Corporate
Social Responsibility (1)
What
is it?
Contents:
•
Introduction
•
Other
Issues
•
Human
Rights and Business Example
•
Environment
and Business Example
•
Consumer Issues and Business Example
•
Questions
•
Other Papers in this Series
Introduction
Corporate
Social Responsibility (CSR) is a widely defined concept that explores
the responsibilities of business towards society. There are three
broad areas: the environment; employees and neighbours; and consumers
where this responsibility lies outside of the financial responsibilities
that Companies have towards shareholders and other investors. CSR
is also linked to the idea of social and environmental sustainability;
how businesses should act to ensure that their business contributes
to a future where the environment is protected and people’s
basic human rights are protected, both in the short and long term.
Business’ role as creators of wealth for society can contribute
but the wealth must be achieved in a sustainable way.
| Environment
- Responsibility
not to pollute where they operate
- Responsibility
to make products which do not damage the environment throughout
their life cycle
- Responsibility
to improve the sustainability of all their operations
|
Employees
- Ensuring
that child labour is not used in their business
- Guaranteeing
the right of association for all employees
- Guaranteeing
the freedom to form trade unions without interference
- Guaranteeing
the right to collective bargaining
- Providing
training
- Ensuring
the health and safety of employees
|
| Neighbours
and Consumers
- Actively seeking the views of those affected by business operations
- Ensuring that products are not detrimental to the interests of
consumers
|
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Other
Issues
Consumer
Rights: Companies have responsibilities to all of those who
purchase their products, regarding the safety of the product and its
fitness for use. Human
Rights: Companies have responsibilities to ensure that
their operations never negatively influence human rights, for example
by ensuring that security personnel are properly trained and held
accountable.
Governmental
Relations: Many companies hire public relations firms to
lobby governments. The tactics employed should be open, accountable
and transparent.
Corporate
Governance: As recent scandals have shown, the extent to
which companies’ boards govern and regulate the companies’
activities is crucial for their legitimacy and reputation.
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Human
Rights and Business Example
TotalFinaElf
and Premier Oil are accused of complicity in gross human rights abuses
in Myanmar/ Burma. Soldiers retained by the companies to protect the
oil pipeline allegedly force conscripted civilians to carry heavy
supplies, during which time they are frequently beaten and left for
dead. Richard Howitt MEP, the European Parliament’s rapporteur
on CSR, claims that evidence showing that the two companies were aware
of what was effectively being done in their name was "serious
and telling", demonstrating the companies’ complicity in
this use of forced labour.
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Environment
and Business Example
In 1984
Union Carbide’s production factory in Bhopal India let out a
cloud of poisonous gas that killed thousands of people. Since then
they have failed to make full compensation to the victims and the
tens of thousands of people who still suffer from the effects of the
poisoning. According to Greenpeace, the area of the factory remains
contaminated to this day and still poses a health risk. Attempts to
hold Union Carbide and senior executives accountable have not been
successful, with Union Carbide representatives and directors often
failing to attend hearings. The Indian Government has also controversially
diluted the charges against Union Carbide. Return
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Consumer Issues and Business Example
Over the
20th Century doubts have been growing about the nutritional value
of infant formula feed for babies in place of breastfeeding. In the
early 1970s several NGOs started campaigns which raised the profile
of the issues substantially, most prominently being campaigns which
focused upon Nestlé’s role in the developing world. In
1981, an international code on the marketing of breast milk substitutes
was adopted by the World Health Assembly (of the WHO). It is still
disputed whether Nestlé acts according to the code, despite
the fact that UNICEF estimates that 1.5 million lives could be saved
each year if every child were breastfed for the first six months.
This example shows how business’ operations can have significant
impacts on those who consume their products. Return
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Questions
- Should
businesses’ responsibilities be limited to profits for their
shareholders?
- How
responsible are businesses for the non-financial effects of their
operations?
- How
far should this responsibility extend to subsidiary companies,
sub-contractors and suppliers?
- How
should companies balance their role as generators of wealth against
their non-financial responsibilities?
- How
much responsibility do businesses have for the society in which
we live?
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Other
Papers in this Series
(2)
Social Reporting HTML PDF
(255kb) (3)
Ethical Investment HTML
PDF (253kb)
(4)
Rules, Regulations and Codes HTML
PDF (259kb)
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