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CSR is the deliberate inclusion of public interest into corporate decision-making, that is the core business of the company or firm, and the honoring of a triple bottom line: people, planet, profit.
Corporate social responsibility (CSR, also called corporate conscience, corporate citizenship, social performance, or sustainable responsible business) is a form of corporate self-regulation integrated into a business model. CSR policy functions as a built-in, self-regulating mechanism whereby business monitors and ensures its active compliance with the spirit of the law, ethical standards, and international norms. The goal of CSR is to embrace responsibility for the company's actions and encourage a positive impact through its activities on the environment, consumers, employees, communities, stakeholders and all other members of the public sphere.
Furthermore, CSR-focused businesses would proactively promote the public interest by encouraging community growth and development, and voluntarily eliminating practices that harm the public sphere, regardless of legality. Corporate Social Responsibility once referred to philanthropic activities that were separate from business objectives. This is no longer the case. An increasing number of business leaders have recognised that cutting edge innovation and competitive advantage can result from weaving social considerations into business strategy.
Some examples
Even after reading the definitions of CSR, this principle can still seem pretty complicated. A great way of understanding exactly what is meant by CSR, is by taking a look at some practical examples in Australia.
One of the ways in which Woolworths (the fresh food people) undertake their CSR obligation, is through their commitment to the environment. As part of this obligation, Woolworths created the ‘greenbag’ as a plastic bag alternative and also provides training to its 30,000 staff on how to ‘fill the bag and not the environment.’
AGL (Australia’s energy company) is another good example. It operates the ‘energy for life’ community investment program, which involves paying the winter energy bills for homeless shelters in NSW, Victoria and South Australia.
For McDonalds, the motto ‘giving back’ forms an ‘integral part of everything [they] do.’ One example of how McDonalds gives back to the community is through the Ronald McDonald House charity. This provides seriously ill children with facilities and support that helps these kids to live a ‘brighter, happier and healthier’ life.
Large companies usually undertake many projects and usually form partnerships with a range of non-profit organizations in order to fulfill their social responsibility within the community. Most large companies will have details of all community and environmental projects in the ‘About Us’ section on their website.
When and why did it come about?
The principle of CSR was developed in response to the incredible power and influence that multi-national corporations have. This power means that their decisions and activities have a massive impact on the lives of ordinary people. These impacts are varied—they may be as global as pollution resulting from production processes, or as local as an individual’s addiction to a company product. As a result, society’s expectations of what corporations should and shouldn’t do have changed from what they were in the past. These days, corporations are expected not only to look out for themselves, but to act responsibly to help meet the social and environmental needs of communities.
Is it compulsory?
No, despite the enormous powers of corporations to affect the global society, CSR is not a legal requirement in Australia. Although a lot of companies take this voluntary commitment seriously, there are also many companies that do nothing at all.
References
Corporate Responsibility Index, http://www.corporate-responsibility.com.au/
Redmond P 2005, ‘Corporate Social Responsibility: An overview’, Reform, No. 87, June
St James Ethics, Corporate social responsibility, http://www.ethics.org.au/
Standen M 2005, ‘The corporation in society’, Reform, No. 87, June
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