The Value of Corporate Social Responsibility - Case Study Example

The Value of Corporate Social Responsibility THE VALUE OF CORPORATE SOCIAL RESPONSIBILITY GRACE SARKAR Order No.417098 04 March 2010 Table of Contents Memo 3 Introduction 4 How is social responsibility measurable 5 What potential rewards could our company claim 6 Is it our job to get involved in social causes 7 If we decide to get engaged 7 Measuring the impact and effectiveness of CSR programs 9 Conclusion 10 Sources 11 MEMO An Analysis of Current Corporate Social Responsibility Practices and Their Effectiveness To, The Board of Directors, Nestle Dear Members, It gives me immense pleasure to present an analysis of the Current Corporate Responsibility Practices followed by our Company and their Effectiveness. Corporate Social Responsibility (CSR) is a highly acclaimed concept and is fast emerging as an issue of top priority around the globe. Nestle has the advantage of having incorporated the concept of CSR into our management system since the birth of our corporation in 1867. The raw material of our product directly links us to thousands of farmers and their farmlands across the globe. Hence, it becomes naturally incumbent for us to follow the principles of sustainable environment. We can only carry forward our vision to broaden our concern for sustainable environment by spreading the concepts of CSR wherever we go. I hope your find the analysis meaningful and interesting. With best wishes, XYZ President, Nestle THE VALUE OF CORPORATE SOCIAL RESPONSIBILITY Introduction It is difficult to measure Corporate Social Responsibility (CSR) on the basis of profits or loss of a company. The nature of CSR is internal or external to a company. That is, the company may choose to internalize CSR by integrating CSR standards to its daily routine such as the one followed by us at Nestle (Nestle, 2010). Or the company may choose to externalize CSR operations by assisting environmental non-governmental organizations (NGOs) and concentrating on their business activities without actively getting involved with CSR issues. The nature of CSR followed by us at Nestle is not too difficult to analyze because we are very clear about our fundamentals. CSR is so integrated in our system that it has become a part and parcel of our business. We are proud of our integration with CSR. Different experts on management have different views about CSR. This difficulty is exasperating because it does not allow CSR to be clearly defined. However, the management at Nestle are agreed on the fundamentals of CSR. We have a mutually advantageous situation with CSR. That is, the benefits of CSR to Nestle are in direct proportion to the benefits that CSR receives from us. Notwithstanding the fact that we have such advantageous link with CRS, there are areas that we could explore for further benefits. Hitherto, we have not made any research on the actual amount of benefits that we could source from CSR. In this paper, we will lay an outline of the areas where we believe there are plenty of businesses that we can generate through CSR (Chen, Derek; 2009). How is social responsibility measurable It is not be possible to measure the social responsibilities. Social responsibilities are immense. As a company, we can do our bit to contribute to social responsibilities. We can do this in two ways. We can either get directly involved with social projects. Or we could associate with any government or non-governmental organization who is involved in social projects. Although it is difficult to measure CSR, we have been following CSR principles since long years now. The quality and quantity of our involvement in sustainable environment has been quite substantial. As we grow, the quantum of our contributions to CSR is only bound to grow. "Nestl's environmental stewardship is guided by three principles: - Our responsibility towards society, present and future; - Our desire to delight consumers; - Our dependence on a sustainable environment that can provide the high quality resources we need to make good food and beverages (The Nestle Policy on Environmental Sustainability, 2008). Commitment to community through excellence and healthy working standards contribute to the CSR of a company. Safeguarding environmental concerns and opting for cleaner, atmosphere-friendly products reveal close links between CSR and business strategy. The links between CSR and business strategy are clear although they may not be tangibly visible. A company's activities come under the watchful gaze of consumers and investors who, in all probability, may opt for goods or investments produced by Nestle rather than another company that does not follow CSR guidelines (Corporate social responsibility increases company value, 2008). Our environmental concerns are unparalleled. We are second to none in the industry on the question of CSR. We have been following the precepts of CSR when the concept was not appropriately acknowledged in the industry. Five years ago, CSR was not considered useful by many executives. Today, there are an overwhelming number of executives who regard CSR as an integral component of a company (The importance of corporate responsibility, 2005). What potential rewards could our company claim, what good would such investment do for the company We have substantially invested in CSR and it is yielding benefits. You only have to go through our balance sheet in order to find out the enormous financial rewards we reap as a result of our policy towards sustainable environment. Nestle's commitment to CSR through sustainable environment is exemplary. Nestle spends billions of dollars on milk, cocoa and coffee although it does not own any agricultural land. It spends part of this money on educating and training their farmers on getting better yield of milk, cocoa and coffee. The result is they are the leading corporation in their field of activity. Nestle's direct contact with individual farmers ensure effective communication and yield fabulous results. Nestle's hands-on policy with their farmers not only enable them achieve company goals but also CSR. This benefits the entire corporation of Nestle. The customers receive reliable, quality products and shareholders receive sound financial returns. Nestle's example demonstrate the depth of nature's intrinsic value. Undoubtedly, Nestle performs in innovative technological environment and observe laudable business standards (Nestle, 2010). Is it our job to get involved in social causes, or should this be left to political leaders By all accounts, we are under an obligation to be involved in social causes. Our survival depends on the goodwill of society. Nestle manages its social obligations through pragmatic management of natural resources by directly being involved with farmers. We educate and train our farmers on the latest techniques available for production of milk, coffee and cocoa. These techniques are environment-friendly. Our investments on these issues provide tremendous returns and promote environmental welfare. The board of directors of Nestle consists of men and women of high caliber and awareness and assiduously oversees the corporate culture (Nestle, 2010). It would be difficult proposition to consider relying only on politicians to bring about environmental reforms. It is far better to continue doing what we are successfully involved in and promote CSR. If we decide to get engaged, how do we determine where to invest, or in which causes-can we assume we know what is needed for the common good As mentioned earlier, Nestle is successfully engaged in CSR. Sustainable environment has a huge role to play in our business strategy. We invest in environment-friendly technologies and educate our suppliers on the use of these technologies. "Specific to our food and beverage business we have identified our four priority areas as follows: Water used by all our suppliers operations and by consumers. As a founding signatory of the United Nations Global Compact CEO Water Mandate, we continue to: - work to reduce the amount of water withdrawn per kilo of product; - assure that our activities respect local water resources; - take care that water we discharge into the environment is clean; - engage with suppliers to promote water conservation, especially among farmers; - reach out to others to collaborate on water conservation and access, with a particular focus on women and children. When selecting agricultural raw materials we: - Prefer to use agricultural materials which are produced based on sustainable practices and are locally available; - Provide technical assistance on sustainable agriculture production methods with our local Nestl agricultural services or through partnership with public agricultural services and research organizations; - Promote cooperation with other stakeholders in the food chain to leverage sustainable development in agriculture worldwide, in particular through the Sustainable Agriculture Initiative Platform that we co-founded. During the manufacture and distribution of our products, we use efficient technologies and apply best practices to: - reduce the amount of energy consumed per kilo of product; - utilize sustainably-managed renewable energy sources, where economically viable; - control and aim to eliminate emissions, including greenhouse gases; - recycle or recover energy from by-products. The packaging of our products is critical to guarantee our high quality standards, to prevent food waste and to inform consumers. We strive to: - reduce weight and volume of materials; - lead the development and use of materials from sustainably-managed renewable resources; - support initiatives to recycle or recover energy from used packaging; use recycled materials (The Nestle Policy on Environmental Sustainability, 2008). Our products are daily consumed by every strata of society. We can only progress qualitatively so that our customers continue to esteem our products. Measuring the impact and effectiveness of CSR programs Our technologies and production system is among the best in the industry. Thanks to the vision of our capable leadership, our reputation is good and rank among the best in the industry. In my view, as I have already mentioned, we must stick to environment as our CSR strategy. We already have in place technology that is environment-friendly. We have made CSR our corporate identity. We have made it our policy to do business only with those who uphold environmental values. We partner with dealers who follow our beliefs and principles on environment. In this venture, we do not wish to show ourselves as classy or choosy. We only wish to promote our desire to uphold values in the greater interests of society at large. Conclusion Our company has consistently followed the path of technological research and innovation. Its policy of treating its employees as its best assets has yielded favorable results and has enhanced its market position. The company has consistently followed its growth pattern by opening new branches and accepting new dealers. The company's emphasis on growth through emerging technologies, geographical expansion, and good quality products has paid rich dividends in term of recognition and value. We already have a very good system in place. We are committed to our policy of providing excellent products. We are focused on environmental factors on our long-term decisions. We provide challenging, enjoyable and rewarding work environment that make employees strive for excellence (The importance of corporate responsibility, 2005). Sources: Chen, Derek; The Value of Corporate Social Responsibility, 03 March 2009, http://www.academia-research.com/files/instr/417098_sample%20of%20BEPP.pdf Corporate social responsibility increases company value, 11.02.2008, http://www.innovations-report.com/html/reports/economy_finances/report-103037.html Ethics in our World Today, 12 February 2010, http://www.academia-research.com/files/instr/417098_BEPP%20Assignment%20S10%20Social%20Responsibility-1.pdf Hellsten, Sirkku & Mallin, Chris; Are 'Ethical' or 'Socially Responsible' Investments Socially Responsible Journal of Business Ethics, 2006, http://www.academia-research.com/files/instr/417098_Are%20Ethical%20or%20Socially%20Responsible%20investments%20socially%20responsible.pdf Jones, Kevin and Bartlett, Jennifer, 21 May 2008, The Strategic Value of Corporate Social Responsibility: A Relationship Management Framework for Public Relations Practice, http://www.allacademic.com/meta/p_mla_apa_research_citation/2/3/2/4/9/p232491_index.html Nestle, 2010, http://www.nestle.com/CSV/ The importance of corporate responsibility, Economist Intelligence Unit, January 2005, http://graphics.eiu.com/files/ad_pdfs/eiuOracle_CorporateResponsibility_WP.pdf The Nestle Policy on Environmental Sustainability, 2008, http://www.nestle.com/Resource.axdId=CA5BDB64-6E13-4CDD-B310-CBF5AB826DA3 What is the Value of Corporate Social Responsibility An answer from the Brazilian Sustainability Index, http://www2.coppead.ufrj.br/engl/images/stories/eventos/047_-_rossi.pdf Read More