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Defining Corporate Social Responsibility

July 22, 2010

Photo credit: Lincolnian (Brian) via Creative Commons License through Flickr. The photographer does not necessarily endorse the views expressed in this article.

For more definitions and other helpful resources, see our website here.

Shakespeare once said, “A rose by any other name is just as sweet.” Practitioners of corporate social responsibility seem to take this phrase to heart. Despite the progress in our field, we continue to give the term “CSR” new names that seem to all imply the same meaning, e.g. responsible business, corporate social performance, and corporate responsibility, to list a few.

Yes, all these terms are related to the same type of business practice and strategy and yes, call a rose anything else and still smells as sweet. However, we have the word “rose” and the term “CSR” and they both work, so why stray from them?

Despite the rhetorical sound of that question, there is an answer from a 2008 Oxford study:

The field of empirical CSR research generally has been hampered by the lack of a consistent definition of the construct of CSR, as well as its operationalization and measurement… This lack of consistency of CSR definitions across studies makes it difficult to evaluate and compare the findings from different studies because they usually refer to different dimensions of CSR.1

With these findings in mind, I hope to do my part and clarify some of the confusion surrounding corporate social responsibility with the following definition.

Corporate Social Responsibility (CSR):

Definition: CSR is a set of actions of a company that changes business operations to improve, maintain, or mitigate a company’s impact on society and the environment. For a great diagram of CSR visit Mallen Baker’s website, one of the better resources for those interested in corporate social responsibility.

Purpose: To identify and improve a company’s impact on society and the environment, while driving stronger business results such as brand enhancement, market differentiation, and employee satisfaction.

Attributes:

  1. CSR is a behavioral and programmatic approach to shaping company actions and strategy
  2. CSR is more to do with the management of issues than the life cycle of the company or product or the set up of the company environment as a whole
  3. CSR addresses shareholders management more than stakeholder management (two terms I will explain in a later post)
  4. As aforementioned, CSR tends to emphasize the actions of the company e.g. CSR reports deal much more with the celebration of the past (as opposed to sustainability practices, which look towards the future
  5. *NOTE: As of now, CSR is a more common term in the US, whereas sustainability is a more common practice and term in Europe. However, US companies have begun to use both terms interchangeably.

Examples:

Many if not most large corporations in the US publish a CSR report, so there is a plentitude of options to choose from. This is just a random sampling of some of the leaders of CSR.

Starbucks (2009):

Issue: Diversity

Methodology: “Our company-wide diversity strategy focuses on four areas: partners, customers, suppliers and communities”:

  • Partners (our employees) – We seek out and engage partners who are as diverse as the communities we serve (To qualify as a diverse supplier, you must meet the following criteria: 51% women- or minority-owned, or socially or economically disadvantaged as determined by the U.S. Small Business Association and certified by at least one of several listed organizations).
  • Customers – We extend the Starbucks Experience to all customers, recognizing and responding to their unique preferences and needs. We aim to provide an exceptional customer experience by connecting with our customers in a culturally relevant way.
  • Communities – We support and invest in local neighborhoods and global communities through strategic partnerships and economic development opportunities that deepen our ties in the communities where we do business.
  • Suppliers – We are a trusted and welcoming company for suppliers. Through our supplier diversity program, we work to increase our business relationships with minority- and women-owned suppliers.
  • Internal – Starbucks is dedicated to creating a workplace that values and respects people from diverse backgrounds, and enables its employees to do their best work.  We honor the unique combination of talents, experiences and perspectives of each partner, making Starbucks success possible.

*(Source: http://www.starbucks.com/responsibility/diversity/)

Results:

External:

  • Spending with these groups is projected to double this year, to $140 million up from $69 million in 2002.

Internal:

  • 24% of top corporate officers are women.
  • 31% For all executives — vice presidents and above — are women
  • 13% For all executives — vice presidents and above — are  people of color

For comparative purposes: with the national average of Fortune 500 companies

  • 15% women
  • 3-5% people of color

*(Source: http://www.nytimes.com/marketing/jobmarket/diversity/starbucks.html)

McDonald’s (2009):

Issue: Environmental Responsibility

Methodology: “Given our decentralized structure, and the variability of environmental issues across regions, there is no “one size fits all” approach. We see this as a benefit, because we have a virtual laboratory of environmental initiatives across our marketplace that we can learn from, share and scale when it makes sense. Given the breadth and scope of our business operations, we also need to understand what is most important from a global standpoint.  At the restaurant level, we are focused in three areas”:

  • Energy conservation Find further ways to increase energy efficiency in our restaurants in order to save money and reduce our environmental impacts
  • Sustainable packaging and waste management – Continue exploring ways to reduce the environmental impacts of our consumer packaging and waste in our restaurant operations
  • Green building design – Enhance our strict building standards to incorporate further opportunities for environmental efficiencies and innovation in the design and construction of our restaurants

* (Source: http://www.aboutmcdonalds.com/mcd/csr/report/overview.html)

Results:

  • The New High Density Universal Holding Cabinet (HD UHC), which will be premiered at the 2010 Worldwide Convention, has the capacity to deliver 30% energy savings per cell. We also have a new toaster in development that is projected to reduce energy consumption by 28%. The restaurant energy survey and optimization tools are being designed to deliver an average 3% energy reduction per restaurant.
  • Our Global Best of Green catalogue of environmental best practices was published and shared across the System in May 2009. In addition, we are organizing a Global Energy Council to leverage best practices and to act as a clearing house to prioritize and optimize resources against the most effective opportunities. We are also developing a set of development standards due out in 2010 that will be part of our formal release process for energy testing and verifying expectations.
  • Amount of packaging used, by weight in lbs., per transaction count
    • 2005: 0.1397 – 2009: 0.1297
  • Percent of packaging material that is made from recycled paper
    • 2005: 31.5 – 2009: 30.8

* (Source: http://www.aboutmcdonalds.com/mcd/csr/report/overview.-RightParaContentTout-43872-ReportsLinkList-28982-File1.tmp/mcd052_2009report_v6.pdf)

1Aguilera & Williams “Corporate Social Responsibility in a Comparative Perspective”, Oxford: Oxford University Press, 2008)

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