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According to the World Business Council for Sustainable Development (WBCSD): "Corporate social responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large."
This is just one of the many definitions of CSR, and many academics have expanded the discourse with their own definitions, linking it with concepts like corporate citizenship, responsible business, etc. Some have proposed shortening CSR into just ‘Corporate Responsibility' to better reflect the broad scope of its principles, while some have argued that it's unnecessary.
In general, CSR's main tenet is that corporations ought to go beyond what is legally required of them to act responsibly in consideration of the interests and welfare of the society and environment it operates in. The philosophy of CSR is deemed to support principles of sustainable development (SD), with the three main pillars of SD - economic, social and environmental - being translated into the ‘triple bottom line' approach of considering ‘People, Planet and Profits'..
Why CSR? There are two typical lines of argument. The first one goes that companies need to practice CSR because it is the ‘right' or moral thing to do, and profit-making should not be the raison d'etre for businesses.
On the other hand, the second line of argument accepts that businesses should indeed be driven by profits alone, and CSR, while requiring little sacrifices in the short run, is actually in line with its ultimate goal because it helps them to be more profitable in the long run. This view is more rooted in reality, and seems to work, too, especially when tied-in with branding strategy.
While empirical data for a direct link between CSR performance and a firm's profitability has so far been inconclusive, recent surveys do reveal consumers' growing partiality towards responsible businesses.
On the marketers' side, more than half reported that ‘cause branding' programmes have led to perceptible benefits in terms of positive media exposure and improved staff morale and retention rates, factors which indirectly contribute toward a company's financial performance.
Meanwhile, new methods of measuring the intangible benefits of socially-responsible business behaviour, such as the approach pioneered by HIP Investor, are likely to support conscientious decision-making by consumers who are into socially responsible investing.
While the public should acknowledge the limits of CSR, they must also realize that businesses sold on the idea of CSR are, in fact, willing to spend large sums of money, supposedly for a better society and environment. But how wisely that money will be ultimately spent, depends on how ready and able are governments and NGOs in educating and engaging with businesses on their own terms. Businesses should not be left alone to define CSR, while others should re-assess their perception of business funds as ‘tainted money'.