Youth Canada

Corporate Social Responsibility: Not interested in Business? Think again.

5-09-2008 by Kimberly Bui

Corporate Social Responsibility: Not interested in Business? Think again.

“There’s no business to be done on a dead planet”-Ado Leopold

Climate change’s biggest enemy these days is the corporation. I mean, the truth is that the big bad businesses only care about profit and nothing about the environment, right?

Wrong.

Welcome to today’s society in which everyone, especially large corporations, is under the microscope of the public to go green.

If you are anything like me, entering business sounds interesting, but being a part of that cutthroat area of our society that insidiously depletes our ozone layer isn’t very appealing. I can honestly say that I felt this way - that is, at least until I learned about Corporate Social Responsibility, or CSR. This is why I decided to write about what CSR is, how it is useful to today’s entrepreneurs, how it also applies to the consumers and things to watch out for.

Corporate Social Responsibility

There is no universal consensus on the definition of CSR, but most people agree that it is a concept in which a corporation takes responsibility for the impact that it has on its stakeholders (customers, suppliers, employees, shareholders, etc.) through methods such as use of ethical labour. In the past all that corporations had to worry about was one bottom line: profit. However, priorities are being completely rearranged; nowadays, corporations must be concerned with three bottom lines: people, planet, and then lastly profit.

So what does that mean?

People: A triple bottom line (TBL) business will put the people first. This refers to fair labour practices in the areas that serve the company and the communities the company is serving. This concept includes giving back to and strengthening the community that supports the company, such as reinvesting in heath care, education, and volunteering.

Planet: This means that TBL businesses have environmentally sustainable practices. They put in an effort to reduce their ecological footprint, find ways to use renewable resources in a responsible manner, and dispose of waste in a safe and legal process. Environmental practices are often criticized for being more costly, but in the long run it allows the company to profit more.

Profit: Finally profit itself. Let’s face it, there’s no point in being in business if you’re not going to make a profit. However, although in the past profit has only benefited the company, these days it needs to benefit the stakeholders and the affecting communities as well.

Trends and Benefits

Today’s Canadians put the environment as one of their top concerns, and with climate change, who can blame them? It’s no longer good enough to be a part of the green movement; it has to be a lifestyle change. And for it to have any significant impact, businesses have to change their ways. “75% of workers think that their organization’s responsibilities extend to the greater good of mankind”, so while CSR may seem like a trend, it’s a concept that has to be utilized to make the biggest difference in the world today.

But there aren’t just benefits to society; CSR also benefits the business through …

Human Capital- When employees take pride in their company they will more likely want to work for a company because incorporates social responsibility into its corporate strategy. By educating and allowing employees to be involved in things such as fundraising and volunteering, their views and lives can also be broadened.

Risk Management- With every business there are risks, and a good reputation takes years to build and only 5 seconds to destroy. Being sincerely concerned about CSR and the greater community allows more leverage with consumers and therefore offers better risk management when a scandal or accident happens.

Brand Distinction- Speaking of scandals, society these days thrives on scandals. Just about anyone can start a rumour that will have the media in uproar. Being a socially responsible company can make the difference, because it will allow you to stand out with ethical practices. For example: Nike vs. The Body Shop. Do you know which company uses ethical labour and which doesn’t? See, being socially responsible allows consumers to trust a company and separates them from other companies.

License to Operate- CSR also ensures that the practices are legal and safe. Most countries have laws and standards that must be met, including proper disposal of waste, a health standard food products must meet, and certain labour rights that employees have. Being a socially responsible business allows companies to ensure that they are operating in a legal and safe manner as to avoid spending money on fines, taxations and damage control.

Don’t fall for a Sinner

Like any concept, there are companies that seem to practice CSR to look more environmental then they actually are; this is called green washing. A study has “found that 99% of 1,018 common consumer products randomly surveyed for the study were guilty of green washing.”

There are 6 Sins of Green Washing (and the percentage of companies guilty of them) …

1) Sin of Hidden Trade Off- This is when a business claims to be doing something green like being energy efficient while doing something environmentally dangerous like disposing of hazardous waste inappropriately,

2) Sin of No Proof-Many companies claim to have organic materials or good labour practices when there is really no proof to the claims at all.

3) Sin of Vagueness- Again, many products claim to have all natural organic materials, when the reality is that some of the most dangerous chemicals like arsenic and formaldehyde are organic.

4) Sin of Irrelevance Many companies claim to be CFC- Free when really CFC’s were banned 20 years ago, so they’d better be CFC-Free! However, this tricks consumers into thinking that the company is doing something for the better of the environment when it really isn’t doing much.

5) Sin of Fibbing-Some companies just plain out fib by saying that it is certified by an environmental organization when it isn’t.

6) Sin of Lesser of Two Evils- Finally, we all know some companies are just bad, producing things like harmful chemicals and products like cigarettes and unnecessary pesticides. However this sin refers to those companies who only want to be socially responsible to offset the damage their products do to the environment and community.

Be Aware

With all that’s said and done, it is hard to “not fall for a sinner” or know which companies are serious about making a difference. People can get away with practically anything, and seeing the honesty and accountability of a business is hard. Commerce affects everybody and being aware of which companies are socially responsible is critical for change to happen. It’s now up to you, companies get away with a lot, and really it’s the consumers that let them I’m not expecting CSR and green washing to change your life, it’s just something to keep in mind next time you’re out shopping or see an interesting ad. Also if you’re planning on entering business (or just looking for a little extra something to think about with the microcredit challenge), CSR is definitely something to look into (a good start is the documentary, The Corporation). Businesses are the most influential members in today’s society; they have the power to corrupt our world through pollution and unfair practices, or the power to change it, by fulfilling what the world’s desperate needs are right now. The direction taken is ultimately decided by the consumers supporting the business.

“Somewhere along the line, humanity is being called to higher moral.”

Special Thanks to C.Moffat, J.Tse

Resources Consulted:

http://en.wikipedia.org/wiki/Greenwash

http://en.wikipedia.org/wiki/Corporate_social_responsability



KIMBERLY BUI is a grade twelve student currently attending Burnaby Central Secondary School. She is also a Shad Valley Calgary 2008 Alumnus, and has been interning with IMPACT since summer 2008. In the past year, music has pretty much taken over her life and she’s loved every minute of it.

Image courtesy of user "mick yi" at Flickr.com via Creative Commons License.
http://www.flickr.com/photos/mickyates/303707417/