CSR

• Social responsibility


  An idea that suggests that organizations behave ethically and with consideration to social, cultural, economic, and environmental issues
• Stockholder or Shareholder Theory (Classical Model)

  Companies exist to serve the interests of their stockholders or shareholders, and their primary obligation is to make as much money as possible as long as their practices conform with the law
• Invisible Hand


  A metaphor used in economics to describe the unintended social benefits of an individual's pursuit of his/her interest
• The Stockholder or Shareholder Theory has been frequently criticized for its supposed self-serving goal of profit maximization
• Stakeholder Theory

  A company should be responsible, not just to its shareholders but to its stakeholders as well
• Stakeholders a business needs to be answerable to

  • Employees
  • Suppliers
  • Regulators
  • Financiers
  • Competitors
  • Customers
  • Media
  • Society
• Corporate Social Responsibility (CSR)


  A concerted initiative to contribute to sustainable development through efforts that are economically, socially, and environmentally beneficial to stakeholders

  
• Pyramid Model of Social Responsibility

  Emphasizes the level of expectations of the people comprising the four social responsibilities: economic, legal, ethical, philanthropic
• Many companies now espouse Corporate Social Responsibility (CSR), which recognizes corporations' economic, legal, ethical, and even philanthropic responsibilities today

  
• Sustainable Development Goals

  The blueprint to achieve a better and more sustainable future for all, addressing global challenges including poverty, inequality, climate, environmental degradation, prosperity, and peace and justice
• How businesses can contribute to the attainment of the SDGs

  • Enhances reputation among stakeholders
  • Better customer relations
  • Attract and retain employees
  • It's the right thing to do
• Cons of CSR

  • Costs money to implement
  • Conflicts with the Profit Motive
  • Customers are careful about Greenwashing / Public Relations ploys
  • Many businesses put the cost on consumers
• Greenwashing


  Making an unsubstantiated or misleading claim about the environmental benefits of a product, service, technology, or company practice
• Common Activities Related to Corporate Social Responsibility

  • Establishment of Certifying Bodies
  • Training employees for consumer care and people skills
  • Improvement of Compensation and benefits packages for employees
  • Establishment of programs for the protection and preservation of the environment
  • Active participation in socio-civic and charitable activities
  • Development of customer complaint desks or hotlines
  • Recruitment of competent and technical employees
  • Training quality people
  • Application of good manufacturing practices and advance quality assurance standards
  • Strengthening ties with agencies and creating organizing bodies
• Triple Bottom Line

  Illustrates that if an organization is only focused on generating profit—and not addressing the negative impacts they might have made on communities and the environment—it cannot account for the full cost of doing business and thus will not succeed in the long run
• Three Ps of the Triple Bottom Line


  • People
  • Planet
  • Profit
• People (in the Triple Bottom Line)

  The societal impact of a company/business and/or its commitment to building a better society
• Planet (in the Triple Bottom Line)


  How businesses manage, monitor, and report resource and energy consumption and waste and emissions output
• Profit (in the Triple Bottom Line)

  Sustainable practices will also drive better revenue, and firms with promising environmental, social, and governance (ESG) metrics tend to produce superior financial returns, which will attract investors
• Milton Friedman - proponent of Stockholder Theory
• Stakeholders are individuals or groups who can affect or be affected by the achievement of an organization’s objectives.
• Adam Smith - proponent of Invisible Hands
• Edward Freeman - proponent of Stakeholder Theory
• Value created for stakeholders must not resort to tradeoffs and that a great company can align stakeholders' interests with its mission
• Archie Caroll - Pyramid of Social Responsibility
• Economic - the baseline and that company must ear profits
• Legal - company should operate within the bounds of the law
• Ethical - company must be ethical with its operations
• Philanthropic - company has an obligation to give back to society
• People + Planet = Bearable
• People + Profit = Equitable
• Planet + Profit = Viable
• People + Planet + Profit = Sustainable
• Corporate Social Responsibility (CSR) refers to how companies manage their business practices, taking into account their impact on society and the environment.
• Social Responsibility is the idea that businesses have obligations beyond making profits.
• The Triple Bottom Line (TBL) approach considers three dimensions of performance: financial, social, and environmental.
• People - Create a better society; external
• Planet - how businesses manage, monitor, and report resource and consumption
• Profit - produce gains that attract investors