Nature of Corporate Social Responsibility - Essay Example

Introduction

Corporate Social Responsibility is the means of conducting a business in a way that accounts for environmental and social impact created by an organization. It refers to CSR meaning, a dedication to establishing policies that integrate responsibility practices into daily operations of businesses, as well as progress reporting on implementation of such kind of practices (Jeremy, 2015). Reports of early CSR focus on its drivers as philanthropy while currently it also centers on environmental issues and ethical labor practices. A broad commitment is supplanted to improve and protect the lives of communities and workers whereby firms conduct business operations. Examples of organizations that have incorporated CSR include TetraPak, which has been very active in supporting school feeding programmes and JLL, which promotes gender equality through its various leadership programmes (Andrew & Abigail, 2009).

Information on nature of CSR

Information touching on CSR now addresses issues that impact all areas of ethics and governance, training and opportunity, worker hiring, supply chain policies, environmental and energy impact and responsible purchasing. Such kind of work is viewed by some folks as philanthropy, charity or resource allocation which may better be shared by owners of shares. There has been continued emphasis on economic and environmental sustainability which has been the focus of most efforts of CSR (Robert, 2009). Sustainability is originally seen in terms of preservation of resources of the earth. For instance, in the year 1987 the commission of the world on Development and Environment did publish “Our Common Future”, which has become a landmark action plan towards environmental sustainability. Definition of sustainability by the commission involves “meeting the needs of the present without compromising the ability of future generations to meet their needs (Joseph, 2012).” Stakeholders now challenge companies towards development of a blue print for sustainable economic prosperity whilst caring for the environment and employees.

Reasons for emergence of CSR

Conventional investors are facing a challenge of reviewing issues of CSR while analyzing companies. The Financial Initiative of UNEP suggested to world’s largest firms in the law market to investigate institutional investors like insurance companies and pension funds (Alfred & Sheryl, 2006). The investigation was aimed at establishing the possibility for legal permission to incorporate social, environmental and governance issues into practices of ownership and decision-making. Integration of considerations of governance, social and environmental factors into analysis of investments would ensure fiscal performance which is clearly permissible and also required for argument in most jurisdictions (David, 2015).

Socially accountable shareholders have been a forecast of financial presentation while demanding companies to increase a plan of CSR for prehistoric era. In current time, typical monetary foundations have also appeared to rate CSR. A January 2005 review of ordinary asset directors establish a73% predict that communally answerable speculation pointers will become usual in typical endowment within 10 years (Christine, 2010). In 2013 July, a Spectrum grouping investigation established that 49 percent of Millennial financiers with further $1 million net worth detailed that they utilized publicly accountable criterion to complete their assortments. Such interest diminished with time – 43% of age bracket X millionaires had similar views followed closely by 34% of toddler Boomers as well as 27% of the eldest group, which the study labels as “seniors (Jeremy, 2015).”

One limitation of sustainability and CSR reports is need of ordinary performance that can lead to green washing and hyperbole. Proponents claim that organizations while operating a perspective of CSR increase their long-term profits. Critics on the other hand argue the fact that CSR distract from the economic role of business (Joseph, 2012). A 2000 research linked present econometric researches of the association amid financial and social performance and concluded that contradictory findings of past studies reported negative, positive and neutral fiscal effect due to empirical analysis that is flawed and claimed that proper specification of the study revealed neutral impact on the financial outcomes (David, 2015).

• Organizational / Managers’ response

The worldwide reporting initiative involves a multi-stakeholder process that refines common set of internationally applicable sustainability reporting guidelines. This procedure has included the lively contribution of business, environmental, investment, accountancy, research, labor organizations and human rights representatives globally. Nearly 700 organizations have published reports of sustainability or CSR (Sun & Stewart, 2010). Albeit there is progress that is realized by most companies, the adoption of policies of CSR and reporting are still at infancy stage in most corporations. Implementation of a company’s CSR adds to long-term returns via positive relations and shareholder trust. Such involves corporate action responsibility and also high ethical standards which decrease legal and business risks (Joseph, 2012). Strategies of CSR strategies do encourage the firm to ensure positive effects are transmitted to the environment as well as stakeholders that include communities, investors, employees and consumers (Luc, 2011). Such approaches revolve around proper management skills. Managers have a role in identification as well as handling of environmental and social issues. They also influence management systems and processes that coordinate functional actors in the company (Christine, 2010). Managerial practices are under influence from corporate values, managers’ perceptions and firm’s identity.

Case studies

Many companies have been on the forefront on the CSR agenda worldwide because of its many benefits. Examples of such firms are TetraPak and JLL. TetraPak has long been providing feasible support during introduction of school feeding programmes. In the year 2015, nearly 70 million children were served through the initiative (Samuel & Celine, 2011). This is a tremendous increase of 10.9 percent from 2014. New programmes were asunder implementation via TetraPak packages in Philippines and Peru. In accordance with statistics by the UNWFP, close to 368 million children found in nearly 16 countries have begun programmes of feeding in schools. Additionally, from 2000, 21 fresh countries have taken up the program while 36 have scaled up the present programmes (Jeremy, 2015). An estimate by WFP considers US$3 is gained from each US$1 that is invested in fiscal profits and includes local agricultural and educational benefits.

Another firm that incorporates CSR is JLL; which has teamed up with nearly 1100 business leaders to advocate for gender equality by signing the ‘UN’s women empowerment Principles’. There are seven such which emphasize on corporate action in promotion of gender equality (Robert, 2009). Their design is in such a way as to pave way for best practice through elaboration of gender dimension of business role and corporate responsibility towards sustainable development. Whilst signing on the principles, JLL has been advocating since time immemorial in terms of its programs and practices as well as leadership commitment (Robert, 2009).

The various programs through which JLL delivers its mandate include, ‘Changing the face of prosperity’, which involves inclusion and diversity. Another practice is Employee Resource Groups which enable learning of fresh skills in low threat environments with accessibility to senior leadership (David, 2015). There is also the ‘Male Champions of change, ‘which connects male leaders to Australian real estate market while focusing on the representation of women in leadership. Flexible work options is also a globally run practice which aids working class women and men to maintain a balance in their work and lifestyle.

Management Skills

CSR implementation is best effective when it becomes a portion of organization planning, culture and management. It affects budgeting, effectiveness measures and investment returns that are driven by managers. Several managerial skills must be applied for the success of CSR through organizational response in goods and services delivery (Joseph, 2012). A good CSR manager must be a good leader with skills such as delegation, planning, decision-making and problem solving. Communication and research skills as well as good relational grounds with other companies that are socially responsible are also vital to success in organizational management (Sun & Stewart, 2010). Management skills also involves establishment of metrics for measuring company’s performance on CSR practices.

In conclusion, corporate social responsibility is an initiative that enables firms, organizations or corporations give back to the international or local community through corporate social programmes. Examples of such firms are TetraPak and JLL, among others. TetraPak has been running school feeding programs and has gained recognition in close to 100 countries having attended more than 368 million children. The numbers are on the rise with more schools enrolling for the programme. JLL, on the other hand, promotes gender equality initiatives through leadership development and its various practices that recognize both men and women and provides capacity for them to become future leaders of the society. CSR has much significance to the organization as well as the society. Organizations practicing this initiative have more media coverage and are able to attract and retain employees, customers and investors. The society benefits through money donations and volunteerism opportunities at the firms which help build fresh skills and scale up on existing ones.