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Scvo Equalities Briefing - September 2005
What is
Corporate Social Responsibility
(CSR)?
"business decision making linked to ethical
values, compliance with legal requirements, and
respect for people, communities and the
environment (and)
operating a business in a manner that meets or
exceeds ethical, legal commercial and public
expectations that society has of business"
New Economics Foundation
“The
Government sees CSR as the business contribution
to our sustainable development goals.
Essentially it is about how business takes
account of its economic, social and
environmental impacts in the way it operates –
maximising the benefits and minimising the
downsides.
Specifically,
we see CSR as the voluntary actions that
business can take, over and above compliance
with minimum legal requirements, to address both
its own competitive interests and the interests
of wider society.”
UK Government website
“In simple terms, companies make loud, public commitments to
principles of ethical behaviour and undertake
'good works' in the communities in which they
operate”.
‘Behind the Mask: The real face of CSR’ Christian Aid
The model of ‘The Business in Society’ developed
by Mallen Baker provides more detail as to the
various business considerations that CSR can
relate to and thereby provides an idea of its
potential scope. See resources section for a web
link.
To most people the word ‘corporate’ or
‘corporation’ suggests ‘big’ and the popular
image of CSR remains associated with national or
multinational companies acting at a national or
international level. Yet there is scope for all
businesses to act in a way that would be part of
the CSR spectrum. For example, most people
wouldn’t think of a donation by local DIY store
of some paint for the local youth club as CSR
but if a giant high street DIY chain offers free
paint for local charities all over the country
it begins to sound more like CSR. When
considering what CSR means in practice for you
it can be useful to remember this.
Why is CSR important to the voluntary sector?
CSR in one form or another is happening to
people right now, locally, nationally and
internationally. Punch the phrase into an
internet search engine and you’ll be deluged
with links. Many businesses want to ‘do CSR’ and
many governments want businesses to do it. There
is a UK minister for CSR, (currently Malcolm
Wicks MP) and the DTI has founded a CSR academy
for businesses to learn all about it. Some see
CSR as a potential tool to help achieve the UN’s
Millennium Development goals and the European
Commission has a Multi-Stakeholder Forum on CSR.
The voluntary sector is involved with CSR as
well but there is no single ‘voluntary sector
position’. Different organisations make use of
it, support it or attack it depending on the
circumstances. This is largely because there is
a great deal of debate and controversy about
what it actually involves in practice. It is
very difficult to talk about CSR without taking
this into account.
The Debate
The debate is not new and to a degree it is
shaped by the political stances of its
protagonists. This briefing summarises it. Those
who wish to investigate it in more detail should
check out the resources section and follow up
the links.
On the one hand
-
CSR can provide opportunities for staff to
do voluntary work and put something back
into the community within which their
business functions (e.g. mentoring schemes,
‘clean ups’, volunteering directly with
local projects).
-
CSR can provide support to individuals or
the voluntary sector locally or nationally
(e.g. ‘gifted child’ awards, free business
advice or services to organisations, free
equipment, sponsoring local or national
initiatives, working in partnerships,
providing grant funds or match funding).
-
CSR can mean working with the state to build
infrastructure like schools, hospitals or
ensure a supply of clean drinking water or
making better use of natural resources.
-
CSR can mean better conditions and benefits
for the workforce (parental leave, proper
sick pay, decent wages).
-
CSR is good for business because behaving
ethically makes for good public relations,
creating a better image and reputation. That
in turn can attract financial investment
(ethical investment is big business these
days), more custom and quality staff (in a
competitive recruitment market). Social
involvement can improve staff morale and job
satisfaction (businesses increasingly report
that it is the wishes of their staff to work
for an ethical company that drives CSR as
much or more than the wishes of their
customers). Good practice in terms of
environmental protection and recycling, for
example, can reduce waste and keep costs
down. This all adds up to improved quality,
efficiency and productivity which in turn
impacts on the core business of the company
making it more competitive and more
successful.
-
It is naïve to imagine that business and the
private sector are not as integral a part of
developed societies as any other part of the
socio-economic fabric. Large companies wield
great economic power and harnessing that
power for beneficial social change must be
worthwhile. It is simplistic to imagine that
sector to be peopled by heartless Dickensian
capitalists who exploit ‘the workers’ solely
for their own economic
aggrandisement.
Wealth generation is not a bad thing and the
private sector is infinitely diverse
involving millions of people at all levels –
including individuals considered to be
members of ‘equality groups’ who are
successful entrepreneurs, big business
people or otherwise involved. Their wish to
make a better world cannot be dismissed
anymore than anyone else’s.
On the other hand
-
Voluntary work by individual members of
staff as part of a CSR scheme might well be
a good thing but that often involves small
scale activity that does not interfere with
or relate to the company’s core business.
For example, staff from an insurance company
may help to repair a vandalized community
centre while at the top of the same company
decisions are being made that will prevent
that centre from ever being able to afford
the next round of premiums because it’s so
badly at risk of being vandalized.
-
Supports such as those mentioned are a drop
in the ocean compared with the enormous
profits many companies make. If profits dip
such ‘extra-curricular activities’ are first
for the chop. Besides many companies’ core
business flies in the face of the community
activity they sponsor. For example, fast
food stores supplying local teams with
football strips.
-
Better conditions for the workforce are only
ever introduced in an attempt to increase
productivity. Business traditionally resists
any such improvements that might hamper its
ability to make money. Look at the
resistance to proposals for fathers to be
entitled to six months paternity leave or
the panic about disability access
-
In the developing world companies provide
short term and ill conceived sweeteners to
governments in return for being able to
plunder their natural resources. How many
companies invest socially in countries in
which they have no commercial interest?
-
CSR is good for business only insofar as it
means making a profit. Companies are only
and have only ever been involved in CSR for
this entirely self interested reason. If it
didn’t benefit them in this way they
wouldn’t do it. Looking for good PR means
looking for uncontroversial causes to
support: babies and animals win, people with
learning difficulties and the LGBT community
lose.
-
Complex societies are built on simple
foundations. Sweat shop child labour is a
current reality not something out of Oliver
Twist. There is a difference between wanting
to be financially secure – or even well off
– and the mind boggling runaway greed
exhibited by those in charge of some large
companies. The business of business creates
and perpetuates the inequalities in society
that huge sections of the voluntary sector
spend most of their time combating There is
an inescapable paradox at the heart of CSR
which will forever render it a sham.
So it’s a heated debate?
Just a bit.
But what has any of this got to do with
equalities?
Equality and inequality are social issues. Some
argue that CSR could be a mechanism for
addressing them.
-
CSR means resources for the voluntary
sector. If you can convince a business that
your cause is worth investing in it means
you can do something about it –or do more
than you were already doing.
-
The voluntary sector can use the idea of CSR
to achieve its aims aside from the resources
question. If it can make the business
case for companies to adopt policies and
practices that address equality issues and
it can be demonstrated that they are a
success in business terms then it is both
good for the business and good for equality.
High profile success stories do act as an
encouragement. Widespread adoption of
successful practices can only benefit those
groups affected by poor practice or
prejudicial attitudes. It may well be that
setting regulation might remain the preserve
of local and national government but the
best practice upon which it is based can
come from any sector. The economic power
that some companies have could be used to
force governments to introduce and enforce
better equality measures in law. Could an
‘equality impact assessment’ become as
widespread as environmental impact
assessments have? Partnerships and contracts
could also include measures that help
promote and implement equality measures.
-
If voluntary organisations are concerned
that there is a paradox at the heart of CSR
(in terms of the primary business driver
being profit) then perhaps they can
increasingly encroach upon the private
sector’s sphere and use business models to
generate their own ‘profits’ - which can
then be used for charitable ends rather than
for shareholder gain. Think ‘social
economy’. Charity shops are the most famous
example but there’s no reason for the sector
to stop there. Rather than persuade business
to support your cause, simply establish a
business and practice what you preach!
So is CSR a realistic proposition for tackling
equalities issues?
It depends on your view of CSR. Some people will
argue that the paradox of CSR is too great.
Others will argue that it is unrealistic to
accuse the entire private sector of acting
unethically and you can work with much of it
with a clear conscience. Many voluntary
organisations are charities and the notion of
charity is partly founded on the idea of private
action leading to public benefit. CSR could be
considered just such a form of private action.
Conclusion
The debate about the true nature of CSR shows no
signs of cooling down but nor does CSR show any
immediate signs if going away. Whichever side of
the argument you come down on a greater
understanding of CSR can only help you and your
organisation when you are planning for your
future and looking for ways to maximize your
impact.
Resources
New Economics Foundation
www.neweconomics.org
UK Government & CSR
www.csr.gov.uk
Christian Aid
www.christian-aid.org.uk
Mallen Baker
www.mallenbaker.net/csr
The Business in Society model
http://www.mallenbaker.net/csr/CSRfiles/definition.html
Agenda (A Forum to evolve and promote an
inclusive agenda
for social responsibility throughout Scotland)
www.agenda-scotland.org
To obtain this document in alternative formats
please contact Andrew Jackson Tel 0131 474 6183
email
andrew.jackson@scvo.org.uk |
