What does CSR mean for your organisation? Putting theory into practice

What does CSR mean for your organisation? Putting theory into practice

Corporations have been under increasing pressure to strengthen society and reduce their environmental damage. Should organisations play an active role in this? We argue that yes, it is imperative that they do! Corporate Social Responsibility (CSR) plays a vital role in this. But what does it mean to be responsible?

CSR is defined as corporations taking responsibility of their societal impact. As a result, CSR should be embedded in an organisation’s strategy and actions.

CSR is interlinked with sustainability. Sustainability is an approach to progress without compromising future generations ability to meet their needs (UN World Commission). Sustainability has three pillars: the economic, social and environmental pillars. These are known as the triple bottom line (Elkington, 1997). A corporation that is serious about CSR analyses the economic, social and environmental impact of its actions.

What does this mean for your organisation?

The UN Global Compact, a UN initiative to promote CSR, outlines the five defining features of CSR and how they should translate in an organisation:

  1. 1.      Principled Business
  2. 2.      Efforts of strengthening society
  3. 3.      Leadership Commitment
  4. 4.      Reporting progress
  5. 5.      Promoting local action

Why should CSR be undertaken?

CSR is imperative for the long-term success of the company and, most importantly, for the sustainable development of society.

Stakeholder theory (Freeman, 1984) explains why. Stakeholders are groups that can affect or be affected by the achievements of an organisation. This includes employees, local communities, competitors, regulators, shareholders, media, or environmental/customer advocates. An organisation must work in collaboration with its stakeholders because they have Power, Legitimacy and Urgency.

Focussing now on the business case for CSR, an organisation’s reputation is dependent on its CSR. Reputation has a large part to play in perceptions of an organisation. Stakeholders use reputation in two ways: it fills their lack of understanding of an organisation, and enables them to deal better with uncertainty over a firm’s behaviour. For example, reputation has an impact on the customer’s perception of the likelihood that a firm will produce in a Third World Country for exploitation.

Therefore, by embedding CSR into an organisation’s strategy, organisations can enact sustainability in society, and enhance their stakeholders’ relationships.  Watch this space to find out how we are supporting organisations to take up CSR practices in recycling, water consumption, employment of disabled persons, eco-labelling and non-financial reporting.


Author: Xavier Lewis Rodriguez / Bridging to the Future