Corporate Social Responsibility (CSR) concept and roots
The Financial Times defines Corporate Social Responsibility as; “a business approach that contributes to sustainable development by delivering economic, social and environmental benefits for all stakeholders.” Many people believe that businesses should help with social issues as they have the means to do so.
Over the decades this concept has continued to develop since first emerging before WWII with examples going back to the Victorian era (the Cadburys family). The idea guides businesses to not only think about their employees and customers but society as a whole
Was this the result of a changing society?
CSR really flourished at the time when social movements started to catch wind. This was the ‘swinging sixties’ when certain social movements were born, these being:
- Civil Rights – 1954
- Women’s Rights – 1948
- Consumer’s rights – 1960
- Environmental Movements – 1960
Such activist groups lead to a changing social environment which in turn added pressure to businesses to adopt greater corporate social responsibilities & attitudes. More and more pressure from external forces such as consumers, has created a stronger demand for ethical and responsible business, whereby businesses are realising they (HAVE TO LISTEN TO THEIR CUSTOMERS) must incorporate this.
Businesses such as the Co-Operative, believe that in addition to the pursuit of profits, businesses should also be responsible for their worker’s communities and other stakeholders, even if this requires a sacrifice to their bottom line.
Were Cadburys the pioneers of CSR?
The Cadbury family believed that all human beings should be treated equally and live in peace (an ideal way of thinking?) this of course would be a dream world as peace and equality are desired by a majority of people, although companies still exist where child labour and the exploitation of people in third world make up their “cheap” workforce, and obviously extremist groups who hold their radical beliefs above peace.
George Cadbury (son of one of the founding brothers) was driven by a passion for social reform and wanted to provide good quality, low-cost homes for his workers in a healthy environment. This was to give an alternative to grimy inner-city life at the time.
George dedicated one-tenth of his Bourneville site (referred to as ‘the factory in the garden’) and laid out space for parks, recreation, and open space. Through initiatives like these, the brothers had set new standards for working and living conditions.
George’s second wife Elizabeth was also involved in philanthropy, together they built and opened woodlands hospital in Northfield and built The Beeches where children from the city slums could holiday.
This was one of the first signs of a business going way beyond what was required for workers and society without the sole incentive of financial gain. (Cited from J.Ella, BBC)
What’s in it for you?
Developing a CSR strategy can be a great business move, Google demonstrates a good example of this as they have achieved an average of a 15% drop in power requirements within their data centres. This has been done by incorporating a new technology that is capable of managing energy outputs in the most efficient way (it’s been proven to be more efficient than humans handling this manually). Due to the success rate of the test, Google plans to install this system into all of its data centres worldwide! Reducing their carbon footprint significantly, as the system allows 3 times a greater output for the same amount of energy. (reducing some serious energy bills)
There are many more advantages your business can take too;
1. Reduce cost and risk; Unilever have increased their growth & profit through the implementation of their sustainable living plan through eco-efficiency measures, Unilever has saved a cumulative cost avoidance of €400 million in its factories since 2008.
2.Strengthening legitimacy and reputation; by demonstrating that the business can meet the needs of its stakeholders whilst at the same time making a profit – utilised by the Co-Operative group who have put ethics and CSR at the forefront of their business – turning down profitable opportunities to remain ethical.
3. Gain a competitive advantage; by adopting certain CSR activities a firm may be able to build strong relationships with its stakeholders resulting in lower levels of employee turnover. According to (The Guardian) businesses can gain access to a higher talent pool which is due to the nation’s young, politically engaged job seekers who hold ethics in a much higher regard, due to the emphasis that has been placed on CSR over the decades. Almost half of the (young jobseekers) workforce, (42%) would want to work for an organisation that has a positive impact on the world.
4.Creating a win-win situation through synergistic value creation; the concept suggests that through two organisations working together for a mutual benefit certain opportunities may arise that would otherwise have never been available. In basic terms this is the idea that two organisations working together will create a better output than each company as a lone entity.
CEO of Unilever Paul Polman states that “in a volatile world of growing social inequality, rising population, development challenges and climate change, the need for business to adapt is clear” and “consumers are recognising this too, increasingly demanding responsible business and responsible brands”
How Small Medium Enterprises (SMEs) can adopt CSR
Adopting a CSR strategy doesn’t require mass resources or funds. We have a checklist with notes of what our company (Johnston Vere) tries to implement:
Firstly for example, a business could look at what environmental initiatives could be adopted;
- Reduce energy consumption (energy saving lightbulbs in every room at JV)
- Use recycled materials (all paper & plastics at JV is recycled)
- Consider using video conferences rather than travelling to see someone (whenever viable)
How could your business improve human resource management practices?
- Establish health & safety policies
- Involve employees in key decisions that affect them (during Friday meetings all ideas are shared and discussed, everyone’s voice is heard and an anonymous suggestion box is on standby for the quieter employees)
- Provide training opportunities and mentoring to maximise promotion from within the organisation (every new JV employee has the opportunity to develop & progress)
- Encourage a healthy workplace (time away from desks, lunch-time breaks and organised social events)
How could your business prompt diversity and human rights?
Make sure staff are aware of policies against discrimination
- Pay competitive wages for comparable work (with financial incentives & rewards – JV offer an achievable bonus system)
- Support charities that support human rights compliances (Educate Ethiopia, Ormskirk blind school, Macmillan & Headway have benefitted from fundraising at JV)
Aiding the community:
- Encourage employee volunteering in the community along with financial contributions
- Look for opportunities to make redundant equipment available to local schools & charities
- Buy from local suppliers and hire locally (we attempt to hire locally as well as sourcing materials)
- Offer quality work experience for students (thankfully for me or I wouldn’t be writing this!)
- Use business experience to help local charities become more efficient and entrepreneurial (Sefton have benefitted from JV help)
- Use some of the marketing budget / resources to associate the brand / business with a social cause.
As a global recruitment consultancy our consultants have targets which they must meet. We are rolling out a new initiative to keep our workforce motivated whilst aiding a good cause. We will do this by;
- making teams of around 3 consultants
- each team picks a charity
- each placement earns £10 for their charity
- At the end of the year we will present the charities with cheques
This will provide a responsible win-win for both us here at JV and the charities selected by our teams!
In General:
- Share CSR lessons learned with other businesses, customers etc via social media
- Explain the social, economic, and environmental performance of the business to stakeholders and other businesses – websites, blogs etc
- Blow your own trumpet – spread the word
- Shout out your success
- Encourage staff to think about others
- Responsible businesses should be at the forefront of every organisation
- No matter how big or how small, ANY business can partake in CSR
- We all have a duty to look after the world, living & working with sustainability in mind.