Нина Пусенкова - Английский язык. Практический курс для решения бизнес-задач

Effectiveness. Concern for social and environmental matters is rare in poor societies (a hungry person would rather eat the whale than photograph it). As a society becomes richer its citizens develop an increasing desire for a clean environment and protected wildlife, and both the willingness and financial ability to contribute to this. The ‘Triple Bottom Line’ is said to be an example of the choices available to the citizens of a society made wealthy by businesses attending to business. Thus, Adam Smith’s Invisible Hand will ensure that business contributes most effectively to the improvement of all areas of society.

Nationalism. Some countries adopt a nationalistic approach with the view that they must look after their own citizens first.

Inertia. The difficulty of achieving global agreement on simultaneous policy may render such measures at best advisory. People would be unwilling to undergo a depression or recession in order to remediate lost ecosystems.

Many large companies now produce annual reports that cover Sustainable Development and CSR issues, and these reports are often externally audited. But there is no common template for the reporting and the evaluation methodology varies between companies. Critics often comment that some of these reports are just an ad and as an example note that Enron published a glossy «Corporate Responsibility Annual Report» and that tobacco corporations such as BAT also produce social reports.

The Global Reporting Initiative (GRI) is an attempt to standardize sustainability reporting and the AA1000 standard is an attempt to improve their legitimacy.

Criticism of CSR

Some critics of CSR, such as Milton Friedman, argue that a corporation’s principal purpose is to maximize returns to its shareholders, whilst obeying the laws of the countries within which it works. Others argue that the only reason corporations put in place social projects is utilitarian; that they see a commercial benefit in raising their reputation with the public or with government.

It is clear that a CSR activity generally can only be effective at achieving social or environmental outcomes to the extent that it maximizes profits: hence the CSR slogan – «doing well by doing good». This requires that the resources applied to CSR activities must generate a higher return than those resources could obtain if applied anywhere else, e.g. capital investment, lobbying for tax relief, outsourcing, fighting against unionization, or taking market risks.

Some argue that it is self-evidently «good» that businesses should seek to minimize any negative social and environmental impact of their economic activity. It can be beneficial for a company’s reputation to publicize any environmentally friendly business activities. A company which develops new engine technology to reduce fuel consumption will be able to promote its CSR credentials as well as increase profits.

A conflict can arise when a corporation espouses CSR and its commitment to Sustainable Development on the one hand, whilst damaging revelations about its business practices emerge on the other. The McDonald’s Corporation has been criticized by CSR campaigners for unethical business practices, including mistreatment of workers, misleading advertising, and unnecessary cruelty to animals. Similarly Shell has a much-publicized CSR policy and was a pioneer in triple bottom line reporting, but was involved in 2004 in a scandal over the misreporting of its oil reserves, which seriously damaged its reputation and led to charges of hypocrisy.

Source: Wikipedia.

People, Planet, Profit: The Value of CSR

CSR, also referred to as corporate stewardship or corporate citizenship, has become increasingly important to companies competing in today’s business climate. Companies focusing on the ideals of People, Planet, and Profit further bolster the notion that addressing social and environmental issues supports the attainment of financial goals and can be critical to long-term corporate success.

But the biggest question surrounding CSR is not «Is this the right thing to do?» but a more in-depth, «Why should we do this?» Profitable business and CSR are not mutually exclusive. There are many solid reasons as to why CSR is good business.

Branding

The market has become oversaturated with company messages touting the newest, hottest, or cheapest. This has lessened the effectiveness of traditional marketing efforts and jaded the audiences they are aimed at. Relationship and cause marketing are two avenues in which companies can realize the value of their brand, build good will, and establish lasting impressions with their stakeholders. Brands like Avon, The Body Shop, Timberland, and Target have made their social commitments a fundamental component of their corporate mission, and reputation. This attitude is reflected in their marketing efforts and has resulted in a stronger brand reputation, and increased revenues. People want to align themselves with companies they admire and respect.

Conversely, companies that have tarnished their brands by not acting responsibly in regard to their stakeholders have discovered that ignoring social responsibility has irreparably damaged their brand image as well as their bottom line. Enron and WorldCom are two highly publicized examples of companies who put profitability ahead of responsibility. The glare of the media is aimed directly at corporations nowadays; any small glitch in a company’s reputation could dramatically impact their revenues both long– and short-term.

Socially Responsible Investment Institutions

Socially responsible investment funds (SRIs) offer perhaps the most direct financial link to CSR. The influence of SRIs internationally can be seen in the hundreds of funds, the number of shareholder resolutions filed, and the financial performance of companies associated with SRIs.

Globally, this group of funds has tremendous financial leverage. While each fund offers a unique perspective, common themes include their CSR criteria used for company selection and evaluation. Equally, companies not meeting a minimum threshold of social performance are those typically targeted for shareholder resolutions.

Building a business case for CSR is strengthened by the performance of SRI-based companies. The Dow Jones Sustainability Index (DJSI) has historically tracked the performance of companies with active CSR initiatives, measuring them against companies not aligned with CSR principles. Companies with CSR programs have consistently outperformed those without CSR over the past five years.

Legislation and Litigation

Generally, a company’s actions are governed by its adherence to laws and compliance with business regulations. Historically, it has been assumed that corporate leaders are guided by their own moral compass; values and ethics influence decisions and legislation is not required to govern morality and behavior. However, certain corporations have sullied the reputation of business in general. As a result, recently we have seen a rise in legislation, fines, and litigation surrounding corporate responsibility. To be in compliance with current laws, avoid penalties and litigation, adopting a philosophy of CSR makes good business sense.

Avoidance of litigation is another motivator for companies to adopt socially responsible practices. Increasingly, activist and non-governmental organization groups are using litigation in an attempt to change corporate behavior. Previously, efforts by these groups included shaming a company to change behavior through adverse media and filing shareholder resolutions to demand change. These same groups are now filing lawsuits in their attempts to force companies to embrace socially responsible practices.

Employees and Customers

Employee recruitment, retention, and morale are strong business reasons for corporations to integrate CSR into their organizations. Research studies that evaluate the impact that CSR has on employee recruitment and retention offer the following data.

Companies demonstrating strong CSR commitments find it easier to recruit employees, particularly in tight labor markets.

A 1997 study of 2,100 MBA students found that more than half said they would accept a lower salary to work for a socially responsible company.

CSR efforts strengthen a company’s position as an employer of choice.

Morale, motivation, innovation, productivity and creativity are all improved by providing the opportunity for people to work for organizations that not only support their career but also provide for much deeper meaning in their life.

Integrity at work relates to employee loyalty. 40% of employees who say their senior leaders have high personal integrity are also truly loyal to their organization. That number drops to only 6% when employees do not believe their senior leaders have integrity.

Also, numerous studies have shown that there is a direct correlation between CSR and the ability to attract and retain customers. Customer choice has traditionally been driven by price, quality, appearance, safety, convenience, and accessibility. However, increasingly other value-based criteria are influencing purchasing decisions.

Product Improvement / Cost Reduction

Lower recruiting costs, larger market share, fewer regulatory fines, waste reduction, cost savings through recycling, and increased stock price and shareholder value are all tangible metrics for CSR.

Studies also suggest that reduced regulatory costs, and customer complaints are additional financial benefits realized after the implementation of a CSR program. However, there is research that supports a more direct cost/benefit analysis of CSR efforts. Intel provides a good case study of specifically measuring and quantifying their CSR improvement and associated financial benefit.

Intel has a system of assessments and audits that yields hard data regarding the social and environmental performance of its suppliers. This data allows Intel to better manage its supply chain by enabling the suppliers to become part of the company’s continuous improvement process. This process of assessing and auditing its supply chain has been integral in drawing a correlation between Intel’s CSR efforts and their business implications.

Source: www.eorm.com

Essential Vocabulary

1. Corporate Social Responsibility (CSR) – социальная ответственность корпораций

2. obligation n – обязательство, обязанность, долг

oblige v – обязывать, принуждать; делать одолжение

3. sensitivity n – чувствительность

sensitive a – чувствительный

4. sustainable a – устойчивый

5. supranational a – наднациональный

6. charity n – благотворительность

charitable a – благотворительный

7. endowment n – вклад, дар, пожертвование; (дарственный) фонд; дарование

endow v – обеспечивать постоянным доходом, наделять, одаривать, делать дар

8. foundation n – закладка (фундамента), фундамент, основание; обоснование, основа; фонд, пожертвованный на культурное начинание; учреждение или организация, существующая на пожертвованный фонд

9.triple bottom-line – тройная итоговая строка

10. advocacy n – защита, адвокатура; пропаганда

advocate n – адвокат, защитник, заступник, сторонник

advocate v – отстаивать, защищать, выступать в защиту, пропагандировать

11. division of labor – разделение труда

12.welfare n – благосостояние, благоденствие, благополучие; благотворительность

13. remediation n – исправление, лечение, восстановление

remedial a – исправительный; лечебный; ремонтный; являющийся средством судебной защиты

14. template n – шаблон, лекало, калибр

15. Global Reporting Initiative (GRI) – глобальная инициатива по отчетности

16.ad (advertisement) – реклама (амер. жаргон)

17. legitimacy n – законность; закономерность; законнорожденность

legitimate a – законный; допустимый; оправданный; законнорожденный

18. tax relief – налоговая скидка, освобождение от уплаты

19. union n – союз, профсоюз

unionization n – охват профсоюзом, объединение в профсоюз

unionize v – охватывать профсоюзом, объединять в профсоюз

20. environmentally friendly – экологически дружественный (безопасный)

21. credential n – мандат, удостоверение личности; рекомендация, (мн.) верительные грамоты

22. stewardship n – управление, распоряжение

steward n – управляющий, распорядитель; стюард

23. corporate citizenship – социально ответственное поведение корпораций