Corporate Social Responsibility

Corporate Social Responsibility, also known in short as CSR, is becoming a major activity of businesses both nationally and internationally.  CSR is also used interchangeably for other terms such as Corporate Citizenship, Corporate Conscience, Responsible Business,  Sustainable Responsible Business, Corporate Social Performance.

Corporate Social Responsibility is also linked to the concept of Triple Bottom Line Reporting. (TBL) : - People, Planet, and Profit.  TBL is used as a frame-work for measuring a company’s performance against economic, social and environmental parameters.

Corporate Social Responsibility in essence is about building economy, markets, and communities.  It is just a form of self-regulation built into a business model.  CSR is business embracing social responsibilities for the impact of its activities on the environment, consumers, employees, communities, stakeholders, and to everyone in the society at large.  CSR is expected to support public law, ethical standards, and international norms.  CSR  focused business should proactively promote the public interest by encouraging community growth and development and by voluntarily eschewing practices that harm the public sphere. 

The key drivers for corporate social responsibility are:-

Enlightened Self-interest: To create a synergy of ethics, a cohesive society and a sustainable global economy, markets, labor and communities that is able to function well together.

Social Investment:  To contribute to physical infra-structure and social capital which is increasingly seen as necessary part of doing business.

Transparency and Trust: In public perception, business has poor rating.  There is an increasing expectation in public mind that companies should be more open and more accountable and be prepared to report publicly on their performance on social and environmental areas.

Higher Public Expectation of business: The world over companies are expected to do more than merely provide jobs and contribute to the economy through taxes and employment.

A Global Survey in 2002 had concluded that CEOs have failed to recognize the benefits of implementing company social responsibility strategies, despite increased pressure to include ethical, social and environmental issues in their decision making processes.

While companies recognize the value of integrated CSR strategy, most of them are failing to maximize the associated business opportunities.

The World Economic Forum has also recognized the importance of corporate social responsibility by establishing the Global Corporate Citizenship initiative.  This initiative hopes to increase businesses` engagements in and support for CSR, as a business strategy with long term benefits both for companies themselves as well as the society in general.

Questions:

• What is CSR?  What do you understand by it?
• Discuss the key drivers of corporate social responsibility?