Corporate Social Responsibility (CSR)



                                        Definition and tools

                                           What is CSR? 

●      No single definition of CSR

●      CSR has became a buzzword in the 1990s although the trend exists since the 1970s

●      A business must not be concerned solely with its profitability and growth but also
with its social and environmental impact: must pay more attention to concerns of stakeholders
(employees, shareholders, customers, suppliers, communities, civil society) 

●      EU definition: « a concept whereby companies integrate social and environmental
concerns in their business operations and in their interaction with their stakeholders on a
voluntary basis »

                                  Why do compagnies engage in CSR?

New concerns and expectations from citizens, consumers and investors

●       Though a short-term cost for compagnies, CSR policies can be of economic value:

  –     Increase productivity (training, working conditions...)

  –     Reduce reputation risk: avoid consumers campaigns

  –     Reduce legal risks

  –     Minimising risks for investors

  –     Promote investment by SRI

  –     Sustainable development may reduce production costs (better use of natural resources)

●       CSR is mainly promoted by a number of large or multinational enterprises

●       For certain companies, CSR is a strategic investment. companies are investing in
their future and they expect that the voluntary commitment they adopt will help to increase their
profitability. In certain cases, CSR can be a comparative advantage.

                                       The Dimensions of CSR

CSR extends beyond business charity, it involves internal management and external stakeholders.

●       The internal dimension

  –     Human ressources managment

  –     Health and safety at work

  –     Management of environmental impacts and natural ressources used in the production

●       The external dimension

  –     Local Communities

  –     Business partners, suppliers and consumers

  –     Human Rights

  –     Global Environmental concerns

                                    CSR Tools: Codes of Conduct

●       Address a wide range of issues: human rights, the environment...

●       Individual Company Codes of Conduct

●       Model codes or sector specific codes of conduct:

  –     sectoral codes: a group of compagnies + social partners : ex: Voluntary principles on
  security and human rights for the extractive sector or for the retail distribution

  –     multi-stakeholder codes: Ethical Trading initiative

  –     Model codes: AI human rights principles for compagnies, ICFTU basic code of labour practice,
  Fair Labour Association,

●       Aspirational principles: Global Sullivan Principles, Global Compact...

                                             CSR Tools

●      Intergovernmental standards: OECD Guidelines for multinational enterprises, ILO
tripartite Declaration of Principles concerning multinational enterprises and social policy, UN
Norms... 

●      Other CSR tools:

  –    Reporting framework: the Global Reporting Initiative (GRI)

  –    Rating indices: own rating indices used by SRI agencies, Dow Jones Sustainability Index,
  FTSE4Good index

  –    Certification schemes: SA 8000

                                  Benefits and limitations of CSR

●      Advantages:

  –    a first step towards responsible behaviour

  –    useful tools to monitor companies' behaviour and to advocate for a more responsible behaviour

  –    dialogue with stakeholders has developed

●      Limitations:

  –    voluntary initiatives only

  –    multiple standards: lack of harmonisation

  –    lack of external monitoring

➔      Most committed companies are not necessarily those recognised as such by public and
consumers

                               Why should CSOs and TUs get involved?

●      Transnational corporations (TNCs) are often more powerful than States

●      TNCs do have an impact on human rights and on the environment

●      TNCs benefit from virtual large-scale impunity

●      CSR is voluntary, no common rule, no external monitoring

●      Subjective interpretation of their obligations by companies rather than respect of
universal principles

●      CSR is often mere Public Relations : what we need is Corporate accountability!

                                        For further reading

●       Promoting a European framework for corporate social responsibility, Green Paper,
Employment, Social Affairs and Equal Opportunities, European Commission, 2001.

●       Mapping instruments for Corporate Social Responsibility, European Commission, April
2003

●       Report of the United Nations High Commissioner on Human Rights on the
responsibilities of transnational corporations and related business enterprises with regard to human
rights, Commision on Human Rights, 61^st session. http://www.ohchr.org

●       Goal, Ran, Guide to instruments of Corporate Responsibility, October 2005.