Is Corporate Social Responsibility a Sham?

It is undeniable that the application of corporate social responsibility has reaped benefits on various aspects of society. As the demands of running an organisation continue to change, corporate social responsibility (CSR) has gained a significant amount of importance in order to uphold economic, legal and ethical concerns for the company’s stakeholders and the world we live in. The prominence of these values are advantageous to both the company and society as businesses start to enforce CSR principles among their vision, as portrayed by the leading non-profit CSR business association in the world, asking it’s members to “achieve commercial success in ways that honour ethical values and respect people, communities and the natural environment.” (Porter & Kramer, 2006). As a result of this, CSR has proved beneficial to both employees and consumers, creating a sense of equity for internal and external stakeholders in a company. Furthermore, the principles of CSR require companies to apply sustainable measures in day-to-day business, ensuring an environmentally sustainable future. Moreover, the increasing prominence of CSR has created a knock-on effect for future generations, as society becomes more knowledgeable on the importance of an ethical and sustainable lifestyle. As CSR continues to grow as an integral part of business, society is bound to become a more sustainable, ethical and socially conscious place as a result of this.

The rise of CSR has had a major impact for firms’ internal and external stakeholders, namely the employees and consumers. Society is recognising CSR as a significant aspect in creating an ethical business world. In 1999, a worldwide survey was conducted, finding that more than two-thirds of the world believe that companies should be more socially responsible (Isa, 2003).  Furthermore, the Cone Corporate Citizenship Study found that 89% of American workers believed it was more important than ever for organisations to be socially responsible (Darigan, 2002). These findings represent the growing importance for CSR in society, particularly for employees, as a socially responsible company is proven to be beneficial for the workers. Studies show that 68% of employees believe that a socially responsible company treat their employees in a more equitable manner (Zaharia, 2011), putting more focus on fairer pay and motivating employee engagement in the workplace. Workers who believe their company is more ethical, are likely to be more cooperative in the workplace and have stronger relationships with employees. Maslow’s hierarchy of needs encompasses the belief that in order to be motivated, you need to satisfy a variety of needs. The incorporation of CSR in a company will satisfy a number of these needs, with workers feeling a greater sense of shared identity with the company, leading to increased motivation, and thus, making work a more enjoyable place. Additionally, consumers are realising the benefits of a more socially responsible business world, placing a high expectation on companies to be socially responsible. A recent study found that over 91% of global consumers expect companies to operate in a socially responsible manner, placing ethical measures in higher regard (Zaharia, 2011). Furthermore, 84% of consumers actively search for more ethical products and 47% are willing to pay more for a product from a business that they deem to be more socially responsible (Joyner & Payne, 2002). On the contrary, over 70% answered that they would not purchase a product from a company that was not socially responsible (Joyner & Payne, 2002). Thus, it is indisputable that the implementation of CSR has positively influenced both employees and consumers to have a more ethical and sustainable view in society.

The sustainable principles of CSR are integral to ensuring the world has a sustainable future. As defined in 1988 by Norwegian prime minister, Gro Harlem Brundtland, sustainability is “meeting the needs of the present, without compromising the ability of future generations to meet their own needs.” (Porter & Kramer, 2006). Companies are more inclined than ever to undertake sustainable thinking when it comes to their business. Firms ability to secure long term economic objectives without proving detrimental to society or the environment, is proving successful across the globe. For example, DuPont, has saved more than $2 billion from their reduction in energy use since 1990, whilst changes to McDonalds materials used to wrap their food has resulted in a 30% waste reduction (Porter & Kramer, 2006). Companies are starting to believe that it is a necessity to engage in sustainable activities in order to be a good global citizen. This is emphasized with many companies such as Target and Gap Inc., noting on their websites that sustainable activities are the “right thing to do” (Sprinkle & Maines, 2010). This is having a major impact on a sustainable future as more and more companies start to implement sustainable thinking in their business practices. In particular, energy conservation is becoming a major aspect to many businesses, leading to cutting costs and reduction in annual carbon emissions. Ecology and Environment, Inc., reported in 2008 that they had reduced carbon emissions by over 80% from its headquarters, whilst saving over $200,000 on energy reduction over a ten-year period (Ecology and Environment, 2008). Furthermore, undergoing in CSR is becoming crucial in being on top of regulatory measures, with sustainable practices being enforced over law. This has resulted in sustainable practices being maintained throughout the supply chain (Sprinkle & Maines, 2010). The continuous integration of CSR among business, has resulted in a dramatic increase in sustainable thinking, proving beneficial to future generations.

Through the ongoing development of CSR, it is unquestionable that it has created a knock-on effect for today’s society and the future generations. With the increasing demand for CSR in organisations becoming apparent, it has changed the way we live today.  In 2005, of the largest 250 multinational corporations, 64% had undergone in CSR practices, noting a shift from companies focus from profit to a more ethical way of business practice (Porter & Kramer, 2006). The Cone Corporate Citizenship Study has concluded that CSR has shifted from a short-term sales enhancement to a practice used to enhance ethical and sustainable thinking in society (Darigan, 2002). This rise has resulted in more than 70% of millennials being influenced by a company’s corporate social responsibility in determining where they want to work (Windsor, 2001). For Millennials and Generation Z, the exposure to CSR practices from companies has led to them being increasingly inclined to participate in environmental volunteer work and are more willing to make donations to company’s charitable efforts (Windsor, 2001). Furthermore, the CSR practices that firms choose to undertake often influence the general public to make an ethical or sustainable change in their way of living, creating a more socially conscious society. This is exemplified through the continuous effort from companies to reduce their carbon footprint in the hope that their consumers will do the same, with major companies such as Coca-Cola leading the way by creating a goal to reduce their carbon emissions by 25% in 2020 (Staff, 2018). The Millennial generation are demanding companies to be invested in improving society and are continuously looking for solutions that will ensure these improvements are made (McGlone, et al., 2011). As more and more consumers see the positive social and environmental impact that companies engaging in CSR have caused, the more chance that society will begin to take initiative of their own (McGlone, et al., 2011).

CSR’s contribution in making the world a better place is perfectly exemplified through a company called TOMS. TOMS was founded in 2006 by Blake Mycoskie, due to an eye-opening trip to Argentina, where he witnessed the hardships that children faced growing up without shoes (Blake Mycoskie, 2006-2019). This resulted in the creation ‘TOMS Shoes’, where every pair of shoes that were purchased, would result in a pair of shoes being donated for a child in need (Blake Mycoskie, 2006-2019). Since its creation, TOMS has donated over 60 million pairs of shoes in over 70 countries around the world (Blake Mycoskie, 2006-2019). In 2011, Blake Mycoskie created ‘TOMS Eyewear’, helping restore sight for over 400,000 people in over 13 countries that are unable to afford appropriate eyewear (Stories, 2006). Additionally, in 2014, TOMS Roasting Co. was started, where every purchase of TOMS Roasting Coffee, resulting in providing over 140 litres of safe water to a person in need. This has helped provide safe water for over 335,000 weeks in 6 different countries (Stories, 2006). Furthermore, in 2015, TOMS Bag Collection was created, with their goal being to provide training for skilled birth attendants, as well as providing birth kits to help in birth delivery in poverty-stricken parts of the world. subsequently, TOMS has successfully supported over 25,000 births around the world (Stories, 2006). Overall, the company has supported over 94 million people in delivering safe water, sight, shoes and safe birth (Stories, 2006). TOMS contribution in helping deliver basic human needs such as water, sight and safe birth, illustrates the advantageous impact of CSR for society. Despite maintaining significant profit, the company has CSR at the core of their business model, proving to be the benchmark of modern-day CSR for companies to follow. Additionally, TOMS is creating new ways of involving their consumers into their CSR through technology. This is embodied in their 2012 “Ticket to Give” campaign, picking a customer each week and giving them flights to a country that they donate their support to. This gives the consumer an opportunity to create first-hand experience in the impact TOMS makes through its CSR practices (Stories, 2006). Thus, TOMS CSR contribution has created a pathway for the future of CSR, as well as creating positive change in society.

Corporate Social Responsibility has become an integral part in business procedure, resulting in various positive outcomes on society. As the Millennial and Generation Z population start to become a focal part in the workplace, there is more demand than ever to incorporate CSR procedures focused on educating and improving society through ethical and sustainable measures. Through the equitable principles involved in CSR, both employees and consumers have been positively impacted through a shared sense of identity. Additionally, the practice of CSR has been responsible for a dramatic increase in sustainable thinking, giving the Millennial and Generation Z population every chance of an environmentally sustainable future. Subsequently, the rise of CSR has resulted in a knock-on effect for the future of the planet, with the importance of ethical and sustainable practices being a significant aspect of business operation. Through the dramatic rise of CSR in business, the world is unquestionably becoming a more sustainable, ethical and socially conscious place to live in.

References

• TOMS. [Online]. Available at: <https://www.toms.com/about-toms>. [Accessed 25 September 2019].
• Darigan, K., 2002. Cone Corporate Citizenship Study. [Online]. Available at: http://www.coneinc.com
• Ecology and Environment, I., 2008. 2008 Annual Report, New York : Ecology and Environment, Inc..
• Isa, M. K. M., 2003. Applying the Triple Bottom Line Approach. Business Times.
• Joyner, B. E. & Payne, D., 2002. Evolution and Implementation: A Study of Values, Business Ethics and Corporate Social Responsibility. Journal of Business Ethics, 41(4), pp. 297-311.
• McGlone, T., Spain, J. W. & McGlone, V., 2011. Corporate Social Responsibility and the Millennials. Journal of Education for Business, 86(4), pp. 195-200.
• Porter, M. E. & Kramer, M. R., 2006. Strategy & Society. Harvard Business Review .
• Sprinkle, G. B. & Maines, L. A., 2010. The benefits and costs of corporate social responsibility. Business Horizons, Volume 53, pp. 445-453.
• Staff, J., 2018. Climate Protection Report, s.l.: Coca Cola.
• Stories, T., 2006. How Your Purchase Restores Sight. [Online]. Available at: <https://stories.toms.com/give-sight/>. [Accessed 25 September 2019].
• Windsor, D., 2001. THE FUTURE OF CORPORATE SOCIAL RESPONSIBILITY. The International Journal of Organizational Analysis, 9(3), pp. 225-256.
• Zaharia, R. M., 2011. Employees’ Expectations from CSR: The Case of Master Students. 2011 3rd International Conference on Advanced Management Science.