Corporate Social Responsibility (CSR) as a business model for growth

By: Editor In Chief
    
Wed 6 May,2015

Conference Chairman Drs Daan Elffers at the Saudi Arabia CSR Excellence Awards
EMG CSR Consultancy is an international advisory firm specialising in corporate social responsibility (CSR) and sustainability.




Filed Under: CSR & Business

At EMG, we see first-hand how a well thought through CSR strategy strengthens an organization; those that integrate CSR at the core of their practice are better positioned to stimulate innovation, sustainably create value, and address their triple bottom line. Organizations, and particularly corporations, are increasingly influential in today’s globalised world, and are therefore, well-placed to make a tremendous and positive difference”. Drs Daan Elffers, CEO of EMG Group, and Chairman of the Advisory Council for the Islamic Reporting Initiative.

What is CSR?

Corporate Social Responsibility is a broad, continually evolving, and living concept, and the motivations driving its implementation vary. With this in mind, perhaps the biggest challenge facing industry is the lack of a coherent definition of CSR. One all-encompassing understanding of CSR is conveyed by Carroll (2006, in Safwat, 2015), who posits CSR as having four responsibilities; economic, legal, ethical, and philanthropic. The former two can be understood to relate to business ethics, that is, accordance with the principles, standards, rules and regulations that guide acceptable behaviour in a given society. It is premised on the understanding that businesses have a responsibility to society through the provision of goods and services that are demanded by society and whereby the economic viability is mutually beneficial to both organization and society. The ethical responsibility extends beyond the law and represents organizational behaviour that adheres to ethical norms of society – including employees and consumers. The philanthropic responsibility represents the voluntary roles that an organization can partake in to demonstrate good corporate citizenship, and are usually donations towards welfare causes.

CSR in a Local Context

Given this interpretation, it is important to understand CSR as a holistic venture; resigning CSR to just one of these responsibilities doesn’t do justice to the strength offered by them individually. Take philanthropic responsibility as an example; taken on its own merit, philanthropy can be an invaluable tool in helping communities through the provision or improved access to education or clean water. However, by aligning philanthropy with an integrated and holistic CSR strategy, philanthropy becomes strategic. By this, I mean that philanthropy serves to self-generate change that can be fostered by the organization in the long-term. To simplify, strategic philanthropy can generate a positive feedback loop, whereby a change in a community, such as improved access to education – and in particular, skills that may be needed for business – are offered, which over time, fosters a generation of young adults that are educated in skills that are in demand. It solves the supply-demand problem which is prevalent across many industries and their respected regions. In the Middle East, CSR is coming to the foreground. While practices akin to CSR have long been practiced, there sometimes remains a tendency to limit the definition of CSR to philanthropy. This indicates that CSR may occasionally be interpreted as a new term for an already long established practice. The message we want to convey at EMG is that philanthropy and CSR have an intrinsic relationship, and as much as lighting a second candle does not lessen the brightness of the first, implementing philanthropy as part of a CSR strategy does not take away from the deeply embedded and cultural practice. This is because while they share similar goals of welfare, CSR serves to make responsible the way profits are generated and philanthropy serves to spend these profits responsibly. Some scholars and professionals are addressing this relationship as Corporate Social Development, whereby the developments that are generated through strategic philanthropy, such as improved access to and quality of education, are fed back into the organization through the provision of a well-educated pool of talent. Therefore it makes perfect organizational and societal sense to understand CSR as an investment. And as Peter Bakker, President of the World Business Council for Sustainable Development (WBCSD), says, “Business cannot succeed in a society that fails”.

CSR Reporting

Emerging is a culture of transparency. This is an encouraging trend which is prompting organizations to report on their performance, and subsequently, their CSR strategies. It serves to gauge the responsibilities of an organization and ensure that they become – or remain- an asset to society and environment. Transparency is a pathway to trust, which many organizations may use to their competitive advantage, while others, may dislike the attention that a report brings to them. However, for us at EMG, the real crux of CSR reporting relates to the ownership of risk. The process not only yields a final report, but provides a window of opportunity to analyse and evaluate an organisation’s internal systems and processes, fairly assigning risk among departments, partners or stakeholders, by integrating them into an organization-wide process. As Alberto Andreu, Head of CSR & Reputation for Telefónica, recently said in an interview with one of our consultants, “if risk has no owner, you have a problem”. Risk can only be managed when identified and understood. Many CSR reporting tools are broad in application to offer flexibility, however, in light of this, it is perhaps more beneficial to use a reporting tool that is more tailored in its approach, such as the Islamic Reporting Initiative (IRI). The IRI has been developed with the nuances of Islamic business practice and regional concerns in mind to ensure these, such as the deeply embedded practice of philanthropy, are made visible and appreciated for their own merits.

CSR is not a static concept, and it is important that one doesn’t get caught up with the terminology or rooted context. Rather, we need to understand the common goal across all interpretations, which is a concerted effort by organizations of all types, to identify and take responsibility of the risk that it generates as part of its day-to-day running. It is a living concept, and therefore each organization’s approach will differ considerably. By moving away from industry comparisons, and instead, sharing best practice, we can ensure that each organization reaches its full potential.

Resources:

Carroll, A.B. (2006) in Safwat, A.M. (2015) Corporate Social Responsibility: Rewriting the Relationship between Business and Society, International Journal of Social Sciences, Vol. IV (1), pp. 88.

Interview with Alberto Andreu, Telefónica: http://www.emg-csr.com/blog/telefonica/
Interview with Peter Bakker, WBCSD: http://www.emg-csr.com/blog/wbcsd-sustainable-development/

 

About EMG CSR Consultancy

EMG CSR Consultancy is an international advisory firm specialising in corporate social responsibility (CSR) and sustainability. EMG supports governments, corporations, and non-profit organizations through CSR strategy development and implementation with the long-term view of sustainably creating value and fostering innovation.

EMG’s Founder and CEO Drs Daan Elffers is an experienced management consultant specialized in realizing profit and growth through sustainable development, recently named one of the 100 Most Talented CSR Leaders by the World CSR Day organization. A guest member of the Circular Economy Taskforce of the World Economic Forum, Daan is a certified Cradle to Cradle consultant (2008), trained by Prof. Dr Michael Braungart. He has been the chairman of various CSR summits in the MENA, and is the Chairman of the Advisory Council of the Islamic Reporting Initiative. He lives in Cambridge, England.

 

 




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