Corporate Social Responsibility (CSR) / Corporate Citizenship

Corporate social responsibility is also known as corporate conscience, corporate citizenship or responsible business. In essence it has four main strands.

1. Ethical issues

CSR is a great platform for ethical corporate self-regulation being integrated into a business model. Good examples include

  • A major jewellry retailer having a strict policy not to use so-called conflict diamonds from Sierra Leone in West Africa. There locally mined diamonds are often used to barter or buy weapons for the ongoing civil war.
  • Coffee shops using only Fair Trade branded coffee – a strategy used extensively in Colombia and Bolivia to ensure coffee growers get good returns on their coffee beans and are not exploited by global coffee roasters such as Nestle or Douwe Egberts.
  • The global apparel industry struggles with the ethical dilemma created by the general public’s wish for cheap clothing fueling the scandalous low labour rates, child exploitation and poor working conditions in Bangladesh and other low cost producers

2. Environmental Reasons

High on the list for business CSR practices are ones for environmental reasons such as IKEA’s use of wood only obtained from sustainable forests. This is direct contrast to the anarchic deforestation of the Amazon basin for hardwoods, a global scandal in need of urgent action.

Similarly, many industrial companies are interested in reducing their carbon footprint i.e. the amount of carbon dioxide released into the atmosphere as a result of their business activities.

Transport and logistics companies are well aware of this issue; for instance the transport of construction materials accounted for approximately 30% of total emissions from the construction industry in England in 20101. Applying efficient logistics principles, such as back loading [not running lorries empty] helps reduce costs and un-necessary emissions.

3. Philanthropy

The third strand to CSR is philanthropy or organisational giving. The monies raised internally can be for a local / national charity or an internal foundation that does good things in their local community. And that money from the company, staff and clients / customers can be raised in a myriad of ways – from informal cupcake sales to organised virtual balloon races to designated charity branded products creating agreed margin contributions.

  • Superdrug, a major UK high-street retailer has just [December 2016] given £2.5m to the Marie Curie cancer charity. This money was earned over 2 years from hundreds of small staff events and the profits from the sale of Marie Curie branded products.
  • Manchester United FC has a foundation which raises money for football coaching within local schools and youth football clubs.

4. Volunteering

Volunteering is the final strand to CSR business practice. It’s where a company’s staff donate their time to further a cause, express concern or highlight a serious issue in society. Typical examples include:

  • Bytenight; a rough, outdoor town centre sleepover that simulates the plight of the homeless. Managed by Action for Children, it’s raised a £1m in the last few years. It’s many volunteers are generally drawn from the UK’s IT sector
  • Slightly less tasking, charities like Make a Wish recruit volunteers to place and recover collecting tins placed in their local communities.

Overall, CSR strategies encourage a company to make a positive impact on the environment and stakeholders including consumers, employees, investors, communities, and others.

Proponents argue that corporations increase long-term profits by operating with a CSR perspective, as long as that perspective gels with its clients or consumers. Conversely, critics argue that CSR distracts from businesses' economic role i.e. to make profits for all stakeholders [staff and shareholders].