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Corporate Social Responsibility

corp2Corporate Social Responsibility or CSR is a strategic undertaking through which companies exercise responsibility and accountability for the economic, social and environmental impact of their business decisions and behaviours. King III describes it as “the responsibility of the company for the impacts of its decisions and activities on society and the environment through transparent and ethical behaviour that: contributes to sustainable development, including health and the welfare of society; takes into account the legitimate interests and expectations of stakeholders; is in compliance with applicable law and consistent with international norms of behaviour; and is integrated throughout the company and practiced in its relationships”.    

There are different types of CSR application / orientation that may be categorised as philanthropy, corporate social investment (CSI) or Strategic CSR. Philanthropy is altruistic and designed to promote the good of society.  It expresses the concern for human welfare and advancement, usually manifested by donations of money, property, or work to needy persons.  In a CSR context, corporate philanthropy can take the form of monetary contributions or corporate volunteer programmes, lending staff and technical experience to non-profit organisations or other societal institutions.

CSI in the context of developing economies is intended to go further and seeks internal alignment with a company’s core business in terms of products or services and external alignment with the broader socio-economic priorities and systemic deficiencies in the wider business context. 

Corp social responsibility104Strategic CSR entails a more holistic and strategic approach to business engagement with society.  It is not only interested in how business can be a force for good in society, but also in what the essence of good business is all about.   It goes beyond a focus on community benefaction and includes responsible action in the areas of workplace, marketplace and environmental practices as well.  To the extent that strategic CSR becomes part of defining the value system inherent to the core business of a company, it also gets embedded in policy, adherence to legislation and commitment to national and global codes of action.

From the above it is clear that philanthropy, CSI and strategic CSR are both distinct and belonging to the same field of meaning.  In companies, they often represent a trajectory of progress starting with philanthropy and evolving and broadening the boundaries from there towards CSI and strategic CSR.

CSR is primarily expressed in four areas of application, namely:

  1. Workplace:  through the internal functioning of companies with reference to workforce issues such as working conditions, health and safety, equal opportunity, remuneration and benefits, off-shoring and HIV/AIDS;
  2. Marketplace:  with respect to the kinds and quality of products that a company produces, how and from where the resources for these products were procured and the impact of these products in terms of health and safety on consumers and society.  Markets include consumer markets, financial markets and business-to-business markets;
  3. Environment:  through the prevention of pollution, waste management, energy conservation and recycling, and also deals with corporate strategies towards climate change, biodiversity and resource security, and
  4. Community:  in terms of donations to good causes, e.g. community groups, educational initiatives, sporting associations, youth groups, health programmes and the arts, as well as involvement in local development initiatives.  This kind of corporate giving is often linked to marketing and branding.

csrFrom an internal point of view, a company may choose to align its CSR focus with its core business and how it wants to interface with the communities in which it operates. From an external point of view, a company may perceive areas of need in society from which the company will also benefit, should it decide to invest in such an area. Combined, the internal and external considerations may result in CSR involvement in sectors such as education, health, environmental protection.

 

 


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