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EU ROPEAN AN D SOCIAL POLICY DIVISION

CORPORATE SOCIAL RESPONSIBILITY

IBEC

the Irish Business and Employers Confederation

table of contents

FOREWORD ........................................................................................1 1. INTRODUCTION ........................................................................................2 2. EVOLUTION OF CSR.................................................................................4 International activities ..................................................................4 1940s-1960s .....................................................................................4 1960s-1970s......................................................................................4 1980s ..................................................................................................5 1990s ..................................................................................................5 21st Century......................................................................................6 European Activities ........................................................................6 European Commission...................................................................7 European Multi-Stakeholder Forum (EMF) ..............................8 3. WHAT IS CORPORATE SOCIAL RESPONSIBILITY?..............................9 Defining CSR ....................................................................................9 Principles of CSR............................................................................10 Individual components of CSR ..................................................10 4. BUSINESS CASE FOR CORPORATE SOCIAL RESPONSIBILITY .......12 Corporate Governance .................................................................12 Competitive Advantage ...............................................................13 Corporate Reputation ...................................................................13 Investment ......................................................................................13 Improving Relationships with Stakeholders ..........................13 Cost/Benefit Analysis...................................................................14 Positive Public Image....................................................................14 5. INTERNATIONAL INSTRUMENTS AND INITIATIVES ON CSR........15 Governmental and intergovernmental initiatives................15 Business-led initiatives ................................................................18 NGO-led initiatives ......................................................................20 6. CSR CASE STUDIES .......................................................................23 IBM Ireland .....................................................................................23 Vodafone Ireland...........................................................................25 INTEL Ireland ..................................................................................27 Allianz Ireland................................................................................29 7. CONCLUSION.................................................................................31 8. GLOSSARY OF TERMS...................................................................32 9. BIBLIOGRAPHY.............................................................................33

Report Author: Catherine Maguire Social Policy Executive European & Social Policy Division Telephone: (01) 605 1692 Email: catherine.maguire@ibec.ie Web: www.ibec.ie

Information Restriction: This information is issued for information purposes only and is restricted to staff of IBEC and to persons in member companies authorised to receive same. Except for normal review purposes, no part of this report may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage or retrieval system without the prior permission of the publishers. Copyright IBEC.

CORPORATE SOCIAL RESPONSI BI LITY

FOREWORD

Corporate Social responsibility or CSR as it is known is an important issue for modern business. The rapid growth of globalisation and the development of more multi-cultural societies means that the business environment has changed for everyone. This change brings with it new challenges for companies of every size and sector. One of the challenges for Irish business is to understand what CSR is and what it means for them. There are a range of reports, standards, recommendations and norms published throughout the world and the various buzz words and acronyms cause intense confusion. In this publication IBEC seeks to explain in a clear and unambiguous way what CSR is, where it has come from and to give some practical Irish examples of good practice in the area. We also explain the various initiatives and where they fit in. We know that many Irish businesses are engaged in CSR activities, some without using the CSR label. The CSR concept is a formalisation of social, environmental and ethical practice. Through such a formalisation many companies are actively communicating to shareholders, Government, customers, employees and the broader community about their business values and about how they are contributing to society as a whole. There is no universal definition of CSR but there is general acceptance that it involves voluntary initiatives and activities by business. The flexibility of CSR is one of its most attractive features meaning that it can be adapted to suit individual company size or sector. Responsible Business is one of IBEC's top policy priorities in our Strategy 2002 - 2005. CSR has an important role to play in promoting responsible business and we hope that this publication will be of practical assistance to companies, to stimulate the CSR debate in their business and to help them in devising a suitable strategy to achieve their aims. The CSR debate will continue, here in Ireland, at European level and Internationally too through the various institutions currently taking an active interest in this topic. It is important for Irish business to be informed and to participate fully in these debates. I would like to say a special thank you for the important contribution made to this report by IBEC's CSR Working Group and also to Vodafone, Allianz, IBM and Intel who kindly assisted us by providing interesting case studies which give us some practical insights into their approach to CSR.

Maria Cronin IBEC Director of EU and Social Policy

CORPORATE SOCIAL RESPONSI BI LITY

1. INTRODUCTION

Modern business and employers are facing a new range of challenges that require a creative response. Globalisation, trade liberalisation, regulatory reform, labour and supply chain issues among other things, have created new demands by investors, shareholders, employees, consumers, the public and Governments on business. Increasingly, the media spotlight is focusing on social, environmental and ethical practices and policies, and companies are being asked about their contributions towards a better society. Many businesses have recognised the need to communicate and promote the range of good work that is underway, often on an informal basis. While CSR has mainly emerged as a modern business response to contemporary issues, it actually has its foundations in the paternalistic firms of the 18th and 19th centuries. The Quaker Lead Company in the UK in the 18th century and the Guinness Brewery in Ireland in the 19th century both introduced initiatives with a strong focus on social responsibility. The Guinness Brewery provided housing and healthcare to workers and purchased and developed land for sports and social activities. The Quaker Lead Company also built accommodation for its employees, built schools and libraries for their families, and used water pumps to recycle water as part of its industrial processes (The Economist, 2002). While these initiatives were strongly influenced by the religious and ethical ethos of those periods, they are still some of the drivers behind CSR today. This is evident in the development of CSR instruments by religious groups and other non-governmental organisations (NGOs) (See Section 5 on International

Instruments). Nonetheless, the European Commission (2002) is of the view that there is a distinguishing feature between modern CSR and historical CSR. The Commission identifies this feature as the attempt to manage CSR strategically and the development of instruments for verification and certification. In seeking to adopt a practical, strategic and systematic approach to CSR, leading companies are invariably faced with a number of management challenges. Sadler (2001, p448) summarises the challenges thus: creating a clearly articulated statement of business principles or code of conduct. Such a document can often provide the starting point in demonstrating accountability; identifying the organisations key legitimate stakeholders and properly understanding their concerns; protecting or enhancing the companys reputation with these stakeholder groups; understanding the nature and scale of the companys economic, social and environmental impact without investing a disproportionate level of resources in the exercise, or diverting attention away from mainstream corporate performance targets; developing policies and processes that enable the company to assess and manage its social and environmental impact in a way that is integrated into day-to-day management responsibilities; ensuring the companys contractors, suppliers

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and supply chains operate to the same standards as those the organisation imposes upon itself; developing measurement systems to monitor and report on the companys performance against relevant CSR objectives; and ensuring the company is not inadvertently exposing itself to risk through the poor management of environmental or social issues Business in the Community UK (2004, p4) identified other challenges, such as redundancy and human rights, ranging from:how companies should behave when making people redundant to whether they should enter markets in countries that have poor human-rights records. These are just some of the topics that arise in any debate on CSR. If a company decides to formalise an existing practice or to commence a new initiative there is also the eventual challenge of developing its own standard of performance or choosing between the plethora of tools and initiatives that are available (see Section 5 for further information on initiatives). Given the wide variety of issues involved in CSR, this report aims to provide the reader with a clear picture of what is involved. The subject is introduced through a description of the evolution of CSR and a history of the activities in this area over the past 64 years, with a particular and practical focus on the most recent developments. The principles that provide a basic understanding of CSR and its individual aspects are presented in Section Three. Section Four examines the business case for CSR and a compendium of 25 CSR instruments and initiatives are explained in Section Five. A variety of Irish and international case studies are provided in Section Six, and conclusions drawn from the report are presented in Section Seven. Finally, Section Eight provides the reader with a glossary of terms.

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2. EVOLUTION OF CSR

international activities
As previously mentioned, the origins of CSR can be traced back to the practices of paternalistic firms operating in the 18th and 19th centuries. These earlier forms of CSR were, in the main, nationally inspired and did not generally incorporate transnational activities. The international dimensions of activities inspiring modern CSR did not truly emerge until the globalisation of business in the 20th century. As the main driving force behind the creation of modern CSR, globalisation created new cross-boundary business structures and operations, increased the power held by business and consequently created an international impetus for the creation of new order in areas such as labour, the environment, economics, the community, finance and trade.

today, created a series of guidelines for businesses and governments to observe, and created a framework for the emergence of NGOs. The ISO (2004, p7) also suggests that the concept of CSR has become more prominent as a result of the fact that the above objectives have not yet been achieved.

1960s-1970s
During the 1960s and 1970s, public concern increased about the long-term effects of pollution on the environment and the activities of international corporations in foreign countries. Friends of the Earth, Greenpeace, World Wildlife Fund and Amnesty International, among other environmental and social NGOs, were founded to campaign against environmental degradation and the abuse of human rights, and to lobby governments and business to take action on these issues. These organisations played an instrumental role in the development of legislation, standards and the promotion of social, environmental, economic and other CSR-related issues (ISO, 2004). Governments responded to the NGO campaigns and, in addition to national activities, in 1972 a UN environment programme was established following a conference on the human environment. A number of environmental treaties were also developed. The alleged abuse of human rights by some multinational companies operating in developing countries started to attract increasing attention from the media and the general public during this period. While governments put pressure on abusing regimes, parent companies either individually, or in

1940s-1960s
Following World War 2, governments around the world agreed that there was a need for international institutions to be established to create a new type of international order.(ISO, 2004, p5) The International Labour Organisation (ILO), the United Nations (UN), the International Monetary Fund (IMF), the World Trade Organisation (WTO) and the International Organisation for Standardisation (ISO) were all established to realise this goal. The establishment of these institutions formed an infrastructure for global rule-making through which modern CSR emerged (ISO, 2004, p7). The goals set by these institutions with regard to human rights, economics, poverty, social dialogue, environmental protection, democracy and trade liberalisation, many of which still apply

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conjunction with other companies, began to proactively address this issue. One of the first joint business activities was the endorsement of the Global Sullivan Principles by a number of companies who wanted to adopt a stance against the South African apartheid regime (See Section Five for further information on these principles). In addition to heightened awareness amongst the public regarding the environmental and human rights practices and activities of multinationals, the ability of some of these large companies to influence the landscape within which they operated became a cause for concern. The OECD Guidelines for Multinational Enterprises in 1976 and the universally applicable ILO Tripartite Declaration concerning Multinational Enterprises and Social Policy in 1977 emerged as a result of this development.

emerged alongside the development of these policies. Also during this period, individual aspects of CSR started to be treated on a collective basis and the concepts of corporate ethics and reporting emerged as a result.

1990s
During the 1990s CSR continued to evolve. Increased attention was given to the CSR-related concepts of sustainable development, corporate ethics and fair trade. CSR also emerged as a concept within its own right. Governments organised a series of world meetings and conferences to examine this new concept. This led to the establishment of a range of working groups, committees, research teams and in some cases, international laws, agreements and declarations. For example, conventions and a Business Council for Sustainable Development emerged as a result of the UN Earth Summit in 1992, and governments pledged to work for full employment, with quality jobs and respect for the relevant ILO Conventions (ISO, 2004, p12) at the UN World Summit for Social Development in 1995. The Fourth World Conference on Women, also in 1995, adopted declarations and action plans that called upon business to address specific social problems.

1980s
The 1980s saw the continued development of new CSR concepts, a surge in activities relating to CSR and consumer boycotts of certain milk substitute and petrol products. Alongside this, foreign direct investment (FDI) and the environment became more prominent with the emergence of concepts such as sustainable development (ie, environment, economic and social issues) and corporate ethics. In 1981 the UN Environmental Programme (UNEP), the International Union for Conservation of Nature and Natural Resources (IUCN) and the WWF published the World Conservation Strategy that established the first principles and guidelines for conservation and sustainable development. (This was followed in 1991 by Caring for the Earth which set a blueprint for implementation of the World Conservation Strategy) (ISO, 2004). In 1982, the United Nations Charter for Nature was passed and in 1987, a UN Montreal protocol to phase out the use of ozone depleting chemicals was signed by 24 countries. In addition, the UN Brundtland Commission published its report during this period, Our Common Future, which developed significant interest in the new concept of sustainable development. As international competition for FDI increased in the 1980s, the World Bank encouraged all countries to develop policies in this area as well as on privatisation, deregulation, and trade liberalisation (ISO, 2004). Socially responsible business practices

Corporate ethics emerged as a mainstream business issue in the 1990s for two main reasons. Firstly, NGOs and the public made increasing demands on business for greater accountability and transparency of practices. Secondly, stringent legislation in the form of statutory corporate governance standards was implemented as a direct response to a number of very high profile corporate scandals in the US. In addition to the statutory standards, supplemental voluntary standards, such as the Global Reporting Initiative (GRI), were developed by a group of companies and institutions.

The purpose of the standard was to develop and disseminate globally applicable sustainability guidelines for reporting on the economic, environmental and social dimensions of activities, products or services (See Section Five for further information on this initiative).

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A range of other tools, codes and standards on every aspect of CSR were also produced during this period by business groups, governments and newly established NGOs (see Section Five). As interest in fair trade grew, the Ethical Trading Initiative, the Fair Labour Association, Social Accountability International and the Fair Trade Labelling Organisation were set up. Pressure was put on business during this period to prove that it was acting responsibility by endorsing and committing itself to various codes and standards. New partnerships and dialogue between companies and their stakeholders were also developed during this period and that helped in the exchange of new ideas.

european activities
While CSR continues to evolve and gather momentum internationally, the Lisbon Summit proved to be the starting point for the EU debate on CSR. The Manifesto of Enterprises against Social Exclusion launched by the President of the European Commission, Jacques Delors, and a group of European companies in 1995 was the first European-level activity relating directly to CSR. A European Business Network called CSR Europe was created on foot of this and was charged with the promotion of business-to-business dialogue and exchange of best practices on CSR-related issues. CSR was then put at the top of the political agenda in 2000 at the European Council in Lisbon. EU Heads of State and government made a special appeal to companies sense of social responsibility regarding best practices for lifelong learning, work organisation, equal opportunities, social exclusion and sustainable development. European companies reacted by acknowledging their social responsibility in a position paper by the European employers body, UNICE, which was released later on that year. Entitled Releasing Europes Employment Potential: Companies views on European Social Policy beyond 2000, the paper stressed that European companies see themselves as an integral part of society, and while they consider profits to be the main goal of the company, it is not its only raison dtre. The role of CSR in addressing the employment and social consequences of economic and market integration and in adapting working conditions to the new economy was emphasised at the European Council in Nice. In 2001, the role of government in the CSR debate was alluded to by the European Council in Goteborg. The Council referred to the involvement of public authorities in the Sustainable Development Strategy for Europe as (having) a key role in encouraging a framework to ensure that businesses integrate environmental and social considerations into their activities Business should be encouraged to take a proactive approach to sustainable development in their operations both within the EU and elsewhere.(EU Commission, 2001, p6) In addition, in the Commissions reflections on the White Paper on Governance in the European Union, they stated that Corporate Social Responsibility has important implications for all economic and social actors as well as for the public authorities, who should take them into account in determining their own actions. (EU Commission, 2001)
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21st century
Today, as CSR is becoming recognised as a mainstream business issue, more tools, codes and standards continue to be developed. In July 2000, the UN Global Compact was launched as a voluntary corporate citizenship initiative for business to embrace, support and enact a set of core values in the areas of human rights, labour standards and environmental practices. Also in 2000, the ILO published a revision of its Tripartite Declaration of Principles concerning Multinational organisations and Social Policy, and the OECD completed a revision of its Guidelines for Multinational Enterprises. The UN Sub-Commission on the Promotion and Protection of Human Rights established a working group that produced text for Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to Human Rights in 2004. This is currently under consideration and the Office of the High Commissioner for Human Rights is consulting with all relevant parties. A report will be presented to the Commission in the 2005 session. Finally, in relation to the development of modern CSR, the importance of the role of the private sector in contributing to sustainable development was emphasised at the UN World Summit on Sustainable Development. Also, in the summer of 2004, the ISO decided to develop a guidance document on social responsibility (See Section Five for more information on these tools).

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european commission
In response to the calls for action, the EU produced a Green Paper in 2001 called Promoting a European Framework for Corporate Social Responsibility. The paper was drawn up to encourage discussion and views from all the main stakeholders about how to build a partnership for the development of a new framework for the promotion of corporate social responsibility. (EU Commission, 2001, p24) The Commission received more than 250 responses but significant differences were expressed. They were as follows (EU Commission, 2002, p5): Enterprises stressed the voluntary nature of CSR, its integration in the sustainable development context and that its content should be developed at global level. Enterprises emphasised there would not be one-size-fits-all solutions. In the view of businesses, attempts to regulate CSR at EU level would be counterproductive, because this would stifle creativity and innovation among enterprises which drive the successful development of CSR, and could lead to conflicting priorities for enterprises operating in different geographical areas. Trade unions and civil society organisations emphasised that voluntary initiatives are not sufficient to protect workers and citizens rights. They advocated a regulatory framework establishing minimum standards and ensuring a level playing field. They also insisted that in order to be credible, CSR practices could not be developed, implemented and evaluated unilaterally by businesses, but rather with the involvement of relevant stakeholders. They also asked for effective mechanisms to ensure a companys accountability for its social and environmental impact. Investors stressed the need to improve disclosure and transparency of companies practices, rating agencies methodology and investment management of SRI (socially responsible investment) funds and pension funds. Consumers organisations underlined the importance of trustworthy and complete information about the ethical, social and environmental conditions in which goods and services are produced and traded to guide them in their purchase choices.

The European Council, in its Resolution of 3 December 2001, stressed that a European approach to CSR could complement existing measures at local and national level, imparting to them an added value, in order to contribute to the development of CSR. The Council mentioned that CSR can contribute not only to encouraging a high level of social cohesion, environmental protection and respect for fundamental rights, but also to improving competitiveness in all types of business, from SMEs to multinationals, and in all sectors of activity. The Economic and Social Committee highlighted that the principles of voluntary action and environmental, economic and social sustainability, together with guidance from international organisations existing agreements should form a point of reference for further European initiatives in support of companies efforts to act in a socially responsible way. The Committee of the Regions saw the possibility of providing a framework for raising awareness, promoting responsible principles and assisting businesses and public authorities in incorporating CSR in their activities at European level. The European Parliament proposed to mainstream CSR in all areas of EU competence, in particular regional and social funding, and to create an EU, multi-stakeholder CSR platform. It called for triple bottom line reporting by companies on their social and environmental performance. In 2002, the Commission presented an EU strategy to promote CSR, following on the Green Paper produced in the previous year. Taking all relevant views into account the Commission proposed to build its strategy around six principles: 1. recognition of the voluntary nature of CSR; 2. the need for credibility and transparency of CSR practices; 3. a focus on activities where community involvement adds value; 4. a balanced and comprehensive approach to CSR, including economic, social and environmental issues as well as consumer interests; 5. attention to the needs and characteristics of SMEs; 6. support and compatibility with existing international agreements and instruments (ILO core labour standards, OECD guidelines for multinational enterprises etc.).

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There was a general consensus that the EU should develop a coherent, balanced and flexible approach to CSR, encompassing all the relevant issues. There was also agreement that the approach the Commission took should concentrate on building on existing initiatives, act as a catalyst for disseminating information (awareness raising, exchange of good practices, research etc), promote transparency (through disclosure policies) and credibility of CSR practices. In addition, there was a general consensus that dialogue between companies and stakeholders should be encouraged, and CSR should be integrated into all EU policies. In addition EU policies should encourage CSR which should be used to promote fundamental human and social rights in third world countries, notably through international organisations such as the ILO, OECD and also the WTO. The launch of a Multi-Stakeholder Forum on CSR at the EU level was one of the main commitments made by the Commission to achieve its strategic goals. This commitment was made as the Commission was of the view that the involvement of all affected stakeholders is key to ensuring acceptance and credibility of CSR and better compliance with its principles.(EU Commission, 2002, p22)

instruments such as OECD Guidelines for Multinational Enterprises, Council of Europe Social Charter, ILO core labour conventions and the International Bill of Human Rights. The Forum comprised the social partners, business networks and NGOs. Other EU institutions, in addition to some other organisations active in the field of CSR, attended with observer status. The European Commission chaired the Forum. A co-ordination committee with representatives from ETUC (European Trade Union), UNICE, CSR Europe, Green GB and NGOs co-ordinated the work of the European Multi-Stakeholder Forum. They also established and participated in working groups for four thematic roundtables (see below), and negotiated the final Forum Report. IBEC tracked this development and participated in a UNICE CSR Working Group which was established to gather the viewpoints of all business organisations around Europe about CSR and the discussions in the Forum. This objective was achieved through four roundtables, which focused on four key themes1: 1. improving knowledge of CSR; 2. fostering CSR among SMEs; 3. diversity, convergence and transparency of CSR practices and tools; 4. development aspects of CSR. The roundtables completed their work in April 2004 and each produced a report summarising its activities. A final forum report containing the results and recommendations of the EMF as well as the outcomes from each individual roundtable was submitted to the Commission at the end of June 2004. The EMF concluded the report by inviting the Commission together with stakeholders, to convene an initial shared review in two years time of progress made in relation to the Forums recommendations, and of the trends, developments and innovations in CSR. (EMF, 2004, p18)

european multistakeholder forum (emf)


The EMF was launch in October 2002 and it was charged by the Commission to foster corporate social responsibility, the CSR EMF shall promote innovation, transparency and convergence of CSR practices and instruments through: Improving knowledge about the relationship between CSR and sustainable development (including its impact on competitiveness, social cohesion and environmental protection) by facilitating the exchange of experience and good practices and bringing together existing CSR instruments and initiatives, with a special emphasis on SME specific aspects; Exploring the appropriateness of establishing common guiding principles for CSR practices and instruments, taking into account existing EU initiatives and legislation and internationally agreed

1. Competitiveness, social cohesion, environmental protection, the consumer dimension and the international dimension, including human rights, democratisation and conflict prevention aspects, were also taken into account, as crosscutting issues, by all the roundtables.
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3. WHAT IS CORPORATE SOCIAL RESPONSIBILITY?

defining csr
Corporate Social Responsibility (CSR) is a fluid concept and can be described as an amalgamation of a wide range of interests and activities. As a topic it is still evolving and it covers a broad range of issues such as the environment, community involvement, human rights, diversity, employee well-being, corporate governance, stakeholder dialogue and involvement, advertising, supply chain management, health and safety etc. The nature, content and degree of complexity of CSR is also largely company specific and, as it is strongly linked to developments in society, the meaning and activities associated with it will change over time. Consequently, a single, internationally agreed definition does not exist, nor does agreement on the range of activities that should be considered as part of CSR. The following are the broad definitions used by the main institutions: The European Commission Green Paper on CSR attempts to define it 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. (EU Commission, 2002, p7)

The United Nations Conference on Trade and Development (UNCTAD) defines CSR as how business enterprises relate to, and impact upon, a societys needs and goals. All societal groups are expected to perform certain roles and functions that can change over time with a societys evolution(UNCTAD, 1999, p1). The International Organisation of Employers (IOE) defines CSR as initiatives by companies voluntarily integrating social and environmental concerns in their business operations and in their interaction with their shareholders. (IOE, 2003) Business in the Community Ireland defines CSR as a complex term but can be summed up in the concept of sustainable competitive profit achieving marketplace success with a minimum effect on the environment and a maximum positive affect on each company stakeholder. In addition CSR is about an organisation using its resources to combat social exclusion and contribute to social cohesion and recognising the benefits on corporate reputation in doing so. Terminology, and a varied use of language also contribute to the confusion surrounding CSR. Corporate social responsibility, social responsibility, corporate responsibility and corporate citizenship are the four main terms that are used. Despite the appearance of a varied focus between these terms, the objectives of each are, ultimately, the same. CSR incorporates all aspects of the terminology referred to above.

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principles of csr
As previously mentioned, the terms used to describe CSR can vary. Nonetheless, attempts have been made at identifying the principles of CSR. The participants in the European Multi-Stakeholder Forum developed a basic definition of the principles that they believe constitute CSR. They are as follows: (European MultiStakeholder Forum report, 2004, p3) CSR is the voluntary integration of environmental and social considerations into business operations, over and above legal requirements and contractual obligations. CSR is about going beyond these, not replacing or avoiding them. The commitment of management in driving CSR forward is essential. CSR is about the core business activities of a company, and while companies are there to make profits, an approach that integrates environmental and social considerations and is based on dialogue with stakeholders is likely to contribute to the long-term sustainability of business in society. CSR is one means amongst many for achieving economic, social and environmental progress, and for integrating these concerns into business practice. The dialogue with relevant stakeholders adds value to the development of companies CSR practices and tools. As employees are an integral part of a company, it is important to pay particular attention to the role of employees and their representatives and dialogue with them. CSR is complementary to other approaches of ensuring high environmental and social performance: there are limits to CSR, and it alone cannot be expected to ensure environmental and social improvement, and that it should not be used to shift public responsibilities to companies. CSR is an ongoing learning process for companies and stakeholders. The development of tools and practices is work in progress. Companies need to consider their approach carefully and choose tools that suit their needs and respond well to stakeholders expectations. They need to refine and develop their approach over time, responding to changing circumstances and expectations. Scope for flexibility, innovation and refinement are important for successful CSR.
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Convergence of CSR practices and tools is occurring on a market-led basis through voluntary bottom-up and multi-stakeholder approaches, and other drivers, and that this can achieve quality and a good balance between comparability, consistency and flexibility. Companies taking a CSR approach, as well as other organisations, benefit from communicating about these activities in a transparent and meaningful way. There are different ways in which this can be achieved, of which reporting is one. A companys response to the transparency challenge will depend on its activities, capacity and the needs of its stakeholders, which may be difficult to reconcile. The environmental, social and economic impacts of a companys activities up and down its supply chain, as well as in its own operations, need consideration. When operating in developing countries and/or in situations of weak governance, companies need to take into account the different context and challenges, including poverty, conflicts, environment and health issues.

individual components of csr


There are a wide variety of CSR activities in which a company can engage. Those measures which are adopted can vary, depending on a number of factors such as the size of the company or the countries in which it operates. Pressure by Governments, NGOs and trade unions can also influence the direction the company eventually decides to take on CSR. Tools and initiatives can provide companies with some guidance as to how to approach this topic and formalise their CSR activities, and some of them can also provide external verification/certification of CSR activities if desired. Even though the list is broad, the following model designed by Business in the Community UK (2000), provides an example of the some of the issues that a formal CSR policy can address.

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the issues
workplace
Equal opportunities Workforce diversity Work-life balance Training and life-long learning Health and safety Human Rights

marketplace
Positive/negative impacts on society of core products and services Issues around buying and selling, pricing etc Supply chain influence Customer and supplier complaints Goods for vulnerable consumers Advertising and consumer rights Cause-related marketing (donating portion of profits from certain product/ service revenues to social causes)

community
Impact of local operations on the community Measurement of employee time, management costs, cash and resources donated Business investment in the community

environment
Environmental management Impact on environment of core products and services Emissions to air, land and water Use of natural resources Transport impacts

Source: Winning with Integrity, Business in the Community UK 2000 sourced in A Step by Step Guide to Integrating Corporate Social Responsibility across your Business
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4. BUSINESS CASE FOR CORPORATE SOCIAL RESPONSIBILITY

A strong business case exists for CSR and, over the past few years, it has emerged as one of the most important tactics for business survival. It is acknowledged in research and best practice that the long-term profits of a company largely depend on the planning and activities for the future sustainability of that company. It is also well documented that there is a direct correlation between the social, environmental and ethical practices of a business and sustainability. Consequently, employers are increasingly recognising the value of CSR and are reviewing and formalising their CSR activities to maintain their long-term prospects and competitiveness in the marketplace. There are a variety of internal and external business drivers behind CSR that contribute to the well-being of a business and some of them are listed below. They have been divided into seven categories in the model below.
Factors influencing the business case for Corporate Social Responsibility

corporate governance
Corporate governance requires compliance with all relevant laws as a matter of course(as) legal obligations are requirements, which if not honoured may result in the company being unable to function legitimately. (IBEC, 2001, p10) While corporate governance may be focused on companies statutory requirements, it also provides a backdrop for CSR, as it encourages responsible business behaviour as well. A companys awareness of the impact of its operations on all of its stakeholders, and a consequent pursuit of responsible practices, lies at the heart of CSR. Therefore corporate governance has an indirect impact and can encourage the growth of CSR activities in a business.

Corporate Governance Increased Consumer Confidence

Competitive Advantage

CSR
Investment Improving relationships with stakeholders Positive PR image Cost Benefit Analysis
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competitive advantage
CSR can provide a competitive advantage to a company, as it can help to meet the emerging demands of consumers, prospective employees and investors. Increasingly, companies need to integrate corporate ethics into their production and marketing methods and supply chains to remain competitive and differentiate themselves from their competitors. Consumers are now purchasing products that are developed in a way that accords with the values they hold. The importance of values to the purchasing power of consumers is evident in the substantial growth of companies such as the Body Shop and Fair Trade that integrate CSR into their business through their supply chain processes and procedures, and their marketing campaigns. With the growth of information technology, highly skilled prospective employees are able to access a substantial amount of information about a company quickly and easily through the Internet. The ethics of a company and the considerations given by that company to the community and environment in which it operates can influence the decision of that person whether or not to apply for a job with that company. It has been reported that CSR can decrease long-term risk for companies, while also enhancing their reputations. Risk management and reputation influence investor relations and can increase the chances of attracting new investors to a company. Enhanced corporate reputation also affects other areas of the business (see below).

The corporate reputation of a company can also influence brand integrity. Research by Interbrand found that 96% of Coca Colas stock market value is in intangibles such as reputation, knowledge and the brand. (and). Interbrand predict .the intangible valuation of companies represented by brands will rise to 45% by 2010. (Grayson et al, 2001) CSR can help to enhance the reputation of a business among all its stakeholders by formalising the activities that the business is conducting in the area and providing a communications medium that can be used to promote those activities.

investment
In recent years there has been a growing recognition that for business to be successful it must have stability and continuity with its key stakeholders. The profit margin is no longer the sole indicator of a lucrative company, as sustainable business has emerged as another indicator of a good investment. Investors and analysts are expecting more detailed information to be provided by the company on nonfinancial aspects so they can consider the triple bottom line and longer-term risk issues of reputation and risk management.

improving relationships with stakeholders


A better working relationship with the community, shareholders, employees etc., can be a result of focusing the business on CSR. The integration of the concept and the language into the day-to-day exchanges between these parties can help to increase stakeholders awareness of the values of the business and the importance of the links with all interested parties. This can result in the attraction and retention of skilled employees, increased community support for the business, increased investment in the company and more positive publicity.

corporate reputation
The impact of business on society has never been scrutinised more critically than today. The high profile corporate scandals of the 1980s and 1990s damaged public confidence in business and corporate reputation is now recognised as a valuable commodity to business. Generally speaking, more and more companies are now required by their shareholders to produce social/sustainable reports alongside their annual reports. In addition, NGOs and the wider public are now more dubious about the activities of companies operating in foreign jurisdictions and as a consequence, they are monitoring their activities more closely.

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cost/benefit analysis
CSR is quite intangible and can, thus, be difficult to cost. Nonetheless, tangible measurement indicators can include costs associated with recycling and the cost to the business of recruitment and retention. Many businesses have reported that they have experienced reduced costs as a result of reducing, reusing and recycling products. In addition to the above, if an employee likes where they work and the values of the company reflect their own, they will be more likely to remain, thereby reducing staff turnover and recruitment costs.

positive public image


Increased media attention on abuses of corporate power has helped to raise public awareness of corporate behaviour. While CSR is not just a public relations exercise, the internal and external promotion of CSR activities can increase the positive reputation of a business as well as enhancing communication. The understanding by the media and other parties about the values of the business and how it operates can also be increased through the promotion of CSR activities.

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CORPORATE SOCIAL RESPONSI BI LITY

5. INTERNATIONAL INSTRUMENTS AND INITIATIVES ON CSR

governmental and intergovernmental initiatives


OECD GUIDELINES FOR MULTINATIONAL ENTERPRISES The Guidelines for Multinational Enterprises (MNEs) are recommendations addressed by 36 Governments (including Ireland) to multinational enterprises operating in, and from, their countries. They provide voluntary principles and standards for responsible business conduct consistent with applicable laws, and in areas such as product safety, environment, employment and industrial relations, supply chain responsibilities, science and technology, taxation and competition. The guidelines aim to ensure that the operations of these enterprises are in harmony with government policies, to strengthen the basis of mutual confidence between enterprises and the societies in which they operate, to help improve the foreign investment climate and to enhance the contribution to sustainable development made by multinational enterprises.(OECD, 2000,p 15) Governments of the 36 adhering countries have established a system of national contact points to promote the observance of the guidelines by multinational enterprises and to act as a forum for the discussion of all matters relating to those guidelines. The guidelines are part of a broader instrument the OECD Declaration on International Investment and Multinational Enterprises. The Declaration promotes a comprehensive and balanced approach for governments fair management of FDI and for

corporate responsibility. Even though the guidelines are directly aimed at multinational enterprises, they state that domestic enterprises and SMEs should be subject to the same expectations in respect of their conduct wherever the guidelines are relevant (OECD, 2000). Further information on the OECD Guidelines for Multinational Enterprises can be found on www.oecd.org

ILO TRIPARTITE DECLARATION OF PRINCIPLES CONCERNING MULTINATIONAL ENTERPRISES AND SOCIAL POLICY The Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy was adopted by the ILO in response to concerns about the activities and conduct of MNEs in host countries. The aim of the Declaration is to encourage the positive contribution which multinational enterprises can make to economic and social progress and to minimise and resolve the difficulties to which their various operations may give rise, taking into account the United Nations resolutions advocating the establishment of a New International Economic Order. (ILO, 2001, p2). The principles are voluntary and were developed to offer guidance to MNEs, governments, and employers and workers organisations in such areas as employment, training, conditions of work and life and industrial relations. The Declaration reiterates that the principles are a guide, and are commended to governments, employers and workers organisations of home and host countries and to the multinational enterprise

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itself. A number of international labour conventions and recommendations reinforce the provisions of the Declaration and it is made clear that its provisions shall not limit or otherwise affect obligations arising out of any ILO convention (ILO, 2001). Periodic surveys are conducted to monitor the effect given to the Declaration by MNEs, governments, and employers and workers organisations. A summary and analysis of the replies received are submitted to the ILO Governing Body for discussion. In the event of a disagreement over the application of the Declaration, the parties, using a procedure instituted in1981, may submit a request to the ILO for an interpretation of the meaning of its provisions (ILO, 2001). The ILO is of the view that this instrument provides social policy guidelines in a sensitive and highly complex area of activities. Adherence to the Declaration by all concerned would contribute to a climate more conducive to economic growth and social development.(ILO, 2001, p5). Further information on the ILO Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy can be found on www.ilo.org

Universal Declaration of Human Rights, the ILO Fundamental Principles and Rights at Work, the Rio Declaration on Environment and Development and the UN Convention against Corruption. During the first Global Compact Leaders Summit, held on 24 June 2004 at UN Headquarters in New York, the Secretary-General announced the addition of a tenth principle on corruption. The 10 principles are finite and cannot be extended unilaterally. For more information see www.unglobalcompact.org): The Global Compact is not a regulatory instrument linked with external monitoring or auditing of company activities. It relies on public accountability, transparency and for companies to demonstrate to their employees and communities how they are being responsible corporate citizens instead (IOE, 2003). By signing up to the Global Compact, a company states that it is prepared to work towards the achievement of the objectives of the Global Compact and to maintain the momentum of improvement. Companies are also encouraged to exchange information about the initiatives they used to translate the Compact and its principles into business strategies and operations. Further information on the Global Compact can be found on www.unglobalcompact.org

THE UN GLOBAL COMPACT The Global Compact is a voluntary UN initiative by the UN Secretary-General, Kofi Annan, that invites business to play a role in building the missing social infrastructure of the new global economy by improving their own corporate practices.(Annan, 2003) The lead UN agencies involved are the ILO, the UNEP and the UN High Commissioner for Human Rights (UNHCHR). The United Nations Development Programme (UNDP) is also involved in assisting the agencies in developing country-specific responses and activities (IOE, 2003). The UN aims to advance corporate citizenship through this initiative by the identification and dissemination of good practice in four areas - human rights, labour, the environment and corruption. Launched in January 1999, the Compact is intended to realise its objectives through promoting the integration of 10 key principles into the strategies and operations of private business around the world and consequently, stimulating action in support of UN goals. Nine principles were drawn from the

UNITED NATIONS (DRAFT) BUSINESS NORMS ON THE RESPONSIBILITY OF TRANSNATIONAL COMPANIES The United Nations (Draft) Business Norms on the Responsibility of Transnational Companies were adopted by the UN Sub-Commission on the Promotion and Protection of Human Rights on 13 August 2003. In April 2004, they were then submitted to the full United Nations Commission on Human Rights for preliminary consideration. At the 60th session on 20 April 2004, the Commission decided unanimously not to adopt the draft norms as a legal text and not to permit monitoring of them. Instead, it requested the Office of the High Commissioner to compile a report setting out the scope and legal status of existing initiatives and standards relating to the responsibility of transnational corporations and related business enterprises for consideration by the Commission at its April 2005 session. The High Commissioner is currently consulting with stakeholders (including companies and employers associations) to hear their views on these issues.
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The draft norms suggest various social, environmental and economic obligations for transnational companies, based mostly on existing human rights and labour standards. However, it has been suggested that the norms propose to make private business, including individuals within a corporation, liable for human rights violations. The norms (www.un.org) specify that: Businesses must ensure that their impact does not contribute a violation or work against the realisation of human rights (including civil, political, economic, social and cultural rights). Obligations extend to the security of persons, core labour rights, legal compliance, curbing corruption, consumer protection, environmental protection and operations in conflict zones. Businesses should establish internal structures and contract clauses to ensure compliance, and will be obliged to provide reparations to any party affected by non-compliance. States maintain the primary responsibility to protect and promote international human rights, and shall create the necessary legal and administrative framework to ensure implementation. A compliance-monitoring unit should be established, possibly by the United Nations. Further information on the United Nations (Draft) Business Norms on the Responsibility of Transnational Companies can be found on www.un.org

UNEP FI and the Global Reporting Initiative (GRI) have co-convened a working group to complete a GRI Financial Services Sector Supplement (Environmental Performance) for the International Finance Sector. An indicator will be developed to allow companies to measure the impacts of financial sector products and services on the environment. This product will be produced after a period of public consultation in 2004. Guidelines on the needs of financial institutions in developing countries and transition economies are also due to be completed by the end of 2004. Further information on the UNEP FI initiatives on the environment and sustainable development can be found on www.unepfi.net/fii/

US - UK VOLUNTARY PRINCIPLES ON SECURITY AND HUMAN RIGHTS In 2000, representatives from the US Department of State, the UK Foreign and Commonwealth Office; oil, mining and energy companies, and human rights, workers and corporate responsibility groups, developed a set of Voluntary Principles on Security and Human Rights. These principles are designed to provide practical guidance to strengthen human rights in company security arrangements in the extractive (ie, mining) sector. They also form the basis for a global standard for the sector. The principles are the first set of guidelines of their sort for this sector. They address three areas: 1. risk assessment;

UNITED NATIONS ENVIRONMENT PROGRAMME FINANCIAL INITIATIVE (UNEP FI) STATEMENT ON THE ENVIRONMENT AND SUSTAINABLE DEVELOPMENT The UNEP FI was founded by the UN Economics and Trade Unit in 1992 (revised May 1997) to engage financial institutions in dialogue on sustainable development. UNEP FI comprises the Financial Institutions Initiative (FII), for the banking sector, and the Insurance Industry Initiative (III), for insurers, reinsurers, pension funds and asset management concerns. The UNEP FI statement on the environment and sustainable development commits all signatories to the integration of environmental considerations into all aspects of their operations.

2 relations with public security; 3. relations with private security. Participants involved in this initiative include Human Rights First, Human Rights Watch, Amnesty International, International Alert, Chevron, Texaco, Freeport McMoran, Conoco, Shell, BP, Rio Tinto, Fund for Peace, Council on Economic Priorities, Business for Social Responsibility, the International Business Leaders Forum and the International Federation of Chemical, Mine and General Workers Unions. Further information on the US - UK voluntary principles on security and human rights can be found on www.fco.gov.uk

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INTERNATIONAL ORGANIZATION FOR STANDARDIZATION (ISO) INTERNATIONAL STANDARD FOR SOCIAL RESPONSIBILITY The ISO senior management committee decided at the end of June 2004 to develop an international standard on social responsibility (SR). The objective is to produce a guidance document, written in plain language which is understandable and useable by non-specialists. Currently, the standard is not intended to be used in certification or as a specification document against which conformity is assessed. To develop the SR standard, ISO is setting up a new working group, which will answer directly to ISO's Technical Management Board (TMB) that oversees the activities of the organisation's 186 standardsdeveloping technical subcommittees. ISO formed a task force to propose the terms of reference and operating processes for the working group for consideration at the TMB meeting in September 2004. Following this, the TMB prepared a formal proposal that ISO undertake the preparation of an international standard giving guidance on social responsibility. Member bodies have been invited to vote on the proposal by 7 January 2005. ISO has assigned the leadership of the working group that will develop an international standard to the national standards institutes of Brazil (ABNT) and Sweden (SIS). It is expected that the standard will be completed for publication in 2007. Further information on the ISO Standard for Social Responsibility can be found on www.iso.org

Business in the Community Ireland addresses corporate responsibility in the workplace, marketplace, community and environment through its Corporate Responsibility Policy and Practice Division. This service promotes the integration of socially responsible business practices in its member companies, by supporting them in recognising the extent of their impact on all their stakeholders. Business in the Community has produced a number of publications on CSR. They include: A Guide to Integrating Corporate Social Responsibility Across Your Business, Winning with Integrity: A guide to social responsibility Business Impact Task Force. The organisation has funded studies to highlight examples of socially responsible policies and practices in companies of all sizes and sectors in Ireland. Further information on Business in the Community Ireland can be found on www.bitc.ie A Corporate Responsibility Index was launched by a consortium of 700 companies in the UK arm of Business in the Community. The index was launched in response to an identified need on the part of companies for reliable and standardised information that would enable a company's performance to be compared with its competitors. The Index is a benchmarking tool that evaluates and compares responsible business behaviour, corporate responsibility strategy, the integration of this strategy into the business, the management of corporate responsibility within the organisation and performance in a range of social and environmental impact areas. Further information on the Corporate Responsibility Index can be found on www.bitc.org.uk

business-led initiatives
BUSINESS IN THE COMMUNITY (BITC) Business in the Community Ireland specialises in corporate responsibility and community involvement. The overall mission of the organisation is to harness the power of Irish business to maximise its positive impact on all its stakeholders. In relation to CSR, some of the services provided to member companies include measurement and reporting of their CSR activities. The organisation also works with public bodies and the non-governmental sector lobbying and advocating the benefits of social partnership and corporate responsibility.
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CAUX PRINCIPLES FOR BUSINESS The Caux principles were established in 1994 by a network of business leaders from Japan, Europe and North America. They provide a guide to companies to develop, re-examine, implement and monitor their own internal principles. The key principles covered include the responsibilities of business, its economic and societal impact, behaviour, respect for rules, support for multilateral trade, respect for the environment, and avoidance of illicit operations. The general principles can be found on www.cauxroundtable.org

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THE ETHICAL TRADING INITIATIVE (ETI) This was established in September 1998 in the UK and is a formation of companies, NGOs and trade union organisations. The ETI seeks to promote respect for the rights of workers producing for the UK markets and help improve their working conditions by developing and encouraging the use of widely endorsed standards, embodied in codes of conduct, and monitoring and auditing methods. The ETI has developed a basic code of labour practice and accompanying principles of implementation for company performance. Both of these tools were negotiated and agreed by the founding trade union, NGO and corporate members of ETI. The code contains nine clauses that reflect the most relevant ILO standards with respect to labour practices. When companies join ETI, they commit to implementing the code in their supply chains and reporting annually on their progress in doing so. Further information on the ETI can be found on www.ethicaltrade.org

WORLD ECONOMIC FORUM (WEF)/CEOS GLOBAL CORPORATE CITIZENSHIP: THE LEADERSHIP CHALLENGE FOR CEOS AND BOARDS A joint statement and framework for action was issued by the WEF and a number of CEOs in 2002. It recommends a Framework for Action to be used by business leaders to develop a strategy for managing a companys impact on society and its relationships with stakeholders. The framework contains a template for a leadership process within companies and is intended to be complementary to the various voluntary corporate citizenship principles and guidelines that have been developed in specific areas. In most cases, it will include elements of good corporate governance and ethics; responsibility for people; responsibility for environmental impact and a broader contribution to development. Further information on the World Economic Forum / CEOs global corporate citizenship challenge can be found on www.weforum.org

GLOBAL SULLIVAN PRINCIPLES OF SOCIAL RESPONSIBILITY FAIR LABOR ASSOCIATION (FLA) The Fair Labor Association is a non-profit organisation established in the US in November 1998 (amended October 2001) by the Apparel Industry Partnership comprising companies, NGOs and educational institutions. The FLA Charter has created an industry-wide workplace code of conduct and monitoring system that hold companies publicly accountable for their labour practices. The FLA will accredit the independent monitors, certify that companies are in compliance with the code of conduct, and serve as a source of information for the public. Further information on the Fair Labor Association can be found on www.fairlabor.org In 1977, Reverend Leon Howard Sullivan, the first black member of the board of the General Motors Corporation, secured GMs support in the development of the Sullivan Principles, a code of conduct for American businesses operating in South Africa. Reverend Leon Sullivan worked with multinational enterprises and NGOs to encourage companies to work towards economic, social and political justice in all their operations. These principles were widened for universal application in 1999, and include human rights, equal opportunity, worker treatment, child labour, forced labour, abuse, freedom of association, compensation for basic needs, health and safety, fair competition, community development, and promotion of principles with suppliers and contractors. More information on the Global Sullivan Principals can be found at www.globalsullivanprincipals.org

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WORLD-WIDE RESPONSIBLE APPAREL PRODUCTION PRINCIPLES (WRAP) The American Apparel and Footwear Association established these principles in 1998 to be core standards for production facilities participating in the WRAP Certification Programme. The certification programme was established to independently monitor and certify compliance with the socially responsible global standards for manufacturing, and ensure that sewn products are produced under lawful, humane and ethical conditions. Following the completion of a self-assessment questionnaire, an accredited independent monitor is employed to conduct a company audit as part of the overall compliance-monitoring phase. More detailed information is available on www.wrapapparel.org

ngo-led initiatives
ACCOUNTABILITY 1000 The AccountAbility 1000 framework was adopted in November 1999 (revised 2002) by the Institute of Social and Ethical AccountAbility to improve accountability and performance by learning through stakeholder involvement. It is focused on securing the quality of social and ethical accounting, auditing and reporting. It does not prescribe what should be reported on, rather the manner in which it should be conducted. It is a foundation standard and, as such, can be used to underpin the quality of specialised accountability standards and as a stand-alone system for managing and communicating social and ethical accountability and performance. The AA1000 Framework is supported by a series of specialist modules (AA1000 Series). Further information on Accountability 1000 can be found on www.accountability.org.uk

INTERNATIONAL COUNCIL OF TOY INDUSTRIES (ICTI) The International Council of Toy Industries launched an ethical auditing initiative in 2002, called the CARE programme, to independently monitor manufacturing practices among all toy manufacturers in a number of areas including fair pay, decent working conditions, employee health and safety standards and child labour. The auditing process was developed by the Toy Industry Association of the United States (TIA) and the Toy Industries of Europe (TIE), tested in China, and then turned over to ICTI. The overall objective of the initiative is to create a single, efficient and coherent system for factories that will have the endorsement of the worlds retailers and consumers, ensuring that there is uniformity of standards and auditing practices, as well as total transparency. The process entails site inspections to establish if factories are complying with the code of business conduct of the ICTI. Since the advent of ethical auditing, an agreement has been reached on guidelines, and six independent auditing firms have been chosen to conduct the work. An oversight committee is to be established to monitor toy factory compliance with the industrys code of business practice Further information on the International Council of Toy Industries can be found on www.toy-icti.org

AMNESTY INTERNATIONAL HUMAN RIGHTS GUIDELINES FOR COMPANIES Established in September 1998 by the Amnesty International UK Business Group, these guidelines comprise an introductory set of human rights principles and are based on international standards. They were developed to assist companies in situations where they must tackle and manage human rights violations or the potential for such violations. The key principles covered include; human rights, security, community engagement, freedom from discrimination, freedom from slavery, health and safety, and security management in general. The guidelines also encourage companies to promote these standards externally to their contractors, suppliers or partners and they provide suggestions to companies on how to promote human rights internally. Further information on Amnesty Internationals human rights guidelines for companies can be found on www.amnesty.org

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CERES PRINCIPLES These principles were established in 1989 by over 80 NGOs, environmental, investor and advocacy groups. The principles establish an environmental ethical standard, with criteria by which investors and others can evaluate and review the environmental performance of companies. Companies that endorse these principles make a promise to go voluntarily beyond the requirements of the law, and publicly assert their belief that corporations have a responsibility for the environment. Ceres has also developed a North American/ Canadian Sustainability Reporting Awards Programme with the Association of Chartered Certified Accountants (ACCA). The awards programme rewards best practice in reporting on sustainability, environmental and social issues and provides guidance to other entities that are publishing or intend to publish sustainability reports. Further information on the Ceres Principles and Sustainability Reporting Awards Programme can be found on www.ceres.org

insurance companies should report on what they are doing to improve access to financial services for disadvantaged populations and SMEs, reduce debts for developing countries, and offer products likely to appeal to ethical investors. The GRI guidelines also propose that independent assurance can help to enhance the credibility of a sustainability report. Further information on the Global Reporting Initiative can be found on www.globalreporting.org

ICFTU/ITS BASIC CODE OF LABOUR PRACTICE This Code was established in 1997 by the International Confederation of Free Trade Unions/International Trade Secretariats. The code aims to promote international standards and the inclusion of a list of minimum standards addressing trade union rights and labour practices in codes of conduct. This basic code is designed to assist any trade union organisation in negotiations with companies on labour practice and in working with NGOs on campaigns involving codes of conduct. Further information on the ICFTU/ITS basic code of labour practice can be found on www.itcilo.it GLOBAL REPORTING INITIATIVE (GRI) The Global Reporting Initiative was adopted in 1997 (revised in June 2000 and again in September 2002) and is an official collaborating centre of UNEP. The initiative also works in conjunction with the Global Compact. It is a partnership comprising NGOs, corporations, government representatives, accounting organisations, academics and business associations. The GRI began as a project of the US environmental organisation (CERES) and is a voluntary initiative dedicated to developing and disseminating globally applicable sustainability reporting guidelines. The aim of the guidelines is to provide an internal vehicle for evaluating the consistency between the organisations economic, environmental and social policy and its actual performance. The GRI has developed a series of reporting principles to achieve this aim. More information is available at www.globalreporting.org Social performance indicators for financial institutions have been set out in a supplement to the GRI guidelines on sustainability reporting. The finance supplement suggests that banks and TCCR PRINCIPLES FOR GLOBAL CORPORATE RESPONSIBILITY: BENCH MARKS FOR MEASURING BUSINESS PERFORMANCE These principles were established in 1993 by a nondenominational alliance of religious groups the Taskforce on the Churches and Corporate Responsibility in Britain, the United States and Canada. The principles are suggested as a means of developing and monitoring corporate codes of conduct, particularly when managing relations with stakeholder bodies and they are also offered to NGOs (www.web.net/~tccr/benchmarks) The Principles of Global Responsibility: Bench Marks for Measuring Business Performance (referred to as Bench marks) was first published in 1995. The framework was assessed by church groups, private industry, labour organisations, womens groups and NGOs, and revised and re-published. In 1998, the updated text was released in Canada and internationally. Further information on the TCCR Principles can be found on www.web.net/~tccr/benchmarks
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SOCIAL ACCOUNTABILITY 8000 (SA 8000) Social Accountability International is a US-based nonprofit organisation that aims to improve workplace conditions through the expansion and further development of an international workplace standard, SA8000, and its associated verification system. Published in 1997 (revised in 2001) by Social Accountability International, SA8000 has been developed as a means for retailers, brand companies, suppliers and other organisations to maintain just and decent working conditions throughout the supply chain. (www.sa-intl.org) Further information on Social Accountability 8000 can be found on www.sa-intl.org

SOCIAL VENTURE NETWORK (SVN) STANDARDS OF CORPORATE SOCIAL RESPONSIBILITY The SVN Standards were established in 1999 by US and European business and social entrepreneurs and NGOs. Under this initiative, companies are encouraged to choose parts of a compendium that they can use to improve social performance and make continuous improvements that can be applied to their overall strategies. The standards are not an implementation model but they describe the important aspects of CSR, suggest practices and measures that other companies have used to measure their social responsibility practices and they highlight resources for additional information. The SVN standards are based on nine topics. There are three general topics: ethics, accountability and governance- and six topics related to each stakeholder group; investors, employees, business partners, customers, community and environment. Within each standard, the information is organised into principles, practices, measures and resources. Further information on the Social Venture Network Standards of corporate social responsibility can be found on www.svn.org

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6. CSR CASE STUDIES

ibm ireland
IBM, the information technology company, started operations in Ireland in 1956. IBM employs in the region of 3,600 people across all of its operations in Ireland, making it one of the largest multinational employers in the country. In addition to a growing sales and services business serving Irish customers, IBM has an extensive technology campus and manufacturing facility based in Mulhuddart on the outskirts of Dublin, a software development laboratory, a large telesales and telemarketing centre, an international financial services solutions centre and a corporate treasury centre. AIMS AND OBJECTIVES OF ENGAGING IN CSR IBMs global CSR Report 2003 What is the value of a company? and forthcoming 2004 CSR report, outline and measure IBMs CSR leadership, innovations and commitments from1913 to the present day and beyond. Being seen as a great employer, a trusted corporate citizen and a valued member of the community have always been priorities for IBM. This CSR commitment has been delivered with the same level of passion that is applied to client service or product innovation. IBM has many examples of how it constantly strives to ensure the best possible social and human outcomes for its employees in the workplace, members of the wider local and national community (especially those in more disadvantaged circumstances), for the environment, and for its clients, suppliers and business partners in the marketplace.

CSR PROVISIONS AND INITIATIVES IN IBM In addition to IBMs global corporate instruction on CSR, each of the pillars of CSR is also guided by a specific global policy. Among them are corporate policies on quality, workforce diversity and environmental affairs and corporate instructions on community relations. In turn, every IBM employee is also required to sign up regularly to the current Business Conduct guidelines and IBM has a Corporate Citizen Committee. The Committee comprises 10 Vice Presidents from across the company. In 2004, the Committee is focussing on the publication of the IBM 2004 CSR Report as well as participation in the Global Leadership Network for Corporate Citizenship, which IBM initiated in 2003 and which involves 10 worldwide corporate members and two research partners. In Ireland, IBM is an active, corporate founding member of Business in the Community Ireland B2B (business to business) CSR organisation. Every IBM facility is actively involved in a wide programme of CSR activities. Listed below are some recent examples of CSR best practice and new initiatives in Ireland. A strategic, long-term community relations programme that has contributed over $2m/1.6m in the past 5 years, including the IBM On-Demand Community Volunteer programme for employees and retirees established in November 2003. The IBM KidSmart Early Learning Programme, in operation since 2000 and the Wired for Learning schools partnership with the Department of Education and Science which has been in existence since 1998, among others.

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Environmental affairs projects include participation in IBMs worldwide ISO 14001 registration, 2004 site projects for enhanced access and mobility project for people with disabilities. As a member of Repak, IBM recycles 72.6% of all non-hazardous waste at the IBM Technology Campus, which is well in excess of the national requirement for recycling of 25% of packaging waste. IBM has a number of workplace diversity and wellbeing programmes in place. They include an IBMsupported childcare facility, various flexible working options, participation by Irish employees at the first IBM Europe Gay, Lesbian, Bisexual and Transgender Empowerment Conference in May 2004 and the launch of a Diversity Council in Ireland in April 2004. With regard to the market place, IBM Ireland participates in the companys worldwide ISO 9901; 2001 quality management system registration. In addition, a research project on the supply chain, involving UCD and American universities, has been initiated as well as customer satisfaction initiatives and other activities

IBM now issues an annual, global CSR Report that is available online and in hard copy (online only from 2004) to all internal and external stakeholders. Within IBM, all employees can access on demand, up-to-date global and local policy information and news from across all the CSR disciplines on its extensive internal intranet. Outside of IBM, the company uses the Internet and public relations to announce major initiatives or news. The company also participates in business-to-business networks such as those established by Business in the Community Ireland (BITC) and has submitted CSR best practice case studies to publications in 2003 and 2004. IBM also shares its CSR experience at seminars and conferences such as with the National Standards Authority of Ireland (NSAI) in November 2003 and the European Conference Boards CSR meeting in Dublin in June 2004.

ATTITUDES AND COMMUNICATION As part of the IBMs active commitment to being a leading corporate citizen, the company, both in Ireland, and worldwide, has built up a long-standing reputation for CSR best practice and continuous innovation. A key element of its strategy is partnership with all stakeholders. In Ireland, recent positive recognition which has been a source of pride to employees has come in the form of: the Chambers of Commerce Ireland Presidents Awards for CSR in 2004: citation and shortlisted for major CSR award to be announced in November; Guinness Living Dublin Awards 2003: overall winner and winner of the Business in the Community category; Repak 2003 recycling awards: finalists for Best Company for Best Practice; CSR Award 2003 from North-side Partnership (Dublin), recognising in particular IBMs local contribution to support the re-training of the unemployed; Best Companies to Work For 2003: Excellence in Gender Equality Award.

EVALUATION AND FUTURE IMPROVEMENTS IBMs annual global CSR Report uses a number of CSR measurements, including the Global Reporting Initiative (GRI) (See Section 5 of this report for an explanation of the GRI). On the ground, each CSR discipline and programme features a combination of measurements, targets and evaluation. The expansion of existing programmes, modifications to processes or the introduction of new initiatives is determined by feedback from IBMs bi-monthly anonymous Global Pulse employee survey that targets 5% of employees. In addition, information from customer feedback mechanisms, ongoing supply chain research, and independent research evaluations of community and schools programmes is used. Aggressive recycling targets in addition to external certifications are also pursued. Moving forward into 2005, IBM aims to sustain and develop all projects within its community programme and introduce new ones. It plans to include even more three-to-six-year-olds from disadvantaged backgrounds this year in the IBM KidSmart Early Learning programme. The company plans to exceed its 2004 target for 7% of employees and retirees to participate in its new On-Demand Community Volunteer Programme and aims to establish its new Web Adaptation Technology programme for people with disabilities and the elderly by early 2005. The company will continue to expand recycling rates in its environmental

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programme as well as finalise new site access and mobility features for the disabled at its Ballycoolin facility. IBM will be paying particular attention to progressing its shared university research collaboration on the supply chain/marketplace. In its workplace programmes, there will be a particular focus on maximising the impact of the new Diversity Council and other such initiatives. Finally, IBM will take every opportunity to measure, report and share its CSR experience, through participation at relevant seminars, publications and participation in the pilot Percent Standard for community giving.

AIMS AND OBJECTIVES OF ENGAGING IN CSR At Vodafone,Being a Responsible Business is one of six strategic goals and is underpinned by its core values one of which is passion for the world around us. Vodafones commitment to CSR is based on maximising the benefits that mobile telecommunications can bring to communities, while minimising any negative impacts. Vodafone is of the view that there are clear benefits deriving from a commitment to CSR. It believes that CSR can deliver real cost efficiencies, while building a contented workforce, giving something back to society and gaining a good reputation. Vodafone is also of the view that CSR can mitigate against risk and prevent potential brand damage. As leader in its business sector, Vodafone is also of the view that it needs to lead by example.

KEY LEARNING POINTS While IBM may be in a position to share the rich experiences of long-standing, global CSR strategy and activities, it also finds it invaluable to learn from other companies who are at various stages of their CSR development in Ireland. This is largely enabled through participation in business networks. Not only have these networks enhanced relationships and profile with other companies and helped IBM to keep up to date with national and international developments, but they also provide access to a uniquely voluntary, and open fora of information exchange with clients and competitors alike. IBM would encourage other companies to network in a similar way, especially during the development of a CSR strategy. It also welcomes CSR initiatives by IBEC and ICT Ireland.

WHY ARE THESE ACTIVITIES IMPORTANT TO VODAFONE? Serving its customers As an industry leader, Vodafone believes that with this position comes responsibility. Vodafone believes that the rest of the telecommunications industry should be encouraged to adopt policies and conduct itself in a manner that benefits the communities in which it operates. Vodafones investment, particularly in the area of 3G has allowed it continually deliver a better service to its customers. Through informed dialogue with stakeholders it can understand attitudes, educate, adapt practices and ultimately serve its stakeholders better. Widespread long-term benefits Many of the initiatives in which Vodafone is engaged deliver cost efficiencies to its business, particularly in relation to employees, waste management, its network, recycling and the supply chain. It retains more staff, saves money through streamlining the supply chain and views better waste management in an environmental as well as a monetary context. Vodafone has invested heavily in its brand and a strong CSR ethic to underpin its business, which it believes, will reduce the companys risk exposure.

vodafone ireland
Vodafone is Ireland's leading mobile phone operator with a customer base of over 1.8 million and a total of 1,500 employees. Formerly part of the state telcoms company - Telecom Eireann, the company was acquired by Vodafone in May 2001 and is now part of the worlds largest mobile community. Vodafone holds 54% of the market share in Ireland, with mobile penetration in Ireland now standing at 89%. To ensure the highest quality customer experience, the company invests an average of EUR3.5 million to 4 million per week in network upgrades and enhancements. It continues to invest in its 2G network, while accelerating the launch of its 3G network, to ensure its customers receive the best coverage and quality of products and services now and in the future.
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CSR PROVISIONS AND INITIATIVES In 2003, Vodafone formalised its policy and committed to concentrating on achieving the highest standards of CSR in the areas of society, the environment and the economy. Its target is to achieve that goal by 2006. Vodafone is engaged in variety of activities both internally and externally and is working hard to integrate them into business as accepted practices. The Vodafone Ireland Foundation, launched in 2003, forms the cornerstone of its social investment policy. It plays an important role in helping the company realise its efforts in communities across the country. The Vodafone Ireland Foundation has four funding periods, distributing over 500,000 annually. It is currently supporting over 30 separate projects. The companys environmental and economic projects are conducted through eight initiatives all championed by teams within the business they are: EMF Transparency, Handset Recycling, Energy Efficiency, Waste Management, Products and Services, Responsible Marketing, Responsible Network Deployment and Relationships with Suppliers.

(Bernadette OCarroll, Project Manager, Shankill Rahoonane Family Resource Centre, Co Kerry) Our wildlife and vegetable garden has been a great success and has provided pupils with great pleasure especially during the spring and summer months. Despite all the changes in Ballymun of late, our garden remains intact and will hopefully remain a source of joy to pupils of Virgin Mary Girls National School as well as the wider community for the years to come. We are delighted with the support received from Vodafone and Conservation Volunteers Ireland which helped buy gardening equipment and tools for use by our junior gardeners. (Lynn Scarff Teacher, Virgin Mary National School, Ballymun, Dublin). Vodafone publishes an annual CSR report that is distributed to stakeholders. CSR information is included in the Vodafone Group report that is distributed to shareholders and the company also supports CSR initiatives within its public relations and advertising campaigns to both encourage involvement and publicise participants achievements.

ATTITUDES AND COMMUNICATION The following quotes illustrate the type of feedback received by Vodafone to date in relation to its CSR activities: Croi is dedicated to pursuing and attaining the highest level of cardiovascular health care for the people of the West of Ireland. Since 1985 Vodafone have funded and implemented a wide range of initiatives to improve cardiac services and facilities in the region. Croi depends entirely on voluntary effort and support and as such, the assistance we have received from the Vodafone Ireland Foundation is invaluable in helping us achieve our goals. (Neil Johnson, Chief Executive, Croi 2004) The support received from Vodafone is greatly appreciated by all those who use our centre and our organic teaching garden for which we received funding. The garden allows us to train local participants ranging in age from children to senior citizens basic gardening skills and appreciation of gardening. Without a doubt the garden brings great pleasure to many persons across the community.

EVALUATION AND FUTURE IMPROVEMENTS Every year perception research is undertaken by MORI to measure Vodafones general effectiveness in the CSR area. Its report details all CSR activity and Vodafone is also measured at group level against agreed objectives in its plan. The companys future plans centre on increased social investment and achieving better business efficiencies with positive consequent environmental and community impact. By the end of 2005 for example, Vodafone will: achieve a 10 % increase in the number of handsets returned for reuse and recycling; complete assessment of the impact of 3G on energy consumption; achieve an 85% reuse or recycling of network waste; and complete implementation of retail staff training.

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KEY LEARNING POINTS In Vodafones experience, planning, a formalised feedback loop and involvement of stakeholders are some of the most important elements of CSR. Vodafone believes that since it formalised its CSR plan in early 2003 it has been better able to monitor the composition and impact of its campaigns. The only problems encountered by Vodafone when formalising CSR practices was an underestimation of the amount of resources and commitment that would be required from all relevant parties. CSR transcends the structures of organisations. It needs to have support and resources at a number of levels. It has really only been with time that Vodafone has realised how extensive its ongoing commitment will be.

include economic performance, environmental performance, employee and community safety, and social programmes can pull a company in different directions. Intel prides itself on the fact that while its short-term economic priorities may shift, it maintains a long-term commitment to excellence in all areas in which it is involved. As corporate responsibility can encompass any relationship a company might have, Intel can judge its success only by integrating all of this and ensuring that the whole is greater than the sum of its parts. Intel continues to set high standards for itself for the future, not only in manufacturing excellence but also in improved performance across the corporate responsibility arena, from environmental performance and energy conservation to stakeholder relationships and employee-engagement programmes.

intel ireland
Ireland is Intel's centre of manufacturing excellence in Europe. Intel Ireland is a major source for the manufacture of high speed Intel Pentium 4 microprocessors, Pentium 4 support chips and the latest Flash memory technology using leading-edge semiconductor manufacturing processes. Intel has invested some 4.5 billion in turning 360 acres of the Collinstown Industrial Park into the most technologically advanced industrial campus in Ireland. The latest addition to the site, Fab 24-2, when completed in 2006, will bring the total investment to over 6 billion. Approximately 4,700 people are employed on site, both directly and indirectly. Intel Ireland's Leixlip plant produces microprocessors and communication silicon chips that are at the heart of much of today's computing and communications revolution.

CSR PROVISIONS AND INITIATIVES IN INTEL Intel has a formal corporate global policy on CSR and is supported by key managers in various locations around the world working on a range of initiatives within the company. Much like other core operating programmes at Intel, their ideas about corporate responsibility are embedded as a way of doing business throughout the organisation in human resources, purchasing, quality, investor relations, legal, environmental, health, safety, and every other aspect of corporate life. Intels commitment to doing the right thing runs deep in its corporate culture. Intel does not view corporate responsibility as a modern fad. In fact, much of what it does has been a part of the Intel way since its foundation in 1968. Over the past several years, expectations of corporations have changed. Making a profit for shareholders is still the top priority. However, companies are now also expected to be good corporate citizens. The company views corporate citizenship as the relationship forged between Intel, the communities in which it operates and society in general. At Intel, corporate citizenship is firmly embedded within its corporate values.

AIMS AND OBJECTIVES Intel sees CSR as sustainable business development in an ethical manner and the main objective is to focus on the triple bottom line rather than merely having a financial emphasis. Many variables are involved in the successful operation of a global enterprise. The ever-increasing importance of global competitiveness, pressures that

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Intel Ireland is involved in a broad range of CSR activities. It realises the importance of supporting the communities within which it is established and, as such, acknowledges this in its corporate values. Intel Ireland strives to improve the quality of life through community outreach, voluntary work and specific programme support. Work in the community is focussed on two initiatives: 1. The Intel Involved programme where employees volunteer their time to help community organisations/local schools. In 2003, Intel volunteers gave over 21,000 hours to the local community. Intels involvement in the community means that its employees see it as a good place to work one of Intels values. Intel believes that this programme is beneficial to everyone involved. Intel is seen by employees in a positive light and as a community leader. Employees like to give something back to the community and also get involved in something completely different to their day job. The community obviously benefits from the direct involvement of Intels volunteers. 2. Community environmental programmes include raising awareness of the benefits of recycling, and Intel has held a number of recycling days where people can dispose of household hazardous waste, white goods, electronic waste, etc., in an environmentally friendly way. The company has also worked closely with local schools to encourage environmental awareness at a young age. Intel Ireland has led a number of initiatives with local schools, ranging from sponsoring Eco-design competitions to installing can-bank recycling units in the schools and working with them to get their Green Flag. Intel Ireland has a number of other CSR initiatives in the education arena including the Intel Teach to the Future programme where 15% of teachers in Ireland were trained to integrate information and communications technology into classroom curricula, to improve student learning, creativity and achievement. In addition, two Intel Computer Clubhouses have been established in Ireland, one in Blanchardstown and another in the Liberties in Dublins inner city. These are just a few of the CSR activities Intel works on in Ireland.

ATTITUDES AND COMMUNICATION Intel has attained a leadership position in terms of CSR performance among the investment community and other key stakeholders. In addition, the company has found that the community and education sector response to these programmes has been overwhelmingly positive. Intel is recognised as a leader in the community, environmental and education arena. It has the opportunity to engage with key stakeholders in these areas to understand their needs, issues and plans and therefore actively participate with them to make progress in these areas. Intel communicates with stakeholders in the community through a number of media: advertising the various initiatives; their web-site; and a community newsletter Local Update, which it sends out to 16,000 households locally, three times per year. Such is the focus on CSR that at the AGM every year when the financial results of the company are published, Intel also publishes a Good Citizenship Report that covers the broad gambit of its CSR activities, including those in Ireland. (To read Intels Good Citizenship Report go to www.intel.com/intel/finance/gcr03/ )

EVALUATION AND FUTURE IMPROVEMENTS The company has featured on the Dow Jones Sustainability Index for the past six years and has been selected as the technology-sector leader for the past four years. Ethical investors hold Intel as the number one investment in their portfolios. Locally, the Intel Involved programme can measure the results from the numbers of hours given to community projects per year and the feedback the company gets from the organisations it works with. Intel conducts a Community Perception Survey each year to establish what the attitude of the community is towards it and those programmes which are valued by the community, and with which it is familiar. This allows the company to measure what is working and help define its plans going forward.

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Intel is of the view that corporate responsibility is not finite. Intel is proud of what it has accomplished, although acknowledging that, more remains to be done. Continuous improvement is a part of its value system, so it is constantly modifying, changing, and growing programmes and approaches so that it can achieve even better results.

operates in both the Republic of Ireland and Northern Ireland and also operates as Allianz Direct and Allianz N.I. The company currently employs 905 staff in Ireland.

KEY LEARNING POINTS One of Intels challenges moving forward is to be responsive to its various stakeholders as the definition and focus of corporate responsibility becomes more defined. Intel is monitoring the many standard-setting initiatives underway around the world, and is actively engaged in helping to shape some of these initiatives. Intel is also identifying and strengthening its collection of data and reporting systems across the triple bottom line. Intel finds that this entire discipline is attracting more attention from investors, legislators, and its own employees worldwide. The challenge for the company in the future will be to continue to measure and improve on its results. Intels deeply held view is that CSR is a corporate commitment and should not be legislated for nor covered by regulation, as many stakeholders believe. Intel is also of the view that the response to the CSR agenda must be a value-driven one and not financially based. In the past year, Intel has enhanced reporting on its public websites in the areas of community involvement, education outreach, diversity, workplace environment and environmental performance. The measurement of its corporate responsibility efforts must be easily available so that various stakeholders can assess their performance for themselves.

AIMS AND OBJECTIVES OF ENGAGING IN CSR Looking at the wider benefits that CSR can bring to employers and the aims and objectives of engaging in CSR practices, Allianz is of the view that the benefits to the organisation include the following: assist in redefining or integration of corporate purpose or mission; it can offer distinctive positioning in the market place; it can build credibility and trust with customers and employees; it can help recruitment and retention; it can strengthen links with local community; and it can extend networks to embrace dialogue with a range of interest groups, creating a wider frame of reference for strategic decisions. Allianz is of the view that compliance with legal obligations is a key issue for managing risk and is the foundation of good CSR but Human Resource Management is also needed to promote positive behaviour and relationships in the workplace. The psychological contract is based on trust, fairness and willingness to deliver on the deal and the basic assumption behind this contract is that, in order to motivate and retain employees, employers have to treat them properly.

allianz ireland
Allianz Ireland is a member of the Allianz Group that is one of the top performers in the insurance global market. The Allianz Group, including Dresdner Bank, employs a total of 180,000 people world-wide and is represented in more than 70 countries. Allianz Ireland is owned by the Allianz Group (2/3rds) and Irish Life & Permanent (1/3rd). Allianz Ireland

OUTLINE OF CSR PROVISIONS AND INITIATIVES IN ALLIANZ Allianz has a broad focus in the area of CSR which ranges from various sporting activities such as B2A, Cumann Na mBunscol, Scoil Treasa Naofa Awards, The Allianz Hurling & Football Leagues, support for paralympic athletes, particularly Patrice Dockery, to involvement with Junior Achievement and Business2Arts. Allianz is currently developing a formal CSR policy incorporating all of its CSR activities.

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ATTITUDES AND COMMUNICATION The focus of CSR within Allianz Ireland is the provision of a framework for linking stakeholder requirements into the business strategy and operations while still enhancing corporate reputation. The primary aim of the framework is the development of an understanding of what CSR means for Allianz and how it can add value. Allianz is of the view that CSR must be integrated into the logic of the business, as there must be a business case for it in order to be sustainable as a management practice. To ensure the alignment of company values with stakeholder values, Allianz is of the view that it is important to introduce speak-out processes to allow staff to follow the appropriate channels and internally raise issues of perceived irresponsible behaviour with the company. The company also suggests this activity is important in addition to an open and informal culture or regular communication with line management. Allianz is also of the view that it is necessary to plan ahead and have a programme and implementation plan in place with a global framework that can be fleshed out locally. The company states that it is important that the CSR activities ties in with overall goals and evidence of success can include observable indicators of benefits to business performance and stakeholder relationships. The company further suggests that mechanisms for reviewing the programme and assessing feedback from stakeholder groups can also be implemented. As well as the above activities, Allianz suggests that it is useful to collate comments and get involvement from the board and all business areas, functions and levels in the development of CSR in the company. With regard to implementation, Allianz is of the view that it is useful to publish the programme internally as well as externally to increase general awareness. The company states that training may also be needed for anyone involved in implementing and managing the programme, as well as for employees whose role will be changed as a result. Finally the companys policies and practice must be reviewed and aligned to the new focus of the organisation. For Human Resources, this will include selection and recruitment, performance management; reward systems and employee incentive schemes; and health and safety. Allianz also belives that CSR offers the Human Resource community opportunities to demonstrate its strategic focus.
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EVALUATION AND FUTURE IMPROVEMENTS The argument for HR taking the CSR agenda seriously is summarised by Allianz as follows: companies are increasingly required to take account of the impact of their activities on society; the credibility of CSR is dependent on delivery, not on rhetoric; Human Resources is responsible for many of the key systems and processes (eg recruitment, training, communications) on which effective delivery depends; HR professionals have relevant knowledge and skills in relation to organisational learning and culture change, for example; managing trust and risk raises fundamental issues about how people are managed; and CSR offers the Human Resource community opportunities to demonstrate its strategic focus.

KEY LEARNING POINTS Allianz is of the view that to encourage CSR activities, Ireland needs to have more simplified legislation and a reduction of burdens on small firms. Allianz is also of the view that greater transparency and governance will increase confidence in business and encourage and support responsible business.

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CORPORATE SOCIAL RESPONSI BI LITY

7. CONCLUSION

Corporate social responsibility is an evolving concept that incorporates a wide range of internal and external policies and practices extending from the workplace, into the community, the environment and beyond. It is not a new activity to Ireland as many companies, both large and small, have already been practising CSR, albeit on an informal basis, for years. Generally speaking, the main differences between past and present CSR include: some activities that fall under the remit of corporate governance which are now statutory requirements; an umbrella term has been developed under which CSR activities can now be classified and prioritised; new tools and standards have been developed to encourage reporting of strategies and activities; and the emphasis has changed. Contemporary developments, values and stakeholder expectations have shifted and to survive, companies must reflect these societal, demographic, economic and legislative changes in their operations. Company activities are also scruitinised more closely and an increasing number of organisations are now opting to formalise and communicate their CSR activities through internationally developed tools and standards or through the development of their own. While the trend towards the formalisation of CSR is not

helped by the ambiguity of the concept, nor by the continued amalgamation and complexity of a wide range of issues under the CSR banner, the business case for engaging in this area is strong and is generally accepted and understood. In conclusion, corporate social responsibility emerged as a concept from the business world, and in order to continue to enjoy success and provoke engagement, it must continue to be driven by business. This conclusion is supported by research that has reported that the type and extent of formalised CSR practices are predicated on a number of influences which include but are not limited to the: type of the business; size of the business; sector in which it operates; location(s) of the business; values and demands of the shareholders, staff and local community; local legislation etc. In other words, CSR activities are company specific and to regulate the area would only stife the creativity that is the very heart of CSR. CSR needs to continue to be flexible enough to fit all types of business and the demands of their stakeholders so that companies can continue to focus on their two areas of responsibility commercial and social.

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8. GLOSSARY OF TERMS
The following glossary of terms have been taken from the Glossary of terms in the European Commissions Green Paper on CSR Promoting a European Framework for Corporate Social Responsibility, 2001, p 27.
CAUSE-BASED OR COMMUNITY INVESTING: Supporting a particular cause or activity by financing it through investment. Unlike making a donation, cause-based investors require that the original investment can be returned by either repayment (for loans) or trading (for shares). ENVIRONMENTAL IMPACT ASSESSMENT: Analysis of the impact of a business project or operation on the environment. SHAREHOLDER INFLUENCE: Seeking to improve a companys ethical, social and/or environmental behaviour as a shareholder by means of dialogue, pressure, support for responsible management and voting at annual general meetings.

ETHICAL AUDIT: The application of non-financial, ethical criteria to investment decision.

CODE OF CONDUCT: A formal statement of the values and business practices of a company and sometimes its suppliers. A code is a statement of minimum standards together with a pledge by the company to observe them and to require its contractors, subcontractors, suppliers and licensees to observe them. It may be a sophisticated document, which requires compliance with articulated standards and have a complicated enforcement mechanism.

ETHICAL SCREENING: Inclusion or exclusion of stocks and shares in investment portfolios on ethical, social or environmental grounds.

SOCIAL AUDIT: The systematic evaluation of an organisations social impact in relation to standards and expectations.

ETHICAL TRADE: Aims to ensure that conditions within mainstream production chains meet minimum basic standards and to eradicate the most exploitative forms of labour such as child and forced labour and sweatshops. Labelling criteria are generally based on core ILO conventions.

SOCIAL CAPITAL: The stock of shared meaning and trust in a given community. Social capital is a prerequisite for co-operation and organised human behaviour, including business. Social capital can be transformed, consumed or replenished, just as financial capital.

CORPORATE CITIZENSHIP: The management of the totality of relationships between a company and its host communities, locally, nationally and globally.

ECO-EFFICIENCY: The concept that improving the way in which business uses resources can reduce environmental damage and reduce costs.

FAIR TRADE: Defines itself as an alternative approach to conventional international trade. It is trading partnership that promotes a sustainable development for excluded and disadvantaged producers. It seeks to do this by providing better trading conditions, awareness-raising and campaigning. The criteria for fair trade marked products differ between products but cover issues such as guaranteed prices, prepayment and direct payment to growers or their co-operatives.

SOCIAL IMPACT ASSESSMENT: Systematic analysis of the impact of a business project or operation on the social and cultural situation of affected communities.

SOCIAL LABEL: Words and symbols on products which seek to influence the purchasing decisions of consumers by providing an assurance about the social and ethical impact of a business process on other stakeholders.

ECO-AUDIT: The application of non-financial, environmental criteria to investment decision.

RESPONSIBLE ENTREPRENEURSHIP: A concept put forward by the UN which recognises the business role for the accomplishment of sustainable development and that companies can manage their operations in such a way as to enhance economic growth and increase competitiveness whilst ensuring environmental protection and promoting social responsibility.

SOCIAL REPORT: A document communicating the findings of a social impact assessment.

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9. BIBLIOGRAPHY
Annan, Kofi, 2003, quoted from The Global Compact: The Employers Guide, International Organisation of Employers Business in the Community Ireland, A Step by Step Guide to Integrating Corporate Social Responsibility Across Your Business, 2002 Business in the Community UK, Winning with Integrity-Boardroom Summary, sourced in Business in the Community Ireland, 2002,A Step by Step Guide to Integrating Corporate Social Responsibility Across Your Business, 2000. European Commission, Promoting a European Framework for Corporate Social Responsibility, Green Paper, Employment and Social Affairs, 2001. European Commission, Corporate social responsibility: A business contribution to sustainable development, Employment and Social Affairs, 2002 European Multi-Stakeholder Forum, European Multi-stakeholder Forum on CSR: Final Results & Recommendations, 2004. Grayson, D & Hodges, A, 2001,Everybodys Business Managing Risks & Opportunities in Todays Global Society, Dorling Kindersley sourced in Business in the Community Ireland, A Step by Step Guide to Integrating Corporate Social Responsibility Across Your Business, 2002. IBEC, Corporate Governance and Conduct Guidelines, 2001. IBEC, IBEC Environmental Awareness Campaign, IBEC press release, 1/02/01. International Labour Organisation, Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy, 2001 International Organisation of Employers (IOE), The Global Compact: The Employers Guide, 2003. IOE, Corporate Social Responsibility: An IOE Approach, 2003. ISO Advisory Group on Social Responsibility, Working Report on Social Responsibility, 2004. OECD, Multinational Enterprises and the Public Integrity: The Role of the OECD Guidelines, 2002. OECD, The OECD Guidelines for Multinational Enterprises: Revision 2000, 2000. The Economist, Corporate Social Responsibility: Lots of it About, 2002, sourced in ISO, Working Report on Social Responsibility, prepared by the ISO Advisory Group on Social Responsibility, 2004. Sadler, P, 2001, Management Consultancy: A handbook for best practice, Kogan Page Limited. United Nations Conference on Trade and Development, 1999, The Social Responsibility of Transnational Corporations, NY and Geneva: United Nations, sourced in ISO,Working Report on Social Responsibility, prepared by the ISO Advisory Group on Social Responsibility, 2004 World Economic Forum, Voice of the Leaders Survey, 2004 Annual Meeting Survey

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