Corporate Social Responsibility And Sustainability Pdf
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- Corporate Social Responsibility and Sustainability
- Sustainability and Corporate Social Responsibility (CSR)
- Corporate social responsibility
Sustainability is a comprehensive approach to management of organizations which is focused on creating and maximizing long-term economic, social and environmental value. It is a response to the challenges of the modern world facing organizations from the public and private sectors. We provide support to private and public companies in their transformation from economically-oriented entities to organizations that consciously build their value through active management of the economic, social and environmental impact. Sustainable development is best described by four key words Impact Economics Relations Transformation.
Corporate Social Responsibility and Sustainability
Most companies practice a multifaceted version of CSR that spans theaters ranging from pure philanthropy to environmental sustainability to the explicitly strategic. To maximize their impact, companies must ensure that initiatives in the various theaters form a unified platform. Four steps can help them do so:. This does not mean that all initiatives necessarily address the same problem; it means that they are mutually reinforcing and form a cogent whole.
The range of purposes underlying initiatives in different theaters and the variation in how those initiatives are managed pose major barriers for many firms. Strategy development can be top down or bottom up, but ongoing communication is key. Such firms cannot maximize their positive impact on the social and environmental systems in which they operate.
Firms must develop coherent CSR strategies, with activities typically divided among three theaters of practice. Theater one focuses on philanthropy, theater two on improving operational effectiveness, and theater three on transforming the business model to create shared value. Most companies have long practiced some form of corporate social and environmental responsibility with the broad goal, simply, of contributing to the well-being of the communities and society they affect and on which they depend.
But there is increasing pressure to dress up CSR as a business discipline and demand that every initiative deliver business results. If in doing so CSR activities mitigate risks, enhance reputation, and contribute to business results, that is all to the good. But for many CSR programs, those outcomes should be a spillover, not their reason for being.
This article explains why firms must refocus their CSR activities on this fundamental goal and provides a systematic process for bringing coherence and discipline to CSR strategies. Our findings were remarkably consistent.
Other key findings are below. Rather, most companies practice a multifaceted version of CSR that runs the gamut from pure philanthropy to environmental sustainability to the active pursuit of shared value. But although many companies embrace this broad vision of CSR, they are hampered by poor coordination and a lack of logic connecting their various programs. Although numerous surveys have touted the increased involvement of CEOs in CSR, we have found that CSR programs are often initiated and run in an uncoordinated way by a variety of internal managers, frequently without the active engagement of the CEO.
To maximize their positive impact on the social and environmental systems in which they operate, companies must develop coherent CSR strategies.
This should be an essential part of the job of every CEO and board. Aligning CSR programs must begin with an inventory and audit of existing initiatives. Assigning CSR activities accordingly is a crucial first step. Programs in this theater are not designed to produce profits or directly improve business performance. Examples include donations of money or equipment to civic organizations, engagement with community initiatives, and support for employee volunteering.
Examples include sustainability initiatives that reduce resource use, waste, or emissions, which may in turn reduce costs; and investments in employee working conditions, health care, or education, which may enhance productivity, retention, and company reputation.
Programs in this theater create new forms of business specifically to address social or environmental challenges. Improved business performance—a requirement of initiatives in this theater—is predicated on achieving social or environmental results. Instead of using its customary wholesaler-to-retailer distribution model to reach remote villages, the company recruits village women, provides them with access to microfinance loans, and trains them in selling soaps, detergents, and other products door-to-door.
More than 65, women entrepreneurs now participate, nearly doubling their household incomes, on average, while increasing rural access to hygiene products and thus contributing to public health. Its success has led Unilever to roll out similar programs in other parts of the world. As Project Shakti demonstrates, theater three programs need not be comprehensive.
Theater three initiatives almost always call for a new business model rather than incremental extensions. Although each CSR activity can be assigned principally to a single theater, the boundaries are porous: Programs in one theater can influence and complement those in another or even migrate. Thus, while it was not designed to drive business results, it may end up doing so and as a result migrate to theater two.
Similarly, activities in theater two may give rise to new business models and thereby migrate to theater three. This aggressive goal is driving the development of new business models to close the post-consumer recycling loop. IKEA will have to radically alter how it designs furniture and, even more important, devise new models for collecting and recycling used furniture.
Companies seeking to coordinate established portfolios should begin with step one, which emphasizes rationalizing the programs within each theater.
Companies building their first portfolios should start with step four, which focuses on developing an interdisciplinary strategy. While it may be unsurprising that CSR programs are often poorly coordinated across theaters, our research reveals that poor coordination is common even within theaters. Thus the initial step for many firms is to bring coherence to the existing programs in each theater. For example, a fast-food operator will be better served by a program that collects excess food from supply chain partners and delivers it to local food pantries than by an employee blood-donation program.
Until the advent of the program, each PNC market had a CSR budget that regional managers allocated as they thought best, resulting in a well-intentioned but incoherent array of initiatives.
The family-owned Mexican baking company Grupo Bimbo demonstrates alignment in theater two. Bimbo is the largest bakery in Mexico, with a workforce of nearly , and a similar number of small retailers in its network.
It also has a strong microfinance program to help its mom-and-pop retailers manage working-capital shortages and pay for small capital additions.
Aligning, then, is not about putting all your eggs in one basket, though that sometimes helps. Just as the goals of programs vary widely from theater to theater, so do the definitions of what constitutes success. Therefore, measuring top- or bottom-line impacts would be irrelevant for the former but is essential for the latter. Gauging the success of a theater one program requires measuring its nonfinancial outputs.
It also measures additional funding that flows into early childhood education programs from other entities as a result of its advocacy efforts. Partnering with nonprofits or other third-party evaluators can help companies credibly gauge the social impact of their theater one activities.
Coordinating initiatives does not mean they all address the same social or environmental challenge. Because theater two programs may generate revenue or reduce costs, measuring their performance calls on more-familiar, tangible approaches. These might include quantifying how energy- and waste-reduction initiatives impact the top or bottom line and improve air or water quality. UPS, for example, enlists an independent auditing firm to evaluate its progress on energy use and carbon emissions reductions and reports both the cost savings and the resource savings.
Its most recent sustainability report includes its total CO2 emissions, the carbon emissions per mile driven by its fleet, the ground packages delivered per gallon of fuel used, and the number of miles driven by its alternative-fuel delivery vehicles.
Not all theater two financial benefits are realized soon after investments are made, however, so companies looking for business gains from activities in this sphere need an ongoing system to track net present value. If benefits do not match expectations, corrective measures may be called for.
This enables it to judge whether its investment has produced the desired societal gains—although sometimes theater two investments are made in anticipation of regulatory changes or market requirements and are best viewed as simply the cost of doing business.
Because they generally involve new business models, theater three initiatives have particular measurement challenges. Consider Jain Irrigation, a global drip-irrigation-equipment supplier headquartered in India. Drip irrigation technology not only conserves water in a water-stressed environment but also supplies it in a controlled fashion, which helps increase agricultural yields.
The company offers farmers microfinance loans to help them purchase its equipment, provides technical advice to help them increase productivity, and buys their output at guaranteed prices. Since creating societal value is essential to business success in this theater, firms must develop measures both of the social or environmental value produced by a new business model and of the financial results, and must demonstrate how the two are connected.
The added value created for its customers enabled Jain to boost its top line while retaining its operating profit percentage. Crucially for theater three initiatives, companies must demonstrate superior social or environmental value for their external stakeholders while maintaining or improving internal bottom-line targets—a goal sometimes attainable only in the long run. However, if successful, they can transform companies into net positive contributors to societal well-being.
These are questions every business should ask: Does our fundamental business enhance society? Do any of our products and activities diminish that goal, and if so, how can we mitigate or reverse them?
Coordination across theaters does not mean that all initiatives should necessarily address the same social or environmental challenge. Ambuja Cements, an Indian subsidiary of the Swiss conglomerate Holcim, illustrates such coordination.
The founders of the company expressed a deep commitment to the communities where it sourced limestone and operated cement-production kilns. For many years after their inception they were largely theater one initiatives, managed by the Ambuja Foundation.
But when Holcim acquired a controlling stake in the company, in , it brought with it a more comprehensive focus on environmental and social sustainability. By Ambuja had initiated several plant-level environmental sustainability programs, mainly in theater two, to complement its corporate foundation programs. Using our four-step methodology, Ambuja began in to proactively coordinate its portfolio of CSR activities across theaters. For example, its alternative fuels program, in theater two, led to the expansion of a theater one program for educating farmers about productivity practices, which now also includes instruction on recovering corn stalks, rice husks, and other farm waste—materials the company buys for use as biofuel.
The trucks were almost all owned by subcontractors, who often drove dangerously through villages as they transported limestone and cement. Here, too, a supply chain requirement in theater two sparked an education program in theater one. All this has enabled the company to push for an ambitious business-model transformation in theater three, where it can offer reclaimed land with good water plus cash compensation in exchange for new land to mine.
Ambuja is now aiming to offset its plastic consumption by burning more waste plastic as fuel in its kilns than it uses to package its cement, and it is also attempting to significantly decrease its carbon emissions.
Coordinated support for CSR initiatives at the top levels of executive management is critical to success; we heard this consistently from CSR professionals during our research. Ideally companies should establish a position to be filled by someone whose primary responsibility is to integrate initiatives across all three theaters—regularly convening the key players in each theater to ensure ongoing communication and alignment—even if responsibility for individual initiatives remains dispersed.
Purely philanthropic programs often reside with managers who have titles such as VP of corporate or community affairs; these CSR leaders commonly report to the HR chief and thus are two levels removed from the CEO. Alternatively, at large companies the head of the corporate foundation may handle philanthropy and community giving. Theater two initiatives are typically run by operations managers and sometimes by environmental specialists , who may have a dotted-line reporting relationship to the VP of sustainability or the chief sustainability officer.
In one instance of cross-theater coordination, logistics managers identified the trucking fleet as an operational risk and asked for a driving safety program, which was later extended to health education. The latter approach first:. In Ambuja established sustainability committees, which have oversight of all social and environmental activities, at both the plant and the corporate levels.
The plant-level committee meets every month and funnels issues of companywide importance, such as driver safety training and alternative fuels, up to the corporate-level committee.
Both groups include representatives from the Ambuja Foundation. At each corporate-level meeting, members discuss issues flagged by the plant-level committee along with concerns of their own. The aspirational CSR goals of the company are to give back more than it takes from the community and to clean more than it pollutes in its manufacturing operations—a vision made possible only by this active input from across Ambuja and the effective coordination across the three theaters.
IKEA has developed its blueprints in a top-down manner. When the company hired Steve Howard as its CSO, in , it appointed him to its seven-person executive management group. Its work has facilitated the simultaneous pursuit of aggressive growth and bold sustainability plans we mentioned earlier, along with a social welfare initiative known as the IKEA Way—an array of programs related to preventing child labor and maintaining other labor standards throughout the supply chain.
The sustainability agenda thus crafted at the top is being executed throughout the company.
Sustainability and Corporate Social Responsibility (CSR)
The term Corporate Social Responsibility CSR has a fluid definition, and can vary across different corporate programs that benefit the community Chandler, In simple terms, CSR is any action a corporation does to benefit the relationship between a corporation and the community, and to make a positive difference in the community with employee engagement, financial support, and volunteerism. Corporate social responsibility is a business trying to do well in the community through responsible actions. While environmental sustainability is usually a part of corporate social responsibility, CSR does not only focus on sustainability. They are trying to limit the harm they make on the environment, and do so partially through corporate social responsibility. The brand Patagonia was started by Yvon Chouinard, an avid mountaineer, rock climber, and skier.
Most companies practice a multifaceted version of CSR that spans theaters ranging from pure philanthropy to environmental sustainability to the explicitly strategic. To maximize their impact, companies must ensure that initiatives in the various theaters form a unified platform. Four steps can help them do so:. This does not mean that all initiatives necessarily address the same problem; it means that they are mutually reinforcing and form a cogent whole. The range of purposes underlying initiatives in different theaters and the variation in how those initiatives are managed pose major barriers for many firms. Strategy development can be top down or bottom up, but ongoing communication is key.
PDF | For that the enterprises can proceed at implementation in practice of the generous humanitarian principles of sustainable development is.
Corporate social responsibility
We strive to consistently improve our sustainability in our operations, and also through our innovative products and technologies that address complex issues in a sustainable way. At Agilent, we have always believed in the power of collaboration — working together to innovate and achieve the best results. We've also learned that when we transfer this approach to working externally — joining forces with customers, suppliers, educational institutions, nonprofits, even similar businesses — our learnings and results are greater than ever. Let's remember these lessons as we consider the massive sustainability issues our world is facing. Ranked 1 in Barron's Most Sustainable Companies.
Corporate social responsibility CSR is a type of international private business self-regulation  that aims to contribute to societal goals of a philanthropic, activist, or charitable nature by engaging in or supporting volunteering or ethically-oriented practices. While it has been considered a form of corporate self-regulation  for some time, over the last decade or so it has moved considerably from voluntary decisions at the level of individual organizations to mandatory schemes at regional, national, and international levels.
Response to the challenges of the modern world
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