Corporate Social Responsibility is just one of many names commonly used to describe an organization's collective approach to help enable responsible action and ensure longevity and sustainability. Many of the most renowned organizations in CSR have been successful in building new core competencies as a result of the integration of principles of sustainability throughout the business. As a result, they often directly attribute increased profitability to their endeavours in this area.
The core concepts of CSR relate to the social, environmental, and ethical responsibility of organizations. Society no longer automatically accepts financial profit at the expense of the environment and society. A reflection of this is the demand for increased transparency of and accountability in corporate behaviour. In response, reporting and assurance has grown among organizations looking to respond to stakeholder needs. Additionally, organizations now actively engage with stakeholders as a means to build relationships within the community, identify opportunities to create mutual benefit, and create open dialogue.
CSR is about more than the volume of donations or projects—it's about how an organization treats its employees, participates as a member of the community, and uses its influence through decisions and support.
Organizations with advanced CSR strategies typically engage in:
- The development of policies to support organizational values that build and maintain integrity
- Impact management—both environmental and social (due to operations, investment, and technology development)
- Broad communication with stakeholders (including reporting and consultation)
- Voluntary initiatives promoting the principles of corporate responsibility, such as the United Nations Global Compact's Carbon Disclosure Project and Extractive Industries Transparency Initiative.
Participation in community development creates a tremendous opportunity for enterprises to demonstrate their commitment to corporate responsibility. Through aligning community investments and donations with business and community development objectives, businesses can build measures to help ensure responsible development that forms part of a larger community, regional, or national development plan. These plans benefit greatly from a coordinated effort where public, private, and civil society work together to address challenges and create leading approaches.
The ways in which organizations can participate in community development are through economic development planning, education and training activities, volunteerism, philanthropy, local investment, local infrastructure development, expansion of operations, partnership initiatives, and local sourcing and contracting. These activities, when carried out within a consultative, inclusive, and participatory process, can help build community capacity and strengthen the trust and confidence the community members have in the business community.
An important element of being a responsible member of the community is demonstrated by a commitment to philanthropy. Philanthropic priorities should be determined through an evaluative process based on the donor organization's values and role in society, and the existing community needs. Through this process and by collaborating with civil society organizations, a coordinated approach to community development can enhance community-wide benefit.
The limited funds available for philanthropy increase the need for strategic collaboration. Often, creating community-wide benefit can be best achieved by focusing efforts on a limited number of initiatives. By doing this, the company can both increase the impact of their contributions and enhance the benefit of the relationship for the company.
As a part of the push towards a strategic approach to corporate philanthropy, it is now common for donor organizations to have defined priority contribution areas, established objectives with performance indicators, and a variety of programs that support the larger organizational commitments to the community. These types of progressive approaches illustrate the shift to strategic management of corporate philanthropy and illustrate the changing role of business in society.
As the challenges of globalization continue to create new risks and opportunities throughout society, many organizations struggle with the complexities of international law, policy, and control within the context of human rights. By engaging in meaningful dialogue regarding the promotion and protection of human rights, the business world is making explicit commitments to:
- Interpret, understand, integrate, and promote observance of the United Nations (UN) Declaration on Human Rights, the International Labor Organization (ILO) human rights declarations, the Global Compact, the Organization for Economic Co-operation and Development (OECD) Guidelines for Multinational Enterprises, and other international human rights core conventions and treaties
- Use influence to promote the observance of the above mentioned conventions and treaties beyond the first-tier among direct and tier two suppliers, host-country governments, and partners, and within civil society at large
- Implant and monitor policies, codes, and management controls in order to encourage appropriate conduct and facilitate information sharing and communication
- Adopt additional policies for the protection of the rights of specific groups, such as indigenous people, children, and women.