Corporate Social Responsibility

(Governance, Business Ethics, Risk

Management and Internal Control)
2nd Trimester, AY 2020-2021
 Corporate Social Responsibility
What is Corporate Social Responsibility (CSR)?
•The broadest definition of corporate social responsibility
is concerned with what is – or should be – the relationship
between global corporations, governments of countries
and individual citizens.
•More locally the definition is concerned with the
relationship between a corporation and the local society in
which it resides or operates.
•Another definition is concerned with the relationship
between a corporation and its stakeholders.
•CSR is a concept whereby companies integrate social and
environmental concerns in their business operations and in
their interaction with their stakeholders on a voluntary
basis.
 Corporate Social Responsibility
The Effects of Organizational Activity:
•The utilization of natural resources as part of its production
processes.
•The effects of competition between itself and other organizations
in the same market.
•The enrichment of a local community through the creation of
employment opportunities.
•Transformation of the landscape due to raw material extraction
or waste product storage.
•The distribution of wealth created within the firm to the owners of
that firm (via dividends); workers of that firm (through wages); and
effect of this upon the welfare of the individuals.
•Climate change and the way in which the emission of
greenhouse gases are exacerbating this.
 3 Basic Principles of CSR
1. SUSTAINABILITY – is concerned with the effect which
action taken in the present has upon the options
available in the future. If resources are utilized in the
present then they are no longer available for use in the
future especially is the resources are finite in quantity.
2. ACCOUNTABILITY – is concerned with an organization
recognizing that its actions affect the external
environment, and therefore assuming responsibility for
the effects of its actions.
3. TRANSPARENCY – means that the external impact of
the action of the organization can be ascertained from
that organization’s reporting and pertinent facts are not
disguised within the reporting.
 The Prominence of CSR
It is quite noticeable how much more prominent corporate
social responsibility (CSR) has become – not just in the
academic world and in the business world but also in
everyday life. We can highlight a lot of factors which have
led to this interest – such things as:
•Poor business behavior towards customers
•Treating employees unfairly
•Ignoring the environment and the consequences of
organizational action.
•Climate change and emission of greenhouse gases and
carbon dioxide.
•Exploitation of people in developing countries – child
labor
 The Prominence of CSR
• It is no longer acceptable for a company to say that the
conditions under which their suppliers operate is outside
of their control and so they are not responsible.
• Customers have said that this is not acceptable and
have called companies to account for their actions.
• Interestingly, the popularity of companies increases
after they have admitted problems and taken steps to
correct these problems.
• In doing this, companies thereby showed both that
honesty is the best practice and customers are
reasonable in their complains.
 Changing Emphasis in Companies
• Companies themselves have also changed. No longer
are they concerned with greenwashing – the pretention
of socially responsible behaviour through artful
reporting.
• Greenwashing is a communication and marketing
strategy adopted by companies or other
organizations. It consists in putting forward ecological
arguments in order to forge an ecologically responsible
image among the public. 
 Greenwashing
Examples of Greenwashing:
The “zero emissions cars”
•Virtually every automaker praises the
environmental bravery of its electric,
hybrid, or particularly fuel-efficient model
in terms of greenhouse gas
emissions. These companies “forget” to
report the (rarely green) origin of the
electricity that recharges the batteries,
the problems of recycling the very
polluting lithium-ion batteries and there
are even scandals of cheating on
pollution tests and other “improved”
figures and data.
 Greenwashing
The green computing or “green IT”
•New technologies in general and IT in
particular, are a major ally of the
environment. They allow saving paper,
reducing CO2 emissions by allowing
online and remote work, etc. Therefore,
many tech companies announce
technology as being the planet’s holy
grail which is a bit greenwashing. Why?
Because tech components make up the
tech devices. And these components
are made of rare Earth minerals whose
exploration (by mining activities) is very
ecologically harmful.
 Recognizing CSR
• Most people initially think they know what CSR is and
how to behave responsibly.
• So there is general agreement that CSR is about
 a company’s concern for such things as community
involvement,
 socially responsible products and processes,
 concern for the environment, and
 Socially responsible employee relations
• But it is here that a firm runs into problems – how to
balance up the conflicting needs and expectations of
various stakeholder groups while still being concerned
with shareholders; how to practice sustainability; how to
decide if one activity is more socially responsible.
Environmental Issues and their Effects
and Implications
• An activity undertaken by an organization which impacts
upon the external environment affects it in ways which
are not reflected in the traditional accounting of that
organization.
• The environment can be affected either positively,
through for example a landscaping project, or
negatively, through the creation of heaps of waste from
a mining operation.
• These actions of an organization impose costs and
benefits upon the external environment without
consultation and in reality form part of the operational
activities of the organization.
Environmental Issues and their Effects
and Implications
• These actions are excluded from traditional accounting
of the firm and by implication from its area of
responsibility - in short the cost & benefits have been
externalized.
• Such externalized costs and benefits, traditionally not
the concern the org and the managers & excluded from
accounting perhaps because from accounting viewpoint
this is problematical and not easy to measure.
• It is probably fair to state however that more costs have
been externalized by the organization than benefits.
 Externalizing Costs
• As far as the externalization of is
concerned, it is important to recognize
that these can be externalized spatially
and temporally.
 Spatial Externalization
Spatial externalization describes the way in which costs
can be transferred to other entities in the current time
period. Examples of such spatial externalization include:
•Environmental degradation through such things as
polluted – and therefore dead – rivers or through increased
traffic imposes costs upon the local community through
reduced quality of life;
•Causing pollution imposes cost upon society at large;
•Waste disposal problems impose costs upon whoever is
tasked with such disposal;
•Removing staff from shops imposes costs upon
customers who must queue for service.
•JIT manufacturing imposes costs upon suppliers by
transferring stockholding costs to them.
 Temporal Externalisation
Temporal externalization of costs describes the way in which
costs are transferred from the current time period into another –
the future. This enables reported value creation, through
accounting, to be recorded in the present. Examples of temporal
externalization include.
•Failing to provide for assets disposal costs in capital investment
appraisal and leaving such costs for future owners to incur;
•Failure to dispose of waste material as it originates and leaving
this as a problem for the future;
•Causing pollution which must then be cleaned up in the future;
•Depletion of finite natural resources or failure to provide
renewable sources of raw material will cause problem for the
future viability of the organization.
 Temporal Externalisation
• For example, if we consider the nuclear power
generation industry, it is now generally accepted that if
the full costs of generating power by this means, would
include the costs of disposing of nuclear waste and the
costs of decommissioning nuclear generators at the end
of their working life, had been taken into account then
the idea of power generation by this means would never
have been put into operation.
• But nuclear power is being considered in a lot of
countries as the only realistic solution to global warming
as they emit minimal amounts of greenhouse gases. Of
course their future costs are again being ignored and so
temporarily externalized.
 Stakeholder
One of the major influences on CSR is the stakeholder.
What is a stakeholder?
•Those groups without whose support the organization
would cease to exist.
•Any group or individual who can affect or is affected by
the achievement of the organization’s objectives.
The most common groups who we consider to be
stakeholders include:
-Managers - Investors
-Employees - Shareholders
-Customers - Suppliers
 Stakeholder
Then there are some more generic groups who are often
included:
-Government

-Society at large

-The local community

Many people consider that only people can be stakeholders

to an organization. Some people extend this and say that the
environment can be affected by organizational activity.
These effects of the organization’s activities can take many
forms such as:
•The utilization of natural resources as a part of its
production processes;
•The effects of competition between itself and other
organizations in the same market.
 Stakeholder
• The enrichment of a local community through the creation of
employment opportunities
• Transformation of the landscape due to raw material
extraction or waste product storage
• The distribution of wealth created within the firm to the
owners of that firm (via dividends) and the workers of that
firm (through wages) and the effect of this upon the welfare
of the individuals.
• Pollution caused by increased volumes of traffic and
increased journey times because of those increased
volumes of traffic.
Thus many people also consider additional stakeholder to an
organization:
- The Environment & - The Future.
 The Stakeholder Theory
The argument for the stakeholder theory is based upon
the assertion that maximizing wealth for society and all its
members and that only a concern with managing all
stakeholder interests achieves this.
This theory also states that all stakeholders must be
considered in the decision making process of the
organization. The theory states 3 reasons why this should
be observed:
1.It is morally and ethically correct way to behave.
2.Doing so actually also benefits the shareholders
3.It reflects what actually happens in an organization.
According to this theory, stakeholder management or
CSR, is not an end in itself but a means for improving
economic performance.
 Globalization and CSR
Globalization is a leading concept which has become the
main factor in business life during the last few decades.
•This phenomenon affects the economy, business life,
society and environment in different ways, and almost all
corporations have been affected by these changes.
•These changes are mostly related with increasing
competition and the rapid changings of technology and
information transfer.
•This issue makes corporations more profit oriented
rather than a long term and sustainable company.
•And since corporations are a vital part of the society, they
need to be organized properly.
 Globalization
• Globalization can be defined as free movement of
goods, services and capital.
• It is also a process which integrates world economies,
culture, technology and governance.
• This is because globalization involves the transfer of
information, skilled employee mobility, the exchange of
technology, financial funds flow and geographic
arbitrage between developed countries and developing
countries.
• Moreover, it has religious, environmental and social
dimensions, apparent all over the world and the world is
changing dramatically.
 How Globalization Affects CSR
• It is clear that there nothing new about economic
growth, development and globalization.
• Economic growth bring out some consequences for the
community which is becoming a world phenomenon.
• One of the most important reasons is that we are not
taking into account the moral, ethical and social aspects
of this process.
• Economic growth and economic development might not
be without social and moral consequences and
implications.
 How Globalization Affects CSR
• Another question is who is responsible of this ongoing
process and for ensuring the wellbeing of people and
safeguarding their prosperity.
• Is this the responsibility of government, the business
world, consumers, shareholders or of all people?
• Government is part of the system and the regulator of
markets and lawmakers.
• Managers, businessmen and the business world take
action concerning market structure, consumer behavior
or commercial conditions.
• Moreover, they are responsible to shareholders for
making more profit to keep their interest long term in the
company.
 How Globalization Affects CSR
• There are many reasons for ethical and socially
responsible behavior of the company.
• However, there are many cases of misbehavior and
some illegal operations of some companies.
• Increasing competition makes business more difficult
than before in the globalized world.
 Benefits of Corporate Social
Responsibility
• Improved public image. This is crucial, as consumers
assess your public image when deciding whether to buy
from you. Something simple, like staff members
volunteering an hour a week at a charity, shows that
you’re a brand committed to helping others. As a result,
you’ll appear much more favourable to consumers.

• Increased brand awareness and recognition. If

you’re committed to ethical practices, this news will
spread. More people will therefore hear about your
brand, which creates an increased brand awareness.
 Benefits of Corporate Social
Responsibility
• Cost savings. Many simple changes in favour of
sustainability, such as using less packaging, will help to
decrease your production costs.

• An advantage over competitors. By embracing CSR,

you stand out from competitors in your industry. You
establish yourself as a company committed to going one
step further by considering social and environmental
factors.
 Benefits of Corporate Social
Responsibility
• Increased customer engagement. If you’re using
sustainable systems, you should shout it from the
rooftops. Post it on your social media channels and
create a story out of your efforts. Furthermore, you
should show your efforts to local media outlets in the
hope they’ll give it some coverage. Customers will
follow this and engage with your brand and operations.
 Benefits of Corporate Social
Responsibility
• Greater employee engagement. Similar to customer
engagement, you also need to ensure that your
employees know your CSR strategies. It’s proven that
employees enjoy working more for a company that has
a good public image than one that doesn’t.
Furthermore, by showing that you’re committed to
things like human rights, you’re much more likely to
attract and retain the top candidates.
• More benefits for employees. There are also a range
of benefits for your employees when you embrace CSR.
Your workplace will be a more positive and productive
place to work, and by promoting things like volunteering,
you encourage personal and professional growth.
 Top 10 Companies with the
Best CSR Reputation
1. Lego
2. The Walt Disney Company
3. Rolex
4. Ferrari
5. Microsoft
6. Levi’s
7. Netflix
8. Adidas
9. Bosch
10. Intel
 LEGO
The Lego Group – Number 1 Company With The Best
Reputation
•The Lego Group communicates a great dedication to
environmental and social causes. The company says it lives up
by 12 responsible business principles that set what’s expected
from its production sites, suppliers and partners and on topics
such as ethics, people, children, and the environment. They
also say they run audits to assess suppliers’ performance on
these principles.
•The Lego Group also has goals towards eliminating waste as it
reviews the materials used in its products. The company also
says it has circular economy initiatives to provide consumers
the chance to pass on their LEGO bricks to children in need.
 WALT DISNEY
• Commonly named only as “Disney”, the company has a
“social responsibility” signature right at the top menu of the
website. The company talks about its impact program under
which – $338.2 million in cash and in-kind donations were
donated to nonprofit organizations that bring comfort,
inspiration, and opportunity to kids, families, and
communities around the world. Besides, there is also news
around money shared to help protect the environment and
wildlife.
• In 2016, Disney installed a large area with solar panels
expected to power 2 of their 4 theme parks in Orlando. They
also share how they are eliminating waste and reducing
straws and stirrers and how they are working on recycling
programs and encouraging workers to commute.
 ROLEX
Rolex: The Third Company With The Best CSR
Reputation
•The Swiss manufacturer whose CSR communication is
somewhat hard to find is available not at its main website
but at .org: another website that tells the history and
philanthropic projects of the company.
•There, Rolex shares it has been supporting missions from
National Geography under the Perpetual Planet signature.
While some are focused on assessing the melting of
glaciers, others focused on evaluating the disappearance of
rivers such as the Okavango Delta in Botswana.
 MICROSOFT
Number 5: Microsoft In The Middle Of The 10 Most
Reputable Companies
•Microsoft keeps being an innovative company that stands
out as it has more credit for its corporate purpose than most
companies in the top 100 do, Isadora Corbella says.
•The company managed by Satya Nadella has presented at
the beginning of 2020 an environmental strategy to be
carbon neutral by 2030. A plan to offset all its emissions
since the business first started until 2050 is also among the
company’s promises.
•Also, Brad Smith, president of Microsoft, has recently
agreed and signed with the Vatican a compromise that the
company would ethically collaborate on “human-centered”
ways of designing AI.
 INTEL

Intel: The Last Spot Among The 10 Companies With

The Best Reputation
•The American company also has a series of corporate
social responsibility issues across its website. These
range from social impact to supply chain responsibility or
Diversity and Inclusion.
•According to the RepTrack, Intel has the reputation of
being an innovative, well-organized, a good employer and
a leader in global data security.
 10 Key Elements to Corporate Social
Responsibility Business Strategy Success

1. Internal Assessment.
– Before designing a CSR strategy it is often helpful to

assess your current CSR activities, looking at the whole

picture what CSR policies, programs, and structures are
already in place and where the “gaps” are.
2. Put it in writing.
– Ensure that your company creates a separate CSR

statement or embeds its CSR commitment within the

company’s mission or values statement, code of conduct
or other appropriate company policy.
 10 Key Elements to Corporate Social
Responsibility Business Strategy Success

3. Embed CSR into the company planning and

budget processes.
– The ultimate goal of creating a CSR management

system is to ensure that CSR considerations are a

part of all business decisions.
4. Develop processes for employees to raise CSR
issues and concerns to appropriate decision-makers
and advocates.
– An open environment is one of the easiest ways to

solicit valuable feedback on CSR issues and

problems.
 10 Key Elements to Corporate Social
Responsibility Business Strategy Success

5. Formalize the board- and executive- level

responsibility for CSR issues.
– It is virtually impossible to successfully implement

CSR in your company without board, executive and

senior management buy-in, support, and
accountability for CSR performance. Your ability to
build senior-level vision and support will have a
direct impact on the depth, breadth, longevity and
overall effectiveness of your CSR work.
 10 Key Elements to Corporate Social
Responsibility Business Strategy Success

6. Communicate CSR performance visibly and frequently to

all employees.
– Whether through newsletters, annual reports, intranet

communication, meetings, training or other informal

mechanisms, make sure your employees know CSR is a
company priority.
7. Put CSR on the agenda of meetings at all levels of the
company.
– This includes the board, executive and senior management,

companywide meetings and departmental communications.

 10 Key Elements to Corporate Social
Responsibility Business Strategy Success

8. Provide training for employees directly involved in

CSR activities.
– This is an ongoing commitment since training needs

will change as the company’s CSR issues change

and evolve.
9. Create CSR accountability at all employee levels.
– Build CSR responsibilities into the job descriptions

and performance evaluations of employees at all

levels.
 10 Key Elements to Corporate Social
Responsibility Business Strategy Success

10. Measure and communicate your performance.

– Whether you choose to engage in an internally

managed assessment of your CSR performance or

contract out a formal external assessment of your
CSR performance, find an honest and appropriate
way to share the results with internal and external
stakeholders
 3 Key Areas that you should Measure
your CSR Performance on
• Many of the best companies now integrate
corporate social responsibility (CSR) into their
day to day operations using civic engagement
to create shared value to the community and
business. Instead of just focusing on profit
generation, progressive companies look at what
is called the Triple Bottom line which goes
beyond the focus on profits – the original
bottom line.
 3 Key Areas that you should Measure
your CSR Performance on
These Triple Bottom line or 3Ps allows companies to evaluate
their performance in the following areas:
1.People which focuses on the development of the community
and adherence to fair labor practices
2.Planet focused on the impact on the environment and what
is being done to integrate sustainable environmental practices
3.Profit the economic value created by the organization after
deducting the cost of all inputs, including the cost of the
capital
 3 Key Areas that you should Measure
your CSR Performance on
• By focusing on these 3 Ps, companies can ensure that
they are using business as a way to address customer
needs and create jobs while maintaining a healthy
surrounding.
• In today’s business environment, Corporate Social
Responsibility has become an integral part of
cooperation’s operations.
• With a clear CSR strategy communicated to all
employees within the company, everyone will be
working towards the same goals; reflecting its values
and its relationship to the society.
OPEN FORUM

•QUESTIONS????
•REACTIONS!!!!!
 END OF PRESENTATION
https://www.highspeedtraining.co.uk/hub/importance-of-corporate-social-responsibility/

Corporate Social Responsibility by David Crowther and Guler Aras 

https://youmatter.world/en/top-10-companies-reputation-csr-2020/

https://www.potential.com/articles/csr-key-elements/