About CSR
As we move into the 21st century in an ever-increasing global world, businesses are finding it harder to operate without placing a greater focus on conducting the core business in a socially responsible way, complemented by investment in communities for solid business case reasons. The following definitions of CSR have been proposed by various organisations involved in its practice:
- The World Business Council for Social Development (WBCSD) - The continuing commitment by business to behave ethically and contribute to sustainable development while improving the quality of life of the workforce and their families as well as of the local community and society at large.
- European Commission (EU) - The concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders, in a voluntary basis.
- International Business Leaders Forum (IBLF) - CSR is about promoting responsible business practices which benefit business and society and help achieve social, economic and environmentally sustainable development by maximizing the positive impact business has on society and minimizing the negative.
- ISO 26000 Working Group on Social Responsibility - Social responsibility (is the) responsibility of an organisation for the impacts of its decisions and activities on society and the environment through transparent and ethical behaviour that is consistent with sustainable development and the welfare of society; takes into account the expectations of stakeholders; is in compliance with applicable law and consistent with international norms of behaviour; and is integrated throughout the organisation.
Though the fundamental idea behind CSR is that a corporation or company has a responsibility to society's development beyond the maximization of profit and of shareholder's value, it has been shown that companies that have implemented CSR measures and activities have experienced a range of bottom-line benefits, such as:
- More sound and transparent business practices
- Increasing capacity of managing risks and changes
- Reduced operating costs
- Enhanced brand image and reputation
- Increased sales and customer loyalty
- Increased productivity and quality
- Reduction of wastage and more efficient production techniques
- Increased reliability of suppliers and standardization of products
- Increased ability to attract and retain employees
- Reduced costs from injuries and absenteeism
- Reduced regulatory oversight
- Improved access to capital and license to operate
Due to the increasing awareness of the business benefits related to their social activities, in the recent years there has been a growing interest in businesses in addressing social issues in which they have an interest. In this regard, businesses can also play a key role in addressing those social issues where the government cannot offer a solution or does not have the means to intervene.
Finally, an important distinction should be still made between internal and external CSR practice. Internal CSR refers to all the practices that are to be implemented within the company, such as employee development programmes, health and safety practices, creating a motivating and productive work environment within the organization and reducing the impact of a company's operation on the environment and product responsibility. External CSR is more obvious to assess as it refers to all the company's activities towards the external environment such as projects within the local communities, sponsorships and donations, educational and development programmes, and involvement in the aggregate development of the country.