Adobe Systems The Corporate Social Responsibility Seto Satriyo Bayu AJi 491280@muni.cz 2 Content of the lecture 1.What is CSR 2.History of CSR 3.Why is it important and how to do it 4.Critique and argument of CSR 5.Greenwashing 6. 3 4 What is the Corporate Social Responsibility 5 F:\icsa presentation\PIC 1.wmf CSR! Is that really for me? So technical, very expensive!! I’m overwhelmed 6 What is the Corporate Social Responsibility CSR is the continuing commitment by business to behave ethically and to contribute to economic development while improving the quality of life of the workforce and their families, local community and the society at large (World Business Council For Sustainable Development) What is the Corporate Social Responsibility “CSR is the commitment of business to contribute to sustainable economic development-working with employees, their families, the local community and society at large to improve the quality of life in ways that are both good for business and good for development” (World Bank, 2008). What is the Corporate Social Responsibility 8 The responsibility of business towards the society Corporate Social Responsibility How? Business area: n No corruption n Transparency n Good relationships with customers, shareholders, business partners n Intelectual property protection n Legal Fullfilment n Social area: n Filantrophy n Human rights n Equal opportunities n Community engagement n Enviromental area: n Efficient production n Enviroment friendly behavior on all levels Why? n License to operate n Avoiding additional taxation or regulation n n The most important and strategic part for every business organization in decision making n Anticipate the future needs of society n n Competitive Advantage Corporate Citizenship Concepts Fall 2009, Ondrej Castek: castek@econ.muni.cz 11 Corporate Social… Responsibility Performance Responsiveness Emphasizes… Obligation, accountability outcomes, results action, activity History of CSR Early Works nM. P. Follett, 1918, 1924: social problems are not only a government matter n Ch. Barnard, 1938: the purpose of business existence is to serve the society n J. M. Clark, 1939: Social Control of Business n T. Kreps, 1940: Measurement of the Social Performance of Business nHoward Bowen 1953, was the first author who published a book on corporate social responsibility History of CSR Conditions n excess of demand over supply n enormous labor specialization n need for large amounts of capital n growth of capital intensity History of CSR Boom n H. Bowen, 1953: Social Responsibilities of a Businessman n A. B. Carroll: A Three Dimensional Conceptual Model of Corporate Performance. n Mid: 70s a project focusing CSR at Harvard Business School n World Economic Forum Meeting (Davos), 1973: Managers’ Code of Conduct CSR Europe was founded at the instigation of European commission Historical Perspective nEconomic model – the invisible hand of the marketplace protected societal interest nLegal model – laws protected societal interests nModified the economic model nPhilanthropy nCommunity obligations nPaternalism 15 CSR’s evolution nEarly definitions (1950s-1970s): broad and heavily rooted in the ‘social’ element n‘Conceptualisations’ and models (1970s-1980s): efforts to produce a model of CSR and its institutional role nBusiness case grows (1980s-): research turned towards analysing the financial impacts and competitive advantages offered 16 Corporate Social Responsibility (CSR) Business Responsibilities in the 21st Century nDemonstrate a commitment to society’s values and contribute to society’s social, environmental, and economic goals through action. nInsulate society from the negative impacts of company operations, products and services. nShare benefits of company activities with key stakeholders as well as with shareholders. nDemonstrate that the company can make more money by doing the right thing. 17 The Benefits of CSR for the company 18 Paulina Księżak (2016) Advantage against competitors within CSR elements ncreating a positive image of a company nshaping proper relations with all of the stakeholders nincreasing employees’ morale ntaking social responsibility of a company into consideration by potential consumers Source : Gołaszews- ka-Kaczan (2009) Fall 2009, Ondrej Castek: castek@econ.muni.cz 19 The Benefits of CSR for the society 20 Doing Well and Doing Good 21 Source : Hategan (2018) How to do CSR: Principles nVoluntariness nACTIVE cooperation with ALL involved parties nTransparency nSystematic and long-term nature nResponsibility towards the society nTripple bottom line n22 Why to do CSR: CSR activities should result in nHigher margins, better access to additional capital, lower costs, better image nHigher turnover and productivity, ability to attract better employees nLower risk, lower scrutiny n The other side: nHigher costs, cash outflows n23 Why to do CSR: Empirical research issues nCorporate financial performance nCorporate social performance nDomini 400 Social Index (DSI 400) nStandard and Poors 500 Index for socially responsible firms nBest employers, most respectable companies, etc. nDirection nCausality n24 CSR: Evolving Viewpoints nCSR considers the impact of the company’s actions on society. nCSR requires decision makers to take actions that protect and improve the welfare of society as a whole along with their own interests. 25 CSR: Evolving Viewpoints §CSR supposes that the corporation has not only economic and legal obligations, but also certain responsibilities to society which extend beyond these obligations. §CSR relates primarily to achieving outcomes from organizational decisions concerning specific issues or problems which (by some normative standard) have beneficial rather than adverse effects upon pertinent corporate stakeholders. The normative correctness of the products of corporate action have been the main focus of CSR. 26 Carroll’s Four Part Definition CSR encompasses the economic, legal, ethical and discretionary (philanthropic) expectations that society has of organizations at a given point in time 27 Carroll’s Four Part Definition 28 The Pyramid of CSR 29 Critique of CSR nMullerat (2010) notes that CSR, as many other concepts, can betwisted and used only as a PR tool. n“I do not think that most Czech companies are as responsible and fair as many of them say about themselves. Some companies have just adopted what foreign sources call “pinkwashing” or “greenwashing”; i.e. creation of an impression of a socially responsible company” (Čanik 2007) nMoon (2014) points out the difficulty of measuring the actual impact of CSR implementation nVisser and Tolhurst (2010): “it will allow companies to feel good about themselves, while communities crumble, ecosystems collapse and economies descend into chaos” Critique of CSR nRestricts the classic economic goal of profit maximization nBusiness is not equipped to handle social activities nDilutes the primary purpose of business nIncreases the power of business nLimits the ability to compete in a global marketplace 31 Arguments For CSR nAddresses social issues brought on by business, and allows business to be part of the solution nProtects business self-interest nWards off future government intervention nAddresses issues by using business resources and expertise nAddresses issues by being proactive nThe public supports CSR 32 Myths surrounding CSR 33 CSR is not for small businesses It is too complicated and technical It is too expensive It is a market gimmick It is a separate corporate initiative CONTROVERSY ON CSR One of the most controversial thing about CSR is “Greenwashing” 34 What is Greenwashing? “Greenwashing is the process of conveying a false impression or providing misleading information about how a company's products are more environmentally sound” It is to make the consumers to believe that the products are environmentally safe but are actually not 35 It’s greenwashing when a company or organization spends more time and money claiming to be “green” through advertising and marketing than actually implementing business practices that minimize environmental impact. 36 Examples: 1.Claiming the air conditioners as CFC free even after a ban on CFCs to create impression on the product makes no sense 2.An area rug is labeled “50% more recycled content than before” The manufacturer increased the recycled content from 2% to 3%. Although technically true, the message conveys the false impression that the rug contains a significant amount of recycled fiber 3.Many food products have packaging that evokes an environmentally friendly imagery even though there has been no attempt made at lowering the environmental impact of its production 37 38 “Seven Sins of Greenwashing” The sin of suggestive pictures Green images that indicate a (un-justified) green impact, like flowers blooming from exhaust pipes 39 “Seven Sins of Greenwashing” The sin of the hidden trade off Suggestion of being Green, based on a single environmental attribute, while blurring all other parameters which are maybe more important, like a Hummer that is claiming that it is a Hybrid 40 “Seven Sins of Greenwashing” The sin of no proof Claims that could be right, but are not supported by any evidence, or by any reliable third- party certification, like Household lamps that promote their energy efficiency without any supporting figures or certification 41 “Seven Sins of Greenwashing” The sin of vagueness Claims that are expressed with fluffy language with no clear meaning , like ‘planet-friendly’ packaging 42 “Seven Sins of Greenwashing” The sin of irrelevance Environmental claims that are redundantand unimportant for customers seeking environmentally preferable products. It is irrelevant and therefore distracts the consumer from finding a truly greener option, Like ‘unleaded fuel (all fuel in Europe is unleaded 43 “Seven Sins of Greenwashing” The sin of lesser of two evils These are “green” claims that may be true within the product category, but that risk distracting the consumer from the greater Health or other negative impacts of the category as a whole, Like organic cigarettes 44 “Seven Sins of Greenwashing” The sin of fibbing Out-right lying, and produce totally fabricated claims or data Like driving climate neutral 45 Find me 5 sins of Greenwashing in this ad 46 GL_Pinkwashing_Smokes.jpg green-washing.jpeg Open questions about CSR •Should companies do CSR? •Should CSR be regulated? •Should CSR be obligatory? •Do CSR have risks? 50 Image result for thank you for your attention"