Why it pays to care about CSR
The implementation and measurement of an organisation’s Corporate Social Responsibility (CSR) is an increasingly important field. There are many different definitions of what CSR entails, but broadly speaking it’s the way in which companies work towards social, environmental and economic goals that contribute towards society as a whole. Another term is ‘triple bottom line reporting’, as coined by the author John Elkington who defined it as the accounting of business performance in terms of the impact on the economy, the environment and society.
Transparency and adhering to legal requirements form the basis of any CSR policy, but beyond that are commitments over and above the law concerning areas such as human rights, community involvement, philanthropy, employee volunteering schemes and relations with domestic and international suppliers. It’s crucial that these activities and values are integrated into the corporate culture, because firms perceived to be paying lip service to their CSR can do a great deal of harm to their public image and their brand.
When implemented properly though, reputation management becomes the most obvious benefit of CSR, particularly for high-value retail brands who not only have to be aware of their own social responsibility, but that of their supply chain partners too, as several high profile cases involving fashion and electronics companies have proven. International monitoring groups can report unethical practices almost instantly and dealing with the fallout from these scandals is a costly and damaging business. Employee relations can benefit as a result of CSR as well, making it easier to attract and retain staff. It’s also a field in which companies can differentiate themselves from their competitors, with a report by the UK Small Business Consortium finding that 88% of consumers said they were more likely to buy from a company that engages in activities to improve society.
CSR does have its opponents, with the most notable being the economist Milton Friedman who in 1970 argued that companies pursuing any other goal other than that of maximising profit were subverting the role of government and harming the foundations of a free society. That’s widely seen as quite an outdated and narrow viewpoint now though. The European Union’s Employment and Social Affairs Committee actively promotes CSR throughout its member countries while in the United States laws have been relaxed in some states to allow boards of directors to make decisions based on factors other than the increasing of shareholder value.
Sceptics also argue that the lack of clear parameters make it difficult to measure just how well any given company is performing in terms of their CSR, but efforts are being made to remedy that situation. The Global Reporting Initiative, for instance, a non-profit organisation founded in 1997, have developed a set of reporting tools – the Sustainability Reporting Framework – that is used by companies around the world to measure their economic, environmental, social and governance performance. Further information about CSR jobs can be found at PRWeek Jobs.