CSR and business ethics

An overview of corporate social responsibility

What is corporate social responsibility?

Corporate social responsibility (CSR) is also known by a number of other names: corporate responsibility, corporate accountability, corporate ethics, corporate citizenship, sustainability, stewardship, triple bottom line and responsible business, to name just a few.

CSR is understood to be the way firms integrate social, environmental and economic concerns into their values, culture, decision making, strategy and operations in a transparent and accountable manner and thereby establish better practices within the firm, create wealth and improve society.

 Building on a base of compliance with legislation and regulations, CSR typically includes “beyond law” commitments and activities pertaining to:

• corporate governance and ethics
• health and safety
• environmental stewardship
• human rights (including core labour rights)
• human resource management
• community involvement, development and investment
• involvement of and respect for Aboriginal peoples
• corporate philanthropy and employee volunteering
• customer satisfaction and adherence to principles of fair competition
• anti-bribery and anti-corruption measures
• accountability, transparency and performance reporting
• supplier relations, for both domestic and international supply
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Potential benefits of implementing a CSR approach

Key potential benefits for firms implementing CSR include:

• Improved reputation management. Organizations that perform well with regard to CSR can build reputation, while those that perform poorly can damage brand and company value when exposed. This is particularly important for organizations with high-value retail brands, which are often the focus of media, activist and consumer pressure. Reputation, or brand equity, is founded on values such as trust, credibility, reliability, quality and consistency. Even for companies that do not have direct retail exposure through brands, their reputation as a supply chain partner — both good and bad — for addressing CSR issues can make the difference between a business opportunity positively realized and an uphill climb to respectability.
• Enhanced ability to recruit, develop and retain staff. This can be the direct result of pride in the company’s products and practices, or of introducing improved human resources practices, such as “family-friendly” policies. Employees become champions of a company for which they are proud to work.

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• Enhanced operational efficiencies and cost savings. For example, assessing the environmental and energy aspects of an operation can reveal opportunities for turning waste streams into revenue streams (wood chips into particle board, for example) and for system-

WHAT IS BUSINESS ETHICS?

Business ethics (also known as Corporate ethics) is a form of applied ethics or professional ethics that examines ethical principles and moral or ethical problems that arise in a business environment. It applies to all aspects of business conduct and is relevant to the conduct of individuals and business organizations as a whole.

[edit] Ethics of sales and marketing

Main article: marketing ethics

Marketing Ethics is a subset of business ethics. Market is responsible to the consumers and other proximate as well as remote stakeholders as much as, if not less, it is responsible to its shareholders. The ethical prudence of targeting vulnerable sections for consumption of redundant or dangerous products/services,^[118] being transparent about the source of labour (child labour, sweatshop labour, fair labour remuneration), declaration regarding fair treatment and fair pay to the employees ^[119], being fair and transparent about the environmental risks, the ethical issues of product or service transparency (being transparent about the ingredients used in the product/service – use of genetically modified organisms, content, ‘source code’ in the case of software),^[120][121], appropriate labelling,^[122],^[123] the ethics of declaration of the risks in using the product/service (health risks, financial risks, security risks etc.),^[124], product/service safety and liability, respect for stakeholder privacy and autonomy, the issues of outsmarting rival business through unethical business tactics etc.,^[125] advertising truthfulness and honesty, fairness in pricing & distribution, and forthrightness in selling etc.

• Pricing: price fixing, price discrimination, price skimming.
• Anti-competitive practices: these include but go beyond pricing tactics to cover issues such as manipulation of loyalty and supply chains. See: anti-competitive practices, antitrust law.
• Specific marketing strategies: greenwash, bait and switch, shill, viral marketing, spam (electronic), pyramid scheme, planned obsolescence.
• Content of advertisements: attack ads, subliminal messages, sex in advertising, products regarded as immoral or harmful
• Children and marketing: marketing in schools.
• Black markets, grey markets.

 

FAIR TRADE

Fair trade advocates typically espouse a number of guidelines. The movement intends to provide market access to otherwise marginalized producers, connecting them to customers and allowing access with fewer middlemen. It aims to provide higher wages than typically paid to producers as well as helping producers develop knowledge, skills and resources to improve their lives. Fair trade advocates also seek to raise awareness of the movement’s philosophies among consumers in developed nations.^[5]

What is a Social Entrepreneur?

Social entrepreneurs are individuals with innovative solutions to society’s most pressing social problems. They are ambitious and persistent, tackling major social issues and offering new ideas for wide-scale change.

Rather than leaving societal needs to the government or business sectors, social entrepreneurs find what is not working and solve the problem by changing the system, spreading the solution, and persuading entire societies to take new leaps.

Each social entrepreneur presents ideas that are user-friendly, understandable, ethical, and engage widespread support in order to maximize the number of local people that will stand up, seize their idea, and implement with it.

• Florence Nightingale (U.K.): Founder of modern nursing, she established the first school for nurses and fought to improve hospital conditions.
• Margaret Sanger (U.S.): Founder of the Planned Parenthood Federation of America, she led the movement for family planning efforts around the world.
• John Muir (U.S.): Naturalist and conservationist, he established the National Park System and helped found The Sierra Club.
• Jean Monnet (France): Responsible for the reconstruction of the French economy following World War II, including the establishment of the European Coal and Steel Community (ECSC). The ECSC and the European Common Market were direct precursors of the European Union.

 

WHAT IS MICROFINANCE?

Microfinance is the provision of financial services to low-income clients, including consumers and the self-employed, who traditionally lack access to banking and related services.

More broadly, it is a movement whose object is “a world in which as many poor and near-poor households as possible have permanent access to an appropriate range of high quality financial services, including not just credit but also savings, insurance, and fund transfers.”^[1] Those who promote microfinance generally believe that such access will help poor people out of poverty.

 

Vodafone
That has resulted in programs like Mpesa, a pilot project that helps Africans do banking with their mobile phones. Vodafone has also changed the way it builds networks to give emergency health-care workers better access, and helps screen mobile video content for users with kids. .

Suez

Accountability score*: 58
Global 500 rank: 96
Sector: Energy and utilities
Region: Europe

Europe’s second-biggest energy producer, with plants ranging from nuclear to natural gas, has also branched into environmental services. It now operates 10,000 water-treatment plants that serve nearly 1 billion people.

ETHICAL CONSUMERISM

As consumers become more interested in aligning their personal values with the brands they buy and companies they support, companies must rise to the challenge and clearly define and articulate their corporate social responsibility (CSR) values. Consumer interest in CSR is unlikely to diminish over the coming years and ignoring consumers’ interest simply gives your competition time to establish leadership. Conversely, understanding what CSR consumer trends mean to your business allows you to capitalize on current and future efforts supporting this significant market transformation. In this column, we’ll demonstrate the importance of CSR as well as examine related consumer attitudes and behaviors.

Coupling social/environmental responsibility with corporate values appeals to many consumers, who in turn “vote for values with their dollars.”

The highest interest is in environmental programs (82%), followed closely by workforce (80%), and finally community (73%). These three issues are more important than the lagging corporate ethics category (29%) to the general population.

The media is likely to have played a role in these shifting attitudes. As an independent source, the media can provide a sense of authenticity to the consumer. And, environmental consciousness is currently a fashionable subject for the media, as newscasts celebrate breakthroughs in eco-friendly buildings or major publications devote cover stories to eco-topics.
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As people continue to strive for a feeling of connection by participating and expressing their values through their purchasing behavior, it is important for companies to develop a sound CSR strategy. Brands and companies that can support this interest in sustainable consumption and make a positive contribution appealto consumers’ current sentiments, particularly in today’s ethical consumerism marketplace.

Archive for the ‘Ethical Consumerism’ Category

Pause to support a cause

Published 23 September, 2009 Ethical Consumerism 1 Comment
Tags: pause to support a cause

Paying consumers for their opinions is not a new tactic, but market researchers are now proposing to give money to causes instead.

The ‘Pause to Support a Cause’ initiative will pledge money to a not-for-profit of your choice when you fill out a market research survey.

Wooden Bicycles Galore

So you’ve gone from Prius to Bicycle, how more Sustainable can your transport be? 

How about a Bicycle made out of a Sustainable material, like Wood maybe?

At last month’s Milan Design Week, designer Ross Lovegrove, with Danish Bicycle Company Biomega, unveiled a Bicycle handmade in Denmark out of Bamboo, a material abundant in China and the fastest growing woody plant on the planet.

Boxed Water is Better for the Earth?

Boxed Water is Better for the Earth

90% of Container made from Trees sourced from Renewable, Ethically Managed Forests.

20% of Profits to Water Relief & Reforestation Foundations. 

Recyclable in Most Areas.

Launched this year, Boxed Water is set to make a splash with its claim that is ‘better for the earth’.

Currently only available in the US, well, only in Michigan really, will boxed water take over the world?

Fiji Water: Food Miles Greenwash?

Published 12 January, 2009 Articles , CSR , Carbon Management , Ethical Consumerism 2 Comments
Tags: bottled water, Carbon Footprint, fiji water, Food Miles, Greenwash

They compare Fiji Water with Apples & Lamb from New Zealand which have a lower carbon footprint (including transport) than locally sourced alternatives in England.

Why New Zealand Imported Produce have Lower Carbon Footprints:

a) Increased Productivity from More Sunshine

b) Lower Direct Environmental Impact from Less Fertililzer Use

c) Lower Indirect Environmental Impact from Greater Access to Renewable Energies

The above factors probably don’t hold true for Bottled Water though, it is hard to imagine that Bottled Water produced ‘Locally’ will have a greater environmental impact than Fiji Water.

A Carbon Neutral Hotel – URBN Shanghai

Shanghai, one of the world’s most rapidly growing cities, in a country which produces the world’s highest levels of carbon emissions (24% of Global Total), seems to be a fitting location for one of the world’s first hotels that claim to be Carbon Neutral.

In typical Shanghai fashion, this project draws from diverse backgrounds and skills from across the globe. Conceived by a Californian and a Chinese-Australian and designed by 3 Canadian Architects based in China, including Tais Cabral, a Brazillian native who imbued the interiors with ‘a sense of luxury, modernity and comfort’.

URBN Hotel Shanghai

So what makes this development so special then?

It’s Construction

The site itself is ‘recycled’ with the developers transforming a former factory building.

Bricks and Tiles used were Salvaged from Demolished Buildings.

All the Hardwood used was Reclaimed.

Additional Building Material was Locally Sourced.

It’s Design

Natural Shading is provided by Living Bamboo.

Ambient lighting comes courtesy of Fluorescent Lights housed in Lanterns.

Power is Supplemented by Passive Solar Shades

Rain Water Retention Basins are used

The Air Conditioning is Water Based

It’s Programs

All Energy Used (yes, including staff who commute and all supply deliveries) is Offset with Carbon Credits

URBN has grand plans for the future too, in an interview with Jill Stalowicz of Feel More Human, URBN indicated plans to expand to 20 Hotels throughout China including ones in Beijing, Hangzhou, Dalian & Suzhou and to include a retail section with ‘home-grown organic products’.

Since its opening in December 2007, the project has received significant attention from the travel world, named in Conde Nast Traveler’s 2008 Hot List, cited by Fodor’s Hot List and reviewed by the the NY Times.

Not Alone

It however is far from alone with ‘Eco Tourism’ growing by leaps and bounds in recent years. 

Kapawi Lodge – Ecuador

Conde Nast’s Concierge.com highlights some of the best,

from a lodge in Kenya run by Maasai Tribesman without skimping on Italian Linen…

to one in the Ecuadorian Amazon, run by the Achuar Natives on Solar Energy, while not denying traveler’s their Filet Mignon…

and even a property in Egypt built out of Clay and Salt with only oil lamps & candles to light the way, without skimping on the comforts that persuaded Prince Charles and Camilla to holiday there!

Doing Good Trumps Design and Innovation

Published 20 November, 2008 Articles , CSR , Ethical Consumerism 2 Comments
Tags: brand loyalty, cause marketing, consumer behaviour, ethical consumer, return on involvement, support causes

When choosing products, a whopping 42% of consumers  value a brand’s commitment to a social purpose over both design and innovation!

This was a key finding in goodpurpose’s ‘Global Study of Consumer Attitudes’ report published this week.

The report is extremely timely as many firms would be reconsidering their commitment to non-core, cause-related activities. It sends a resounding message that if anything, they should be investing more into it than ever in the face of recent economic events.

A couple of compelling reasons why:

• 7 in 10 would remain loyal to a brand that supports a good cause
• 7 in 10 have either given the same or more despite economic conditions
• The Chinese consumer, an increasingly lucrative market, has emerged as a clear leader in the above metric, with 58% giving more despite the economic downturn

Why are they doing it? In a word, contentment.

42% quote “helping others and contributing to my community” as their largest source of contentment compared to “the shopping experience” which only 25% agreed with as a source of contentment.

“They can bring ‘double value’ to their customers, who get a product they want, plus support for a cause they believe in” – Mitch Markson, founder of goodpurpose

The term “return on involvement” makes an appearance in the report, referring to an increasingly popular metric which recognises participation and involvement (e.g. in causes) as true builders of brand loyalty. “Doing Good”, which can create stronger emotional bonds between the brand and the consumer, can hence translate rather easily into “Doing Well”.

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