Environmental Industrial Management Essay


Environmental Industrial Management Corporate social responsibility (CSR) has been a hot topic in business circles for decades. The topic has gained even greater attention in the last few decades in the wake of increased attention to the impact of business activities on the environment, economy, and the society (Flammer, 2013; Schrempf-Stirling, Palazzo and Phillips, 2016). This paper discusses the principles of CSR; the integration of social, economic, and environmental aspects in the organisational agenda; the importance of transparency, accountability, and stakeholder engagement in CSR; and the notions of materiality in CSR and sustainability reporting as outlined in the Global Reporting Initiative (GRI) G4 guidelines.

Whereas there is no commonly agreed definition, CSR generally refers to the activities business organisations deliberately undertake with the aim of promoting social, economic, and environmental sustainability (Crowther and Aras, 2008). It denotes the pursuit of economic objectives while at the same time consciously pursuing social and environmental objectives (Foote, Gaffney and Evans, 2010). The need for business organisations to focus beyond profit objectives is informed by the fact that their activities affect, or are affected by, a wide array of stakeholders, including employees, customers, suppliers, the government, communities, and the public at large (Flammer, 2013). CRS, therefore, requires that business organisations ought to consider the needs, concerns, and interests of their stakeholders in their quest for profit maximisation.

In the UK, CSR has increasingly gained prominence in the recent past. Indeed, with the government playing a frontline role, CSR is now a fully-fledged industry in the UK (Idowu and Filho, 2009). With CSR efforts going back to as early as the 20th century, UK has been termed as a world leader in CSR (Schwartz, 2011). The government has even created a department specifically aimed at promoting CSR, exemplifying its commitment to CSR. With a supportive regulatory and political environment, most organisations in the UK have ever more paid greater attention to CSR, and CSR has become a norm.

CSR is based on four major principles. These include: legal compliance (adherence to the relevant local and international laws and regulations); fulfilment of stakeholder interests (acknowledgement and attention to stakeholder needs and concerns); transparency (clear and accurate disclosure of the organisation's policies, decisions, activities, and impact on the society and environment); and respect for human rights (policies, practices, and processes must uphold basic human rights) (Social Security Investment Fund [SSIF], 2010). From these principles, it is clear that CSR is not just about minimising environmental pollution or participating in social causes as often thought. CSR also encompasses persistent conformity to the relevant laws, regulations, and ethical standards as well as consideration of stakeholder interests. As put by Idowu and Filho (2009), CSR is about organisations taking responsibility for their actions; or in other words, social accountability or corporate conscience.

In addition to the four principles, CSR has three broad dimensions: economic, social, and environmental (SSIF, 2010). The economic dimension within the context of CSR does not relate to profitability; it denotes aspects...


In the UK, for instance, the Corporate Governance Code provides important guidelines for ensuring sound corporate governance in firms, while authorities such as the Office of Fair Trading and the Competition Commission provide guidelines for protecting the interests of consumers. The social dimension generally denotes the promotion of societal welfare (SSIF, 2010). This covers two aspects: equal and humane treatment of employees (occupational health and safety, good working conditions, reasonable compensation, respect for diversity, professional development opportunities, and so on) and involvement in the local community (charity work, social causes, environment protection, partnership with community organisations, and so forth). In the UK, legislations such as the Employment Rights Act and the Equal Pay Act recognise the importance of organisations respecting the rights and needs of their employees.
The environmental dimension entails commitment to environmental sustainability (SSIF, 2010). It includes aspects such as emission reduction, waste minimisation, energy efficiency, renewable energy, and water preservation. Environmental protection in the UK is a major subject of public, policy, and organisational agenda, particularly in recent decades. The government has championed a set of regulations and guidelines aimed at promoting environmental sustainability, including the Environment Protection Act, the Clean Air Act, the Hazardous Waste Regulations, and the National Air Quality Strategy. On the whole, the three dimensions of CSR highlight the social, economic, environmental, as well as the health and safety aspects that ought to be incorporated in the organisational agenda. Integrating these aspects is the core of CSR. Indeed, the GRI's G4 sustainability reporting guidelines recognise the significance of business organisations disclosing the social, economic, and environmental impact of their activities (GRI, 2013).

The aspect of disclosure brings to the fore an important aspect of CSR -- transparency and accountability. The notion of transparency means that business organisations ought to truthfully reveal their strategy, practices, policies, governance measures, and ethical standards (GRI, 2013). Also, business organisations must disclose the ways in which their operations affect the society, economy, and the environment, whether negative or positive. Indeed, transparency and CSR cannot be separated. Complete transparency, however, is yet to be achieved. It is common for organisations to hide negative aspects of their operations in an attempt to guard their reputation (Idowu and Filho, 2009; Schrempf-Stirling, Palazzo and Phillips, 2016). Transparency is important because organisations are accountable not only to themselves, but also their stakeholders (Schrempf-Stirling, Palazzo and Phillips, 2016). They are accountable to customers, employees, suppliers, shareholders, regulatory authorities, communities, and the society. The primary objective of CSR is fulfilling the interests of these stakeholders. Fulfilling stakeholder interests means that stakeholder engagement is crucial for CSR. For organisations to comprehensively understand the interests of their stakeholders, they must involve them in their decision-making processes (GRI, 2013).

CSR is not…

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