Corporate social responsibility concepts and frameworks

Business

Corporate Social Responsibility

Corporate Social Responsibility (CSR) is the way in which a business is accountable for the social and environmental force that is created by the business. CSR referrers to an obligation to developing policies that integrate responsible practices into daily business processes, and to reporting on growth made toward implementing these practices.

Common CSR policies include:

Adoption of internal controls reform in the wake of Enron and other accounting scandals;

Commitment to diversity in hiring employees and barring discrimination;

Management teams that view employees as assets rather than costs;

High performance workplaces that integrate the views of line employees into decision-making processes;

Adoption of operating policies that exceed compliance with social and environmental laws;

Advanced resource productivity, focused on the use of natural resources in a more productive, efficient and profitable fashion (such as recycled content and product recycling); and Taking responsibility for conditions under which goods are produced directly or by contract employees domestically or abroad.

Over the last five years great steps have been made toward integrate CSR into the core culture of many major companies (Corporate Social Responsibility, 2010).

The Procter & Gamble Company started as a small, family run soap and candle company in Cincinnati, Ohio, in 1837. Presently P&G markets almost 300 products to more than five billion customers in nearly140 countries. Procter & Gamble's corporate tradition is rooted in the principles of personal integrity, respect for the individual and doing what's right for the long-term. More than 98,000 P&G employees work every day in order to provide products of advanced quality and value to the world's consumers. Improving the lives of consumers around the world is about more than just grand products. In Poland, P&G has partnered with the Polsat Foundation to provide important medical equipment for ill children. Money is raised through a P&G operation known as Give Children the Sun. Give Children the Sun has made over $4.5 million since 1999. These funds have fashioned the Polish family liver transplant program, funded Poland's first hospital for children with burns, and given state-of-the-art equipment for spinal surgery for children (P&G, n.d.).

Companies like P&G are a tremendous force around the world. Their market capitalization is bigger than the GDP of many countries, and they supply consumers in more than 180 countries. With this standing comes both responsibility and opportunity. Their responsibility is to be an ethical corporate citizen, but their opportunity is something far greater, and is embodied in their Purpose (The Purpose of Power, 2010).

P&G defines their commitment to sustainable development as making sure that a better quality of life exists for everyone, now and for generations to come. They have a long history of a sustainability leader and remain dedicated to improving consumers' lives through P&G brands and by contributing to the sustainability of the planet as well as many communities around the world (CSR Profile of Procter & Gamble, 2010). Their Purpose facilitates to unite them in a common cause and growth plan. It is commanding because it promotes a simple idea to improve the lives of the world's consumers every day. P&G grows by coming into contact with and improving more consumers' lives in more parts of the world. While this philosophy defines their commercial opportunity, their culture reflects the bigger opportunity of improving lives through and beyond their branded products and services (The Purpose of Power, 2010).

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Every year, 128,000 people die from maternal and neonatal tetanus, which is a completely preventable disease. For the fourth year in a row, Pampers is teaming up with UNICEF in order to give vaccines to vulnerable women and their children in need. This effort gets their consumers involved. With the purchase of a pack of Pampers, one dose of the vaccine is given to those in need. This campaign has shaped the highest consciousness ever for maternal and neonatal tetanus, which has helped to put the disease back on the agenda of health authorities. Since the beginning of the campaign, a total of 45.5 million women and their babies have been sheltered against maternal and neonatal tetanus. Pampers has dedicated itself to providing the vaccine in order to protect an additional 33 million women and their babies in at least 32 countries around the world (Designed to Matter, 2009).

This year, they have added a new form of employee involvement. P&G and UNICEF have teamed up to offer P&G employees in Western Europe the opportunity to take a three-month paid sabbatical and work with UNICEF. The program is geared towards employees who have always wanted to take on humanitarian work but have not had the opportunity to do so before. UNICEF will profit from the diverse backgrounds of P&G employees as they relate such skills as communications, promotion, leadership training, and supply chain management. Even though resource necessities for UNICEF are ever-changing, three to four assignments are anticipated per year (Designed to Matter, 2009).

Every day there are nearly 4,000 children who die as a result of not having clean drinking water available. But a special assortment of P&G Beauty Care products, each with its own hydration benefit, is helping fight this problem. For each purchase within The Aqua Collection, safe drinking water is donated to children in developing countries through P&G's Children's Safe Drinking Water program. CSDW is a nonprofit program run by P&G which leverages P-R ™ water filtration technology to provide clean drinking water in the developing world. P&G will provide 4 billion liters of clean water between 2007 and 2012 through this program. So while consumers have benefitted from moisture where their hair and skin need it, 50 million liters of water have been donated to date through this partnership with the Beauty Care business. Again, the involvement of P&G employees has had a direct impact on the program (Designed to Matter, 2009).

India has the world's greatest amount of uneducated children. Nearly half of all children in India do not attend school. P&G's Shiksha program is dedicated to fighting this trend, by helping to create a more educated, progressive nation. This program funds hard work to address the fundamental causes of reduced access to education, such as poverty, health issues, and access to immunization. In the cases where schools just don't exist, the program helps to fund construction. Shiksha also gains benefits from the direct participation of P&G employees. Every year, employees participate in a Shiksha Walk-a-thon, joining their families and others in raising awareness for the cause (Designed to Matter, 2009).

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If people think that the men and women who are operating some of the world's most powerful corporations, are just sitting around talking dollars and cents all day, they are very wrong. There are many executives out there who recognize the requirement in addressing serious global issues while doing serious global business. One of the main points that experts often make is that the discussion surrounding corporate social responsibility has often had a negative view. From this viewpoint, corporations have been seen as primarily the problem. Corporate social responsibility schemes have looked at ways that corporations can work on being seen as less bad. This includes things like reducing the usage of natural resources and improving worker conditions. It has been thought though that when one focuses only on being less bad, by definition one can never be good. This approach neither sends a positive message, nor is it a sufficient foundation for a strong, sustainable business model (MacNealy, 2007).

From the perspective of responsibility and opportunity, Procter & Gamble has recognized many new ways in which to bring new products to new consumers. A few of the ways that P&G is doing this, include teaming up with UNICEF to introduce NutriStar, which is a powdered drinking product that addresses micronutrient malnutrition in some populations and by acquiring the PuR brand to bring low-cost water purification know-how to consumers in developing markets. The company also promotes better hygiene in at-risk communities, which has the benefit of forming new markets for P&G's soap and toothpaste products. From sustainable coffee to eco-efficiency Stepping away from the report, let's look at a couple of other ways P&G is looking to both make money and make a positive difference in the world (MacNealy, 2007).

Socially responsible coffee procurement is also an issue of major significance for P&G. Through its Millstone brand, P&G is partaking in certified green coffee programs that are enabling eligible farmers to become specialty coffee producers and receive a premium fee for their coffee. Another way that P&G is constantly striving to make a difference is by becoming eco-efficient. This is done by maximizing production while minimizing waste (MacNealy, 2007).

P&G improved the total product that it shipped from 18.5 million metric tons to 21.3 million, from 2004 to 2006. During this same time they reduced non-hazardous waste from 300 metric tons to 289, dangerous waste from 21 metric tons to 19, and greenhouse gas discharges from 2.937 million metric tons to 2.889 million. The company's water usage during this same time frame increased only slightly. P&G has recognized that there are three pillars needed to support its sustainable development strategy. These include environmental protection, economic development, and social responsibility (MacNealy, 2007).

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Procter and Gamble's commitment to sustainability has been shown by its development of new products. Product development is geared towards the preponderance of consumers who would like to improve sustainability outcomes without comprising value or quality. During 2008, Procter and Gamble was able to diminish packaging waste by changing many of their standard carton packaging to a fully recyclable seal tight plastic material packaging. This modification in packaging has resulted in an 80% decrease in the amount of packaging that is being used compared to carton packaging (Lloyd, 2009).

Environmental forces disclosed by Procter and Gamble have included water usage, energy usage, carbon emissions and total waste. The company has reported that energy use at its household care plant in Canada has decreased by 20% through upgrades to plant apparatus. Procter and Gamble has also highlighted the seemingly impressive 86% decrease in waste achieved at their Bangkok beauty care plant, which resulted from a waste de-watering process reducing the volume of waste material. It is not disclosed though whether this procedure will be replicated at other Procter and Gamble manufacturing operations around the world (Lloyd, 2009).

Many projects in the developing world have promoted from the assistance of Procter and Gamble. In combination with the United Nations, vaccinations to protect against maternal and neo-natal tetanus have been made accessible for mothers and babies in developing countries. Consumers of the Pampers brand of nappies have assisted Procter and Gamble's efforts with the purchase of one pack of Pampers nappies providing one vaccination. Safe drinking water and hygiene crusades have also been funded with the aid of consumer purchases of selected Procter and Gamble products. Projects to boost access to education, including Protecting Futures: Keeping Girls in Education which has provided sanitary protection products so that girls can remain in school are highlighted in their sustainability program (Lloyd, 2009).

Employee commitment initiatives along with encouraging employees to take individual responsibility for sustainability matters by reducing waste, travel and energy use and the Live, Learn and Thrive program has provided many opportunities for employees to participate in volunteering. Other employee engagement practices have included an idea challenge in India and sustainability educational presentations from senior management associates. Procter and Gamble has said that that it is committed to being part of the answer in relation to sustainability. To that end, the company has taken part in an assortment of stakeholder and industry joint projects including product safety, climate change and assisting the developing world (Lloyd, 2009).

Similar to other large and multi-national organizations, Procter and Gamble's corporate social responsibility and sustainability initiatives are comprised of a mixture of waste minimization and reducing use of natural resources, assistance to communities in the developing world through increasing access to the organization's products and increasing employee engagement through projects including employee volunteering schemes (Lloyd, 2009).

Research has established that the large majority of the resources that are used by consumer products happen not in manufacturing, shipping or at their end of life, but in how they're used at home. In order to help decrease the overall impact of these goods, and to help individuals lower their environmental forces, Procter & Gamble has launched in the United States its Future Friendly campaign. The Future Friendly campaign has been in place in the United Kingdom and Canada since about 2007. It is a multi-brand and multi-platform effort in order to raise awareness about greener products and greener practices. In addition to displaying the Future Friendly logo on the packages, P&G is also working to inform its customers on how best to decrease the impact of their daily lives. This can be seen in the fact that nearly 80% of the energy used in the typical load of laundry comes from heating the water for the washing machine. Using cold water, and a Future Friendly product like Tide Coldwater, can help people to save that energy and cut their home energy bills at the same time (P&G Launches U.S. Campaign to Highlight 'Future Friendly' Products, 2010).

Products that carry the Future Friendly label have begun to appear in retail stores around the country. P&G has also been promoting the campaign through television and newspaper ads. The goal that P&G has is to provide conservation education to at least 50 million U.S. households by the end of 2010. With Future Friendly, they are trying to inform mainstream consumers on how to protect natural resources in their homes. These consumers don't want any apparent declines in performance or increases in price. As an alternative, they want to buy the brands they already know and trust and comprehend how using these products, and adopting other simple behavior changes within their homes, can help them lower their force on the environment (P&G Launches U.S. Campaign to Highlight 'Future Friendly' Products, 2010).

Along with the Future Friendly campaign, Procter & Gamble has also released the results of a survey that was conducted with Ipsos Public Affairs. This survey documented the state of the green marketplace. Among the findings of the study include the facts that: