What is corporate social responsibility?

Definitions

Corporate social responsibility has many and varied definitions.
The European Commission, in their Green Paper "Promoting a European Framework for Corporate Social Responsibility ", define it as a "concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis."

On a simpler note:
"Corporate Social Responsibility are actions which are above and beyond that required by law". McWilliams & Siegel

At Response we prefer to see things more simply; we see it as "doing the right things right" to borrow Eric Mazur's phrase.

Although there are many examples of complicated matrices, metrics, models and flow charts that purport to help companies to move forward in this area, corporate social responsibility is, in our view, simply a question of good management which takes a holistic view of an organisations' roles and responsibilities.

Corporate Social Responsibility is one of the most important issues affecting the business world today. It is not about 'doing good', it is not even about being seen to be doing good, it is about recognising a company's responsibility to all its stakeholder groups and acting in their best interests.

Drivers of corporate social responsibility

Recognition of corporate social responsibility as an important part of business behaviour has increased enormously in the last few years.
The drivers of this are varied and include new requirements of transparency and sustainablity with global and national initiatives on environmental,economic and social accountability.

Corporate social responsibility has become such a key issue that the American lecturer and writer Ian Wilson has said:

"In retrospect from the vantage point of 2010, it may be only a slight exaggeration to say that ethics have come to be on a par with economics as the primary criterion for evaluating corporate performance".

This may seem far fetched, but the Socially Responsible Investment Forum represents a substantial and growing number of institutional investors. Occupational Pension Funds are now obliged to disclose whether they are investing according to socially responsible principles and the Association of British Insurers has recently issued guidelines to promote uniform disclosure on social, environmental and ethical risk.

The rise in ethical consumerism, measured by the Co-operative Bank, shows that 'ethical purchasing' is growing more than six times faster than the overall market for non-financial products and that with ethical investments and banking included, there is a growth rate of 20%. Total activity amounted to £13.4bn in 2000 and is considerably greater today. The growth in recycling, organic food purchase, the growing awareness of food miles and individuals' carbon footprint are testimony to the increase in consumer awareness about living responsibly.

With the rise in the importance of 'non-market forces' such as the anti-globalisation movement, GM protesters, greater feelings of wanting to be part of a community (particularly evident in the wake of September 11th), companies can no longer afford to ignore the issues at the heart of corporate social responsibility.

Reputations can be swept away alsmost over night as some of the largest global corporations have recently discovered.
Integrity, responsibility, engagement and transparency did not form the bedrock of these companies and they have paid the price for it.