CSR: Providing Sustainable Productivity

Corporate Social Responsibility (Img source- Google)

“Successful people have a social responsibility to make the world a better place and not just take from it.” –Carrie Underwood

Sometimes I think what and whom is a business for? What is the link between Corporate Advantage and Corporate Social Responsibility ?

Corporate Social Responsibility may be defined as a form of corporate self-regulation integrated into a business model. It functions as a built-in, self-regulating mechanism whereby a business monitors and ensures its active compliance with the spirit of law, ethical standards, and international norms. CSR functions strive to strike a balance between the economical & the strategic impacts of the organization, trying to decrease negative environmental impact and increase the competitive edge of the organisation with a sense of sustainable development. Many companies have recently affiliated themselves with this term. So, as a result Corporate social responsibility is gaining a lot of buzz these days. In recent years, many companies have incorporated CSR as a core component of their business philosophy, but there is a big difference between being committed to the concept and actually doing CSR effectively, either from the perspective of the business or the social issues that are being addressed.

CSR: It started off as a defensive stance

CSR really grew out of activist movements a few decades ago and began to put pressure on businesses to be more responsible for any of harms- be it environmental, social or labor issues that were being created through their activities. External activist groups started pointing fingers at businesses and the business set ups were trying to defend themselves, thereby creating the notion of CSR as a kind of a necessary evil. So, as long as a company thinks of CSR in terms of satisfying its stakeholders, dealing with activist organizations etc– it will give rise to a defensive setting. It’s only when the company begins to think about the social dimension of  the activities in its operations and value chain as well as dimensions of the competitive context in which it operates and social issues within the core frameworks that the company uses, the real essence of CSR will triumph.

Integrating CSR into its strategic core:

Nestle is one of the largest seller of bottled water in the world, and the issue of access to fresh water has been emerging as a critical social issue in the recent times. There is cynicism about the fact that the biggest use of fresh water is for agricultural use, which tends to be wasteful. Now Nestle, not through its operations of bottled water but through the purchase of cocoa, sugar, dairy products and coffee throughout the world, has resulted in tremendous interactions with farmers all over the world. So, this has emerged as an opportunity for them to make a meaningful influence on fresh water access through drip irrigation and other techniques that can conserve water in agriculture.

To sum it up, often CEOs of many companies find it difficult within their companies to really integrate and build CSR into the operations of a company. It has to be built into the strategic decisions of the company and into the responsibilities of the managers. The concept needs to be tied up and instilled into the minds of people. At this moment we find that mane CEOs have understood and incorporated this, but the structure within many companies is such they are not able to integrate CSR in way it needs to be integrated.




Harvard Business Review on Corporate Responsibility