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PHILANTHROPIC OR COMMERCIAL?
At first sight, CSR appears more philanthropic than
commercial, so why should anyone adopt it? Proponents
say it is in fact both, as any company that does will
measure its performance under three headings, financial,
environmental and social, with none detracting from any
of the others. It is also supposed to extend beyond simple
compliance with local or national labour and
environmental laws. Approached properly, it should lead
to new opportunities and innovations as well as add an
extra competitive edge to the company’s activities.
It also ensures the company is careful to minimise
possible negative effects due to its activities. For instance,
although it might open a factory in a deprived area and
take steps to improve schooling and healthcare locally, it
could nevertheless still be guilty of inadequate labour and
environmental practices. Strategic CSR is intended to
resolve situations like this to the benefit of all parties.
Organisations such as the UN Global Compact and the
International Business Leadership Forum actively seek to
make CSR part of the global development agenda. This has
also been largely accepted by business in general as borne
out by a McKinsey Quarterly Survey of Global Business
Executives published in 2006. This showed that 84%
believed that, while large corporations should aim to
maximise returns to investors, they should balance it with
contributions to the public good.
The past few years have seen consumer markets expand
dramatically in developing countries as per capita incomes
have grown. As a result, established brands increasingly
view them as an answer to stagnant markets elsewhere.
CSR can assist them to develop responsible suppliers,
efficient manufacturing networks and more informed
consumers.
It can also help to alleviate social exclusion through market-
based incentives and, at the same time, a larger customer base
to provide increased opportunities for sales and profits. A
larger potential pool of labour in turn makes it easier to recruit
the good quality employees that will be needed. In this sense
CSR could be regarded as a win-win strategy.
TRADITIONAL AND STRATEGIC
CSR can have a positive impact on health and
development in three ways: employment benefits,
community development and core business strategy. The
first two can be regarded as being traditional CSR and are
different in the way they work and the effect they have
from the third, strategic CSR.
Traditional CSR activities covering health, education and
community services are usually seen as being separate
from the core business. A company may provide healthcare
as a benefit to employees and their families but, although
that enhances conditions for everyone, it does not affect
commercial activities.
Strategic CSR does form an integral part of core business
activities and is designed to promote sustainable incomes
in deprived areas together with the skills and experience
needed to earn them as well as provide better living
standards and improved health in the community. Strategic
CSR can be said to influence both direct benefits and the
integration of CSR practices into core business operations.
GLOBAL COMPACT
The UN has long taken a lead in promoting CSR
programmes in developing countries. In 2000, it
announced its Global Compact whereby companies were
invited to make a commitment to work alongside
development agencies in order to advance social and
environmental principles across the world. They must also
agree to include 10 principles as part of their overall
strategy. These are taken from various UN declarations and
conventions covering human rights, workers’ rights, anti-
corruption and the environment. While participation is
purely voluntary, companies are nevertheless encouraged
to record and publicly report progress based on the
following headings.
HUMAN RIGHTS
1.
Support and respect the protection of internationally-
proclaimed human rights.
2.
Ensure they are not complicit in any abuses of human
rights.
LABOUR STANDARDS
3.
Uphold freedom of association and recognise a right to
collective bargaining.
4.
Eliminate all forms of forced and compulsory labour.
5.
Push for the abolition of child labour.
6.
Eliminate discrimination in respect of employment and
occupation.
ANTI-CORRUPTION
7.
Work against all forms of corruption, including extortion
and bribery.
ENVIRONMENT
8.
Support a precautionary approach to environmental
challenges.
9.
Undertake initiatives to promote greater environmental
responsibility.
10. Encourage development of environmentally friendly
technologies.
While there are still many in the world who continue to
place profit above social responsibility, the adoption of
CSR as a business strategy and management tool
continues to spread. Many leading manufacturing and
retail brands see that there are gains to be made both
materially and in terms of corporate image. The days
when the leaders of major businesses could afford to
ignore public opinion have gone and today’s CEO is only
too aware of how damaging adverse publicity can be, let
alone the views of increasingly socially aware
shareholders.
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CSR AT A GLANCE
NOVEMBER/DECEMBER 2012 | www.footwearbiz.com