Corporate Social Responsibilities - BMW Group - Essay Example

Corporate Social Responsibilities Introduction Corporate social responsibility basically addresses the impact of companies on the stakeholders. In addition, CSR plays a role in identifying the domains that companies need to consider in their relations with various stakeholders. In essence, CSR reminds organisations of their responsibilities to the society. In this regard, businesses also operate as social institutions that are responsible to internal and external stakeholders. Due to the societal expectations, CSR is necessary in terms of ensuring that organisations embrace sustainable development. As such, the activities of organisations should meet their present needs without impacting negatively on the future generations. Through a commitment to CSR, organisations play a role in solving economic, social and environmental problems. On the other hand, the internal forces that can contribute to CRS include pressure from shareholders and employees (Alessia et al. 2009). While, external forces contributing to CRS in organisations include consumer demand, government policies, technological advancement and social activism. In the contemporary business environment, the reputation or image of firms depends on the disclosure of their activities to the public. In this regard, CSR reports made available to the public allows internal and external stakeholders to examine the contribution of firms towards CSR activities. The growing consumer awareness has also increased pressure on corporations to publish annual CSR reports (Obserseder et al., 2014). These reports mainly focus on how firms are dealing with societal concerns regarding environmental pollution, climate change and resource depletion. Conversely, while there is debate concerning the importance of corporate self-reporting, the emergence of international guidelines and standards suggests that consumers are increasingly basing their purchase decisions on such information (Alessia et al. 2009). This paper examines corporate social responsibilities report of three companies that include BMW, Adidas and Shell. CSR Reports In the modern business environment, CSR reports are important because they help to enhance the image of firms in the public domain. Through these reports, firms are in a position to highlight on their business activities. Since the consumers are becoming aware regarding sustainable development, it is in the interest of companies to disclose their CSR activities. Such activities may include, for instance, community initiatives, safety at the workplace, stakeholder engagement, corporate governance and environmental protection. Further, CSR reports by firms play an important role in terms of disclosing and enhancing socially responsible behaviors (Alessia et al. 2009). BMW CSR Report The BMW Group considers social responsibility as an integral part of corporate self-conception. Further, their 2014 CRS report mainly focuses on the community, employees, environment and governance. With regard to its management approach, the BMW Group emphasises on a constant integration of sustainability in its business model. By embracing sustainability, the company intends to leverage new business opportunities, reduce risks and overcome both social and business challenges. The company also notes that social and environmental responsibility is critical to success on the global front (BMW Group, 2015). On the other hand, BMW Group emphasises a production process that is efficient and resource friendly as necessary to maintain competitive advantage. The company’s CSR report also highlights on its sustainability leadership goals that include entrepreneurial innovation. On this note, BMW Group considers social challenges as an opportunity to develop new products and services. The company also intends for its actions and innovations to benefit the society and customers in general. On another note, the company’s strategic goal that targets 2020 mainly focuses on its products and services, value creation, workers and corporate citizenship. In addition, BMW Group has added other goals in its 2020 strategic goals that include supporting intercultural understanding among employees and improvement of transparency and resource efficiency in their supply chain. The firm also views sustainability as a strategic corporate objective. This means that economic, environmental and social factors are also included in the decision-making process (BMW Group, 2015). With regard to stakeholder engagement, the firm stresses a continuous dialogue with its stakeholders as a way of identifying different views and integrating them into the strategy process. Being a global corporation, the company acknowledges the impact of its business activities to the environment and society. As a result, the BMW Group is in a position to consider the views of stakeholders in the decision-making process. Stakeholder engagement also allows the firm to analyse the market dynamics that has led to topics such as, introducing electromobility and communicating their messages to information multipliers in advance. The firm is also interested in improving its understanding of the different world views of stakeholders for efficient and adequate response. In its CSR report, the company also considers engaging in regular dialogue with policy makers, non-governmental organisations and union representatives. The dialogue is meant to generate sustainable solutions and to promote fair competition in the global marketplace (BMW Group, 2015). Among the topics that BMW Group has presented in its dialogue with political decision makers include putting carbon dioxide regulation into practice and how to deal with trade barriers, taxation and social challenges such as demographic change, for example. In its report, the firm also intends to expand dialogue with stakeholders in the international realm as a way of combating the challenges of the future. On another note, BMW Group also acknowledges legal compliance to be a joint responsibility. However, the managers bear the highest responsibility in terms of setting good example internally and externally (Papasolomou & Kitchen, 2011). The CSR report also highlights on how the BMW Group deal with issues of political, social and global economic risks. As a global brand, there are numerous challenges that can impact negatively on performance and productivity. As such, the firm discloses how it deals with risks in the international front through a focus on internationalising its sales and production structures. This helps to minimise the potential consequences of risk exposure in the various countries that the BMW Group is operating. Further, through a number of technical measures, the company is also in a position to minimise its exposure to natural and environmental risks (Avery & Bergsteiner, 2011). Concerning human rights, the company stresses its commitment to respecting and observing human rights within its actions and corporate influence. The firm further reports of a plan to integrate a human rights clause in all its dealership contracts globally by 2016. In terms of combating climate change and urban air pollution, the company also has a plan to significantly reduce carbon dioxide emission from its vehicle fleets by the year 2020. The company also reports on a plan to reduce water consumption and process waste water by averagely 45% per vehicle manufactured. The report also emphasises product safety by further strengthening both active and passive safety features and also developing highly automated driving experiences for customers. The report further focuses on resource efficiency and recycling management through innovative solutions such as the reuse of old batteries. In order to improve recycling of products, the company plans to open a recycling and dismantling center in Shenyang, China. In addition, the report also stresses on customer satisfaction by expanding direct contact in the different countries that the BMW Group operates (BMW Group, 2015). In terms of retaining highly skilled and experienced employees, the company stresses the need to offer attractive and secure jobs in addition to providing training opportunities for its employees. The company further offers employees a number of options to enable them balance work and private life. With regard to occupational health and safety, the report stresses the importance of wellness for its employees particularly in this era of demographic change. At present, the company plans to expand is health management programme 2020 to the international realm. In addition, the firm also intends to expand its corporate leadership programme and international young talent programmes for targeted students globally. The report also considers diversity and inclusion where the firm intends to maintain gender balance in its workforce. This is because; the company is convinced that maintaining a diverse workforce is necessary in terms of improving innovation and competitiveness (BMW Group, 2015). On the other hand, as a part of embracing corporate citizenship, BMW Group intends to expand intercultural innovation, social inclusion and efficient management of resources. As a corporate citizen, the firm has participated in creating awareness on the responsible utilisation of resources, support development in the local communities such as the BMW Warm Heart Fund and the BMW Korea Future Fund. In addition, the company also has a plan to expand Junior Campus globally. This programme aims at promoting the understanding of technology and sustainable mobility among adolescents and children (BMW Group, 2015). Adidas CSR Report In their 2014 CSR report, Adidas acknowledges that they are experiencing changes both in the industry and society respectively. Further, the company also notes that there are challenges such as political instability, globalisation and technological advancement, a shift in stakeholder interests and the demand for greater transparency. Due to the changing circumstances, the firm reports a focus on a sustainability strategy that tackles social and environmental impacts of its operations around the world. The firm also reports a focus on a sustainability strategy that establishes stakeholder networks in the countries that Adidas source from. The networks, for example, include civil society, non-governmental organisations and trade unions (Adidas Group, 2015). On another note, the firm’s CSR report also stresses the inclusion of social and environmental topics into its mainstream business activities. The firm’s 2020 targets focuses around the development of core social and environmental programmes. In addition, the company also plan to improve its strategic activities such as empowering employees, improving its chemical management and acknowledging human rights due diligence in the firm’s operations. Further, the company also plans to minimise its water footprint. In order to minimise its water footprint, the firm has announced a partnership with an organisation known as Parley for the Oceans that is concerned with raising awareness regarding the need to protect the oceans (Sustainable Brands, 2015). The programmes that Adidas and Parley for Oceans intend to promote include communication and education, combating ocean plastic pollution, and research and innovation. Further, the Adidas Group acknowledges that its environmental impacts emanate from the manufacturing process. As a result, partnering with the suppliers is necessary to improve the performance of Adidas Group’s factories. For example, the firm’s energy efficient programme is meant to help suppliers minimise their energy use. With regard to protecting the vulnerable groups, Adidas Group recognises the need to protect the rights of migrant workers in its supply chain (Adidas Group, 2015). Further, the company emphasises the importance of protecting the rights of children. For instance, in Sialkot, Pakistan, Adidas Group is working with Sudhaar, a non-governmental organisation to sponsor programmes aimed at improving access to schools by children in the rural areas. Adidas Group also focuses on an inclusive approach to diversity. In this regard, the company emphasises gender balance in its workforce and fosters an atmosphere of respect and acceptance regardless of gender, sexual orientation or nationality of its employees. With regard to community involvement, Adidas Group works with various organisations across the world. For instance, the company funds a programme that is meant to teach teamwork and respect as a way of bringing positive social change. The CSR report also highlights on the company’s engagement in humanitarian activities such as the Wings of Help that is involved in providing emergency relief around the world. On the same note, since 2012, the Wings of Help has continued to deliver aid to Syrian refugees (Dove, 2015). On another note, the firm also recognises the importance of using sustainable materials as a way of improving its environmental footprint. For example, the firm is using recycled polyester from plastic bottles and used clothing to make high-performance products used by athletes around the world. The company notes that using recycled polyester is necessary in terms of reducing the reliance on petroleum. In addition, the use of recycled polyester also minimises waste discharge and the polyester that ends up in landfills or incinerators. In 2014, the firm also continued to provide content and technical support to SAC for the development of the Higg Index 2.0. This is a suite of assessment tools that helps in standardising the measurement of environmental and social impact of apparel products (Adidas Group, 2015). Shell CSR Report The firm’s CSR report covers environment and social issues and the tools in place to manage safety, the environment and the community. The company further emphasise a focus on meeting the world’s increasing demand for energy in a responsible manner (Ekatah et al. 2011). This involves operating safely, minimising environmental impact and supporting community development. On the other hand, the firm’s environmental standards focus on important areas such as reducing carbon dioxide emissions, energy use, minimising the use of fresh water and protecting biodiversity. The company also reports about working closely with communities. This plays a role in helping Shell to understand the concerns of communities who live near their facilities (Shell Global, 2015). Through community engagement, the company believes it can bring more benefits to the communities. Such benefits include funding social investment programmes, employing the local community, training and protecting the ecosystem. While engaging with communities, Shell recognises the importance of conducting an impact assessment to understand the potential effects of its operations on people’s health and the environment, for instance (Spence, 2011). Further, the assessment of risks for the company is necessary to help in the review of its project plans, for instance, rerouting pipelines. The company further reports working closely with community members by hosting community meetings, for example. Shell also work with different organisations and this help to build trust among its stakeholders. The company’s collaboration with different organisations is meant to accomplish different purposes. For example, sharing experiences and the best practices required for sustainable development in the energy industry (Shell Global, 2015). As the company moves to the deep waters, their report acknowledges the importance of continually reviewing its procedures to improve the safety of workers and the communities near its facilities. The company also focuses on renewable energy sources. For example, Shell has increased its investment in Glass Point Solar, a company based in California that produces solar- powered steam generators used in oil recovery. In terms of social investment, the firm’s CSR report focuses on the projects it has implemented to serve the communities around its facilities globally. The firm also spends approximately $ 160million in the establishment of voluntary social investment globally. In addition, Shell also spent $121 million on programmes targeting community development, supporting relief efforts, education, biodiversity and health (Shell Global, 2015). Similarities in the three company’s CSR report In the three companies, CSR reporting is viewed as necessary in terms of integrating CSR and sustainability in the decision-making process. In essence, CSR reporting for these companies acts as a tool for identifying social and environmental issues, various risks and opportunities. Further, in terms of reporting on social, economic and environment impact on the community, these firms are in a position to enhance dialogue with stakeholders regarding sustainable development. Due to the increased negative perception of corporations, CSR reporting is viewed by the three companies as necessary to improve reputation and image (Alessia et al. 2009). The three firms also consider CSR reporting as necessary to enhance employee involvement at the workplace. As such, these companies have integrated CSR into their mainstream business operations. The three corporations also recognise the importance of CSR report in addressing the concerns of stakeholders and incorporating their views in the strategic decision-making process. In addition, the three corporations also rely on CSR reporting to disclose their successes and challenges regarding various CSR such corporate governance, employee initiatives, community development and climate change. Further, the three companies also use CSR report as a medium for accountability and transparency (Alessia et al. 2009). Differences In the three company’s CSR reports, BMW provides a comprehensive report of its business model compared to Adidas and Shell. On the other hand, Adidas CSR report lays more emphasis on suppliers in terms of addressing appropriate labour standards and helping its suppliers to develop their CSR programmes. Further, compared to BMW and Adidas, Shell is more concerned with health and safety due to the nature of its business operations. As such, the company is more inclined to disclose measures it takes to ensure the wellness of the communities affected by oil exploration in different areas across the globe. On another note, Shell appears more engaged in corporate philanthropy compared to BMW and Adidas. In addition, there is more pressure on Shell to disclose its sustainability measures to the public compared to BMW and Adidas (Alessia et al. 2009). The GRI reporting framework The three companies have complied with the GRI’s recommended disclosures in their CSR reports. Such guidelines, as recommended by GRI in CSR reporting, include economic considerations. BMW, Adidas and Shell have all disclosed their impact on economic conditions locally and internationally. With regard to environmental issues, these corporations have focused their reports on the impact of their businesses on the environment. This involves disclosing the sustainable use of energy, water and reducing emissions, effluents and waste (Raine, 2015). Ethics and integrity also form part of the CSR reporting for the three companies. This involves, for instance, the disclosure of the firms’ values and principles. In addition, the three companies also stress the importance of ethical and lawful behaviour among their workers and affiliates. In terms of considering the social impact, the three corporations have disclosed in their CSR reports how they engage social systems within regions where they operate. An example in this sense includes respecting human rights and embracing product responsibility. The CSR reports of the three firms also focus on stakeholder engagement in improving sustainable development. Other issues in the firms CSR reports that complied with GRI’s guidelines involve the disclosure of top management’s responsibility and oversight (Greenwood, 2002). Conclusion In the modern business environment, CSR reporting is more widespread among organisations due to the growing public awareness of the importance of sustainable development. As such, corporations at present have an obligation to disclose environmental, economic and social impact of their business activities as a way of improving their image in the public domain. Further, CSR is important in the current business environment because it provides corporations with an opportunity to gain competitive advantage in terms of value enhancement, for instance. In addition, CSR reports also play an important role in terms influencing consumer behaviour. In essence, consumers are increasingly basing their purchase decisions on the disclosure of responsible practices by corporations. References Adidas Group. 2015. Sustainability Progress Report. Report alert [Online] Available at: http:// www.reportalert.info /reportprofile.php?ID=72064&year=2015. Alessia, D., Sybil, H. & Sue, F. 2009.Corporate social responsibility and sustainable business. [pdf] [Online] Available at: http://www.ccl.org/Leadership/pdf/research/CorporateSocialResponsibility.pdf [accessed 14/05/2015] Avery, G.C., & Bergsteiner, H. 2011.How BMW successfully practices sustainable leadership principles. Strategy & Leadership, 39(6), 11-18. BMW Group, 2015. Sustainable value report 2014. [Online] Available at: http://www. bmwgroup.com/com/en/responsibility/svr_2014/index.html [accessed 14/05/2015] Dove, S., 2015. Adidas shares new sustainability achievements. Ecotextile. [Online] Available at: http://www.ecotextile.com/2015042021416/fashion-retail-news/adidas-shares-new-sustainability-achievements.html [accessed 14/05/2015] Ekatah, I., Martin, S., & Halabi, Abdel. 2011.The Relationship between corporate social responsibility and profitability: the case of Royal Dutch Shell Plc. Corporate Reputation Review, 14 (1), 249-126. Greenwood, R., 2002. Theorising change: the role of professional associations in the transformation of institutionalised fields. Academy of Management Journal, 45(1), 58-80. Oberseder, M., Schlegelmilch, B., Murphy, P., & Gruber, V., 2014.Consumers perceptions of corporate social responsibility: scale development and validation. Journal of Business Ethics, 124(1), 101-115. Papasolomou, I., & Kitchen, P.J., 2011.Cause related marketing: developing a tripartite approach with BMW. Corporate Reputation Review, 14(1), 63-75. Raine, I., 2015. What does GRI-Reporting tell us about Corporate Sustainability? [Online] Available at: http://pure.ltu.se/portal/en/publications/what-does-grireporting-tell-us-about-corporate-sustainability%28da86dca0-af41-11de-8293-000ea68e967b%29.html [accessed 14/05/2015] Shell Global, 2015.Sustainability Report. [Online] Available at: http://www.shell.com/global/environment-society/reporting/s-reports.html [accessed 14/05/2015] Spence, D.B., 2011.Corporate social responsibility in the oil and gas industry: the importance of reputational risk. Chigaco-Kent Law Review, 86(1), 59-85. Sustainable Brands, 2015. Adidas Partners to Help End Ocean Destruction, Releases Sustainability Progress Report. [Online] Available at: http://www.sustainablebrands.com/news_and_views/products_design/sustainable_brands/adidas_partners_help_end_ocean_destruction_release [accessed 14/05/2015] Read More