Day 237 – What is Corporate Social Responsibility (CSR)?, Continued

From Wikipedia on the topic of CSR:

 

“Corporate social responsibility (CSR, also called corporate conscience, corporate citizenship or sustainable responsible business/ Responsible Business)^[1] is a form of corporate self-regulation integrated into a business model. CSR policy functions as a self-regulatory mechanism whereby a business monitors and ensures its active compliance with the spirit of the law, ethical standards and international norms. In some models, a firm's implementation of CSR goes beyond compliance and engages in "actions that appear to further some social good, beyond the interests of the firm and that which is required by law."^[2][3] CSR aims to embrace responsibility for corporate actions and to encourage a positive impact on the environment and stakeholders including consumers, employees, investors, communities, and others.”

 

So to clarify from yesturday, CSR is more of a global initiative that is being implemented, encouraged, and directed by various organizations as well as the UN to encourage corporate responsibility towards a common ‘good’.  One of those organizations is the Global Reporting Initiative (GRI).  From their website:

 

“The Global Reporting Initiative (GRI) is a leading organization in the sustainability field. GRI promotes the use of sustainability reporting as a way for organizations to become more sustainable and contribute to sustainable development.”

 

From Wikipedia, GRI is:

 

“The Global Reporting Initiative (GRI) is a non-profit organization that promotes economic sustainability. It produces one of the world's most prevalent standards for sustainability reporting — also known as ecological footprint reporting, environmental social governance (ESG) reporting, triple bottom line (TBL) reporting, and corporate social responsibility (CSR) reporting. GRI seeks to make sustainability reporting by all organizations as routine as, and comparable to, financial reporting.”

 

So, we have CSR which is a global initialtive of corporate self-governance to encourage corporation to both regulate themselves and report on themselves in regards to changing and implementing business practices for the common good, such as making products that are environmentally friendly, avoiding slave and child labor, giving back to communities, etc.  In order to implement the CSR and encourage it world wide, orgainizations like GRI have been created.  But there are other bodies in addition to GRI, such as the Intergrated International Reporting Council (IIRC).  From Wikipedia regading IIRC:

 

“The International Integrated Reporting Council (IIRC), of which Mervyn King is chair, was convened in order to aid businesses and investors as they begin to adopt Integrated Reporting. Launched in 2010 by HRH The Prince of Wales with international partners. The IIRC was formerly known as the International Integrated Reported Committee, being renamed in 2012. The Prince's Accounting for Sustainability Project (A4S) acted as the Secretariat for the IIRC until January 2012.

The IIRC calls itself 'a global coalition of regulators, investors, companies, standard setters, the accounting profession and NGOs. Together, this coalition shares the view that communication about businesses' value creation should be the next step in the evolution of corporate reporting'. It states its mission is to create the globally accepted International <IR> Framework that elicts from organizations material information about their strategy, governance, performance and prospects in a clear, concise and comparable format. The Framework is intended to underpin and accelerate the evolution of corporate reporting, reflecting developments in financial governance, management commentary and sustainability reporting.”

The IIRC produced a Discussion Paper in 2011 from which the overwhelming feedback demonstrated overwhelming support for Integrated Reporting and endorsed the development of a global Framework. It also concluded that the primary audience of integrated reports is investors in order to aid their allocation of financial capital.”

And then we also have the United Nations Global Impact, from there website:

“The UN Global Compact is a strategic policy initiative for businesses that are committed to aligning with ten universally accepted principles for human rights, labor, environment and anti-corruption.

​The UN Global Compact and GRI signed an agreement in May 2010 to align their work in advancing corporate responsibility and transparency. As part of this agreement, GRI will develop guidance regarding the Global Compact’s ten principles and integrate UNGC issue areas into the next iteration of its Sustainability Reporting Guidelines. The UNGC will adopt the GRI Guidelines as the recommended reporting framework for the more than 5800 businesses that have joined the world’s largest corporate responsibility platform.”

So, what I am getting at here is establishing the framework of what exactly CSR is; and from what I can see, CSR not a set of global laws, but a set of global initiatives for specifically international corporations to voluntarily adhere to, (and arguably for their own good such as increasing market share and profitability due to increased consumer awareness of their ‘ethical and altruistic’ business practices) with the intent to improve living conditions for those living on this planet (AKA, the ‘common good’) through encouraging corporate responsibility to those living on this planet, of whom are commonly referred to as the ‘stakeholders.’ 

The guidelines, encouragement, and implementation for these standards are managed by various organizations, including GRI, UNGC, and IIRC, to name a few.  These organizations have created what is commonly referred to as ‘sustainability’ reports with specific guidelines and standards in specific categories such as human resources, environmental concerns, supply chain concerns (i.e. labor), philanthropy, volunteering, etc. – wherein corporations are encouraged to report on each category based upon specific standards created by these organization.

But is this ‘global initiative’ of corporate ‘self-regulation’ for the common ‘good’ really effective?

Well, one interesting article from Nov 2012 found on the CSR-reporting website sheds some interesting light on that topic.  As a direct quote from the article:

“Let me just repeat that so it's clear:

Labor Indicators: 86% of companies claim they report and only 11% actually do.

Human Rights Indicators: 62% of companies claim they report and only 20% actually do.”

I will have to pick up on this tomorrow as time is out for me.  I will also updated footnotes at a later date.  For now, you will have to just take me for granted that these are direct quotes.  We will explore this article and its implications in the next writing.