What is CSR?
Corporate Social Responsibility (CSR) refers to operating a business in a manner that accounts for the social and environmental impact created by the business. CSR means a commitment to developing policies that integrate responsible practices into daily business operations, and to reporting on progress made toward implementing these practices.
Common CSR policies include:
- Adoption of internal controls reform in the wake of Enron and other accounting scandals;
- Commitment to diversity in hiring employees and barring discrimination;
- Management teams that view employees as assets rather than costs;
- High performance workplaces that integrate the views of line employees into decision-making processes;
- Adoption of operating policies that exceed compliance with social and environmental laws;
- Advanced resource productivity, focused on the use of natural resources in a more productive, efficient, and profitable fashion (such as recycled content and product recycling); and
- Taking responsibility for conditions under which goods are produced directly or by contract employees domestically or abroad.
In the past decade great strides have been made toward integrate CSR into the core culture of major companies. Blue chip companies such as Chevron, Texaco, General Electric, Microsoft, and Hewlett Packard have publicly committed to CSR and regularly report on CSR performance. Some European governments require companies to report on their social and environmental performance. Companies compete to be included on Fortune's annual list of the best companies to work for and to pass the screens of social investment funds.
"Some see this work as charity, philanthropy, or an allocation of resources that could better be donated by shareowners themselves, " writes Debra Dunn, Hewlett Packard Senior Vice President for Global Citizenship in the company's 2005 global citizen report. "But to us, it is a vital investment in our future, essential to our top-line and bottom-line business success."
Early CSR reports often focused on philanthropy as a driver of CSR. That notion has been supplanted by a broad commitment to protecting and improving the lives of workers and the communities in which companies do business. CSR reports now typically address issues impacting virtually every area of operations: governance and ethics; worker hiring, opportunity and training; responsible purchasing and supply chain policies, and energy and environmental impact.
Sustainability and CSR
Emphasis on social environmental and economic sustainability has become a focus of many CSR efforts. Sustainability was originally viewed in terms of preserving the earth's resources. In 1987, the World Commission on Environment and Development published "Our Common Future," a landmark action plan for environmental sustainability. The commission defined sustainability as "meeting the needs of the present without compromising the ability of future generations to meet their needs." Companies are now challenged by stakeholders including customers, employees, investors and activists to develop a blueprint for how they will sustain economic prosperity while taking care of their employees and the environment.
(Ref: as you sow)