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What is Corporate Social Responsibility?

1.1. CSR within the European Union


In short Corporate Social Responsibility (CSR) describes the general responsibility of a company for sustainable management in an economical, ecological and social respect. The multitude of companies and markets results in different interpretations of the term. As an orientation guide, CSR is defined as follows by the European Commission: "Corporate Social Responsibility (CSR) is a fundamental concept designed to help companies integrate social and ecological concerns into their corporate activities and relationships with stakeholders."

Learning targets Get to know the CSR definition of the EU commission Be able to clearly illustrate the CSR management concept

CSR learning contents In 2001, the European committee published a Green Paper on CSR entitled "European framework conditions for corporate social responsibility (CSR)". The definition of CSR contained therein has established itself in the economic, social and political discussion. It reads as follows: "Corporate Social Responsibility (CSR) is a fundamental concept designed to help companies with the voluntary integration of social and ecological concerns into their corporate activities and their relationships withstakeholders ." This definition of CSR describes the responsibility of companies on three pillars of sustainability (1.) Economy/"Profit", 2.) Social affairs / "People" and (3.) Environment / "Planet" (so-called triple bottom line). An easily interpretable triangle can be formed comprising "People / Planet / Profit" as vertices (see diagram). This triangle can be considered in companies to symbolise effects on the economy, social affairs and the environment. CSR management integrates social and ecological goals into the corporate activities in such a way that the economic success can be combined with the benefit for the society and the environment (so-called win-win situation).

InnoTrain CSR www.csr-training.eu

The project "InnoTrain CSR" is organized by GILDE GmbH and has been funded with support from the European Commission. This publication reflects the views only of the author, and the Commission cannot be held responsible for any use which may be made of the information contained therein. 12/2010

Kellogg School of Management

The crucial element of the CSR definition from the European Commission is the voluntariness of the concept. It highlights advantages and disadvantages for the implementation of CSR: On the one hand, the principle of voluntariness emphasises that CSR is supposed to go beyond the statutory provisions. Thus, CSR is supposed to make an additional social and economical profit possible. In addition, it is preferable if companies can decide by themselves what can socially and economically be improved aside from complying with the statutory provisions. This allows companies to focus CSR closely on their main line of business and to develop an individual strategy. However, on the other hand CSR may be criticised as an empty phrase or "Greenwashing" of public relations because of the lack of a legally binding character for the implementation of CSR due to its voluntary character. As an additional characteristic of the EU definition, CSR integrated into corporate activities is not so much focusing on the extent the generated profit is used for socially or ecologically relevant purposes. In fact, integrated CSR means that all processes capable of generating a profit are socially and ecologically sustainable. Consequently, CSR should refer to the entire life cycle of products and services (e.g. product development, value added chain, life span and recycling). The following statement by Kellie McElhaney, director of the Centre for Responsible Business at the University of California, brings it to the point: "CSR is not about how you spend the money you make. It's about how you make the money you spend." Moreover, a credible and sustainable CSR concept covers all functions within the company. In order to have the path for achieving this understood less as cost-related expenses but rather as an investment into an improvement process, comparable for example to investments into quality management, the stakeholders (so-called interested parties in the company) play a key role: In the process of the CSR strategy, a systematically managed stakeholder dialogue activates all groups and stakeholders who (potentially) have a real impact on the latitude of a company.
InnoTrain CSR www.csr-training.eu

The project "InnoTrain CSR" is organized by GILDE GmbH and has been funded with support from the European Commission. This publication reflects the views only of the author, and the Commission cannot be held responsible for any use which may be made of the information contained therein. 12/2010

Additional information and resources Green Paper entitled "European framework conditions for corporate social responsibility in the EU (CSR)" European Commission, Brussels, 18-07-2001, KOM (2001) 366 English Version: http://eur-lex.europa.eu/LexUriServ/site/en/com/2001/com2001_0366en01.pdf German Version: http://eur-lex.europa.eu/LexUriServ/site/de/com/2001/com2001_0366de01.pdf Portuguese Version: http://eur-lex.europa.eu/LexUriServ/site/pt/com/2001/com2001_0366pt01.pdf

InnoTrain CSR www.csr-training.eu

The project "InnoTrain CSR" is organized by GILDE GmbH and has been funded with support from the European Commission. This publication reflects the views only of the author, and the Commission cannot be held responsible for any use which may be made of the information contained therein. 12/2010