Corporate Social Responsibility

English (en) svenska (sv)

Corporate Social Responsibility, shortened CSR, address how companies and organizations are working on environmental and social responsibility in their business. There is no official definition of what CSR is or should mean for a company, CSR can mean different things to different companies. There are also other similar concepts such as Corporate Responsibility, Corporate Citizenship, Corporate Governance that are in various ways linked to CSR. In Swedish CSR has been translated into “företagens samhällsansvar eller hållbar affärsutveckling”, but typically, the English term CSR is used, even among Swedish authorities and companies since CSR at first were related to multinational companies.

EU definition of Corporate Social Responsibility: "A concept whereby companies to integrate social and environmental considerations into their activities and in their interaction with stakeholders beyond what the law requires."

Often CSR is split into various parts such as environmental, economic, social and ethical issues. Environmental considerations addresses how the company can reduce its environmental impact by taking the environment into consideration when doing business, use green transportation, reduce energy and resource consumption in their production and so on.

Economic aspect might include that the company has proper accounting area, how the company will prevent financial crime, corruption, bribery and so on. It can also be about what policies the company has in terms of pay and compensation to board members. Something else that is also becoming more common is responsible investments, Social Responsible Investments. SRI, includes making sure to place the company's investments in companies that work extensively with CSR. Following demands from both investors and consumers an increasing numbers of companies have made reports about their CSR work in a so called sustainability report or a CSR report. Since 2008, it is also required that all public organizations annually make an open sustainability report.

The social and ethical responsibility is about community involvement, working conditions and human rights. For example, the company allows its employees to be volunteers in a social project during working hours, or that they sponsor and work with various voluntary organizations. But mostly the social aspect is dealt with, especially in the textile industry, the company should promote human rights and fair working conditions for its suppliers, often located in developing countries. This in turn has led many importing companies to develop so-called Code of Conduct with requirements for working conditions.

What does Corporate Social Responsibility mean?

According to the organization World Business Council for Sustainable Development -WBCSD, a company's CSR activities must, among other things include the following:

• The management clearly declares its position and its commitment worldwide.
• To develop and implement clear policies for the entire organization.
• To introduce rules for purchases that include environmental and social concerns.
• That the company will reduce its "ecological footprint" in both their production and supply chain.
• Setting up goals in both environmental aspects of work conducted and in social fields.
• The assets a company holds should be restrained in accordance with the social and environmental principles that apply to other fields,
• That one shows an active commitment to the surrounding society’s development,
• That consumers are trained in how products are best used and managed,
• That one has an report that shows all operations in all the areas cited above and that they are clear in its purpose and provide an honest and clear picture of its activities and their impacts and to let the report be audited.

CSR in practice

CSR can be seen as the responsibility that a company takes on in addition to the formal responsibility of the community required by it. It is voluntary and is not required by law. (Det ansvarsfulla företaget-Ola Lohmann, Daniel Steinholz p.107)

Three basic fundamentals In order to work with CSR, the company needs to define itself in relation to the world. This can be done by starting with three basic foundations. (Det ansvarsfulla företaget p.118-143)

• Existence eligibility - Describes how the company intends to operate. For what purpose it exists. Existence eligibility is grown from that the company's business, operations and skills are carefully analyzed.
• Foundation values – Shows what the company’s mission in a broader perspective. The values the company stands for is the foundation and shows the initiative and identity of the company. These often have their origin way back in the company’s history.
• Stakeholder interests - a company's target group, ie which groups or interests the company is to work for. "A stakeholder is an individual, group or other occurrence that may affect - or be affected by - the company's operations" (Lohmann-Steinholtz p.129)

Ten supporting principles needed to make CSR clear to the world. (Det ansvarsfulla företaget -Lohmann, Steinholtz p.149-159)

• Courage to take a stand on important industry issues.
• Getting the stakeholders involved as ambassadors for the company.
• Consistent communication
• Only carry out what is relevant for the company. (What the company is good at)
• Importance of doing something and what one does is of equal importance.
• Learning - building a sustainable organization by learning from ones mistakes.
• Privacy - Protect your company's soul.
• Transparency - Show your weaknesses.
• Sustainability - The company must be financially sustainable to have any benefit and to be able to work with CSR issues.
• Measurability - Measurement is a way to control and evaluate work.

International documents and initiatives

Today there are two main international documents on social responsibility in business, the OECD Guidelines for Multinational Enterprises and the ILO conventions on fundamental rights at work. There are also other initiatives to raise awareness of CSR, such as the UN Global Compact and World Business Council for Sustainable Development (WBCSD), a coalition of 175 international companies. Examples of Swedish textile companies that are members of the Global Compact: H & M, IKEA, Lindex etc. There is also a Swedish equivalent to the Global Compact, Global Responsibility of the State Department where Swedish companies may become members. Another forum for social responsibility of business is also Amnesty Business Group which includes H&M and IKEA. A new ISO standard on social responsibility, ISO 26 000 has been launched in 2010.

Driving forces behind CSR

• Consumers - customers and the public are major driving forces in a company's CSR work. Förebildsföretagets (Role model company) customer survey in 2002 found that 45% of the Swedish public thought a company's role in society is to build a better society Det ansvarsfulla företaget-Ola Lohmann, Daniel Steinholtz p.45) Customer requirements is steadily increasing on companies to create new value beyond profit and tax. By their way of consuming the customers are able to make a stand in the society. (Lohmann-Steinholtz p.45-58)

• Employees-The competence of a company are its employees. How well a company is able to inspire and engage their employees are crucial to how well the company's strategies work out. People generally have a need for a purpose in their life. Taking part in improving conditions in the world through their work often weigh heavily in countries such as Sweden where we live with such a high standard that we can try to find higher meaning in life. (Lohmann-Steinholtz p.59-69)

• Investors-They who owns and invests in companies has emerged as one of the strongest driving forces of CSR work. Investing ethically and sustainably in the products, services, companies and funds are now seen frequently as a way to brand themselves. (Lohmann-Steinholtz s.70-106)

CSR and the textile industry

The interested can obtain more information on CSR and the textile industry in the essay "Who cares? – a study of Corporate Social Responsibility as a competitive weapon" by Marie-Louise Johansson, BSc in Textile Economics, School of Textiles, 2009-06-10.

Abstract, partly

The purpose of this study is to illustrate how companies in the fashion industry can apply CSR, to enhance their brandimage, and create competitive advantages. The study also aims to examine, in what way, the consumers’ interest in ethics and social issues affect their buying decisions. The study showed that most consumers like to think of themselves as “good people” and therefore find social responsibility and fair working conditions to be of great importance which makes it possible for comapanies to build a strong brandimage with CSR. Although, the liking towards social responsibility showed to be in no way a warranty for companies that consumers will choose their products over those of the competitors’. A strong brandimage, thus, isn’t enough to affect the consumers buying decision though other attributes is of greater importance for the customers. However, there is a small segment that find fair working conditions to be of great importance. The conclusion is that CSR, as a competitive weapon and differentiator, is suitable for a small segment of the market rather than the market as a whole.

Standards for CSR-related areas

• ISO 26000, Standard for social responsibility
• SIS OHSAS 18001:2007, Safety management performance
• ISO 14001 environmental management system
• ISO 9001 quality management system, (Note, new version in 2009)

Related links

• Global Reporting Initiative