Chapter 4: CSR the new moral code for doing business

-CSR is an emerging, yet poorly defined process used by some as a fasion statement through glossy report and websitesm and by others as a petential framework for demonstrating a more responcible approach to doing business.
-CSR (or sustainable development, which is closely affiliated concept) is generally regarder as the opposite of short-termizm.

Growing Business Imperative:

-4 categories of commercial penalties and incentives:

1. SRI (Socially Responsible Investment) and shareholder targeting:

-SRI and shareholder targeting are developments that are beginning to receive serious attention from financial analysts and institutional investors.
0Banks and asset managers are screening their shareholdings in favour of companies that demonstrate commitment to social and envir programmes.

-the "hassle" of picking non-SRI- stocks might have share price implications.

-SRI is an investment strategy that takes into account a company's ethical, social and envir performance as well as its finnacial preformance.
-SRI has supplanted "ethical investment" as the criterion for judging responsible business.

2. Regulation, Reporting and Liability:

-corporate codesof conduct often linked to reporting initiatives (Global Reporting Initiative, FTSE4Good , ISO 140001)
-PR "greenwash"-smokescreens designed to delay or deter regulatory measures;

-Regulation, often enforced through financial instrumentsm reporting and liability not only have a bottom line impact, but take the initiative away from organization in determining how broad social and environmental goals can be acheived.

3. Competitive Advantage:

-concerned consumers look at the corporate face behind the brand and this influences purchasing decisions.

4. Reputation opprotunity costs:

-The opportunity cost of damage to reputation-loss of existing investment and innovation in marketing;difficulty with recruitment and staff retentionl advertising that is undervut by public perception-merit serious consideration;

-As society becomes lee tolerant of companies that do not conform to social and envir. standards, the risks to reputation are much greater;
-"doing the right thing"  by adpoting and integrating a value system into the organization actually does generate financial value;

What constitutes good socially responsible corp behaviour

-CSR transormation under 3 themes-eco-innovation;social accountability; political responsibility.

New Business Values:

-Ethics and vakues---the definition has evolved to embrace eco-efficiency, business ethics, investment strategies,human rights and wider social agenda.

John Elkington, 6 values:
  1. ultra-transparence
  2. open governance
  3. equal opportunity
  4. multiple capitals (human, social, natural)
  5. real diversity
  6. shared learning
-So, a combination of legal , regulatory and moral pressure is leading to a changed perception of the goals of business, and growing acceptance of the idea that responsible business entails social and environmental performance and reporting.

CSR best practice policy development and mngt.

-4 phased approach recommended is mutually supportive with each stage feeding into the other 3. (see p.91)

Phase 1: Assesing and Planning:
-Eastablishing leadership and commitment:
(eg. Develop and obtain approval for framework for mngt;
Review business principle and values;)

Phase 2: Policy and Target Setting
-Addressing feedback and policy review
-(eg. Asses feedback, comllete gap/risk analysis;
Validate or revise business principles and values;
Agree strategy , priorities and actions required ofr implementation)

Phase 3: Implementing Policy and Training:
- Consider the most appropriate ways of securing understanding and buyin acrooss the org.
-(eg.training employees,sminars, middle mngt toolkit;CSR ambassador network.

Phase 4: Stakeholder engagement:

(-eg. cope plan account and report;
-Intregrate
-Commit to continuos refinement and imporvement)

-CSR must be embedded into the DNA of the org.

Summary: -

-CSR does offer a route for creating more flexible and anticipatory reputation risk mngt processes, by sensitizing the business to risk associated with unfamiliar patterns of social risk;

-It also means to influence stakeholders which can help shift the risk burden form one of passive response to one on more active engagement and management.

-CSR supports reputation risk strategies by:
  • managing short0term rick by acquiring quality info throught dialogur;
  • accessing valuable  marketplace and social trends date;
  • moving towards consensus and away form conflict throught better stakeholder engagement;
  • influencing views and behaviour inside and outside the org with associated performance benefits;
  • enhancing value throught socially respondible Investment (SRI).







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