point
where they can give back to society. Thus, CSR is primarily a
strategy of large corporations. Also, the more visible and
successful a corporation is, the more responsibility it has to
set standards of ethical behavior for its peers, competition, and
industry.
Examples of Corporate Social Responsibility in Action
Corporate social responsibility comes in many forms. Even the
smallest company impacts social change by making a simple
donation to a local food bank. Some of the most common
examples of CSR include:

 Reducing carbon footprints

 Improving labor policies
 Participating in fairtrade
 Charitable giving
 Volunteering in the community
 Corporate policies that benefit the environment
 Socially and environmentally conscious investments

Changing Corporate Social Responsibility Trends

Activism by millennials and all generations will also influence
changing trends in CSR. You can expect to see companies taking
a public stand against on-the-job harassment and discrimination
thanks to the #metoo movement. Diversity in the workplace will
continue to expand embracing people of all races, genders,
cultures, disabilities, and sexual orientations.

Companies will also find their own voices to speak out against
social injustice and policy changes that will negatively impact the
environment. Even policies to protect privacy can become part of
the CSR trends we will see as more and more data breaches
threaten personal information. 
Brands Doing it Right

1. Innovation: Johnson & Johnson

An excellent example of CSR is global giant Johnson & Johnson.

They have focused on reducing their impact on the planet for
three decades. Their initiatives range from leveraging the power
of the wind to providing safe water to communities around the
world. Its purchase of a privately-owned energy supplier in the
Texas Panhandle allowed the company to reduce pollution while
providing a renewable, economical alternative to electricity. The
company continues to seek out renewable energy options with the
goal to procure 35% of their energy needs from renewable
sources.

2. Google

Google is trusted not only for its environmentally friendly initiatives

but also due to their outspoken CEO Sundar Pichai. He stands up
against social issues including President Donald Trump’s anti-
Muslim comments. Google also earned RI’s highest CSR score
much in part due to their data center using 50% less energy than
others in the world. They also have committed over $1 billion to
renewable energy projects and enable other businesses to reduce
their environmental impact through services such as Gmail.

3. Coca-Cola

Coca-Cola’s massive fleet of delivery trucks contributed 3.7

million metric tons of greenhouse gases to the world. They have
made major changes to their supply chain practices including
investing in new alternatively fueled trucks. Their initiatives are
intended to create a 25% reduction in their carbon footprint by
2020.

4. Ford Motor Company

Ford plans to reduce their greenhouse gas emissions using their
EcoBoost engine to increase fuel efficiency. It also plans to
introduce 40 electrified vehicles (electric and hybrid) by 2022, in
an investment of $11 billion. According to Ford: “We’re all in on
this and we’re taking our mainstream vehicles, our most iconic
vehicles, and we’re electrifying them. If we want to be successful
with electrification, we have to do it with vehicles that are already
popular.”

In addition, American Ford dealerships rely on wind sail and solar

PV systems to power their locations greatly reducing their use of
electricity.

5 & 6. Netflix & Spotify

From a social perspective, companies such as Netflix and Spotify

offer benefits to support their employees and families. Netflix
offers 52 weeks of paid parental leave, which can be taken at any
time whether it is the first year of the child's life or another time
that suits their needs. This compares to 18 weeks at other tech
companies. 

Spotify offers a similar program, although for a shorter duration of

24 weeks of paid leave.

7. Starbucks

With an eye to hiring, Starbucks is looking to diversify their

workforce and provide opportunities for certain cohorts. By 2025 it
has pledged hire 25,000 veterans by 2025 as part of their socially
responsible efforts. This hiring initiative will also look to hire more
younger people with the aim of "helping jump-start careers by
giving them their first job'. While globally the company has joined
with the UN Refugee Agency to scale up the company’s support
and efforts to reach refugee candidates to hire 10,000 refugees
by 2022.
TYPES OF CORPORATE SOCIAL
RESPONSIBILITY
Corporate social responsibility is traditionally broken into four
categories: environmental, philanthropic, ethical, and economic
responsibility.

1. Environmental Responsibility
Environmental responsibility refers to the belief that organizations
should behave in as environmentally friendly a way as possible. It’s one
of the most common forms of corporate social responsibility. Some
companies use the term “environmental stewardship” to refer to such
initiatives.

Companies that seek to embrace environmental responsibility can do so

in several ways:

 Reducing pollution, greenhouse gas emissions, the use of single-

use plastics, water consumption, and general waste
 Increasing reliance on renewable energy, sustainable resources,
and recycled or partially recycled materials
 Offsetting negative environmental impact; for example, by
planting trees, funding research, and donating to related causes

2. Ethical Responsibility
Ethical responsibility is concerned with ensuring an organization is
operating in a fair and ethical manner. Organizations that embrace
ethical responsibility aim to achieve fair treatment of all stakeholders,
including leadership, investors, employees, suppliers, and customers.

Firms can embrace ethical responsibility in different ways. For example,

a business might set its own, higher minimum wage if the one mandated
by the state or federal government doesn’t constitute a “livable wage.”
Likewise, a business might require that products, ingredients, materials,
or components be sourced according to free trade standards. In this
regard, many firms have processes to ensure they’re not purchasing
products resulting from slavery or child labor.

3. Philanthropic Responsibility
Philanthropic responsibility refers to a business’s aim to actively make
the world and society a better place.

In addition to acting as ethically and environmentally friendly as

possible, organizations driven by philanthropic responsibility often
dedicate a portion of their earnings. While many firms donate to
charities and nonprofits that align with their guiding missions, others
donate to worthy causes that don’t directly relate to their business.
Others go so far as to create their own charitable trust or organization to
give back.

4. Economic Responsibility

Economic responsibility is the practice of a firm backing all of

its financial decisions in its commitment to do good in the areas
listed above. The end goal is not to simply maximize profits

Benefits of corporate social responsiblity for

businesses
The potential benefits of CSR to companies include:

 better brand recognition

 positive business reputation
 increased sales and customer loyalty
 operational costs savings
 better financial performance
  greater ability to attract talent and retain staff
 organisational growth
 easier access to capital
Responsible business reputation
Corporate social investment can help you to build a reputation as
a responsible business, which can, in turn, lead to competitive
advantage.
Companies often favour suppliers who have responsible policies,
since this can reflect on how their customers see them. Some
customers don't just prefer to deal with responsible companies -
they insist on it.
Costs savings
By reducing resource use, waste and emissions, you can help the
environment and save money too. With a few simple steps, you
may be able to lower your utility bills and achieve savings for your
business. See how to reduce your business waste to save
money.
Finding and keeping talented staff
Being a responsible, sustainable business may make it easier to
recruit new employees or retain existing ones. Employees may be
motivated to stay longer, thus reducing the costs and disruption of
recruitment and retraining.
Other benefits of CSR
By acting in a sustainable, responsible way, you may also find it
easier to:

 access finance - investors are more likely to back a

reputable business
 attract positive media attention - eg when taking part in
community activities
  reduce regulatory burden - good relationships with local
authorities can often make doing business easier
 identify new business opportunities - eg for the
development of new products or services
but positively impact the environment, people, and society.

ADVANTAGES AND DISADVANTAGES OF

CSR
Advantage: Profitability and Value

A CSR policy improves company profitability and value. The

introduction of energy efficiencies and waste recycling cuts
operational costs and benefits the environment. CSR also
increases company accountability and its transparency with
investment analysts and the media, shareholders and local
communities. This in turn enhances its reputation among
investors such as mutual funds that integrate CSR into their
stock selection. The result is a virtuous circle where the
company's stock value increases and its access to investment
capital is eased.

Advantage: Better Customer Relations

A majority of consumers – 77 percent according to a survey by

branding company Landor Associates cited by the University of
Pennsylvania's Wharton School – think that companies should
be socially responsible. Consumers are drawn to those
companies that have a reputation of being a good corporate
citizen. Research at Tilburg University in the Netherlands
showed that consumers are prepared to pay a 10 percent higher
price for products they deem to be socially responsible.

Disadvantage: CSR Costs Money to Implement

The main disadvantage of CSR is that its costs fall
disproportionally on small businesses. Major corporations can
afford to allocate a budget to CSR reporting, but this is not
always open to smaller businesses with between 10 and 200
employees. A small business can use social media to
communicate its CSR policy to customers and the local
community. But it takes time to monitor exchanges and could
involve hiring extra personnel that the business may not be able
to afford.

Disadvantage: Conflicts with the Profit Motive

Even for larger companies, the cost of CSR can be an obstacle.

Some critics believe that corporate social responsibility can be
an exercise in futility. A company's management has a fiduciary
duty to its shareholders, and CSR directly opposes this, since
the responsibility of executives to shareholders is to maximize
profits. A manager who forsakes profits in favor of some benefits
to society may expect to lose his job and be replaced by
someone for whom profits are a priority. This view led Nobel-
Prize winning economist Milton Friedman to write a classic article
with the title: "The Social Responsibility Of Business Is to
Increase Its Profits."

Disadvantage: Consumers are Wise to Greenwashing

Greenwashing is term used to describe corporate practices that

appear to be environmentally responsible without actually
representing a change in how a company conducts its business.
For example, a product may be labelled as "All Natural", even
though it is being manufactured just as it always has. Some dry
cleaning services label their operations as "Organic" which
sounds similar to "organic food" but really carries no specific
meaning. Some customers may react positively to these types of
claims, but others are wary of corporate greenwashing.
Creating a strong business and building a
better world are not conflicting goals - they
are both essential ingredients for long-term
success

- BILL FORD