globalEDGE Blog - By Tag: social-responsibility

In business, sustainability is defined as the practice of operating a business without impacting the environment negatively. Sustainable businesses operate with the interests of local and global environments in mind and consider the impact on society and the environment. The focuses of these businesses are profits, people, and the planet. Keeping these three themes in mind, businesses are able to adopt and modify business models and plans in order to fully create a meaningful sustainability program and strategy.

The coronavirus outbreak has spread into countries all across the globe. Despite international efforts to engage in social distancing, the number of people with the virus has continued to rise. The coronavirus, which is most dangerous to the elderly, has now has infected over one and a half million people globally. It has been the cause of a massive shutdown of businesses, as well as a massive drop in the stock market.

This is the third post in a three-part series featuring our blog competition winners from Michigan State University. The author of today's post is Pujitha Kasipuram.

What is CSR

Corporate social responsibility is not a new term, as it originated back in the 1930’s where a firm tends to focus on mainly profits and private interests. According to Norine Kenney who is a part the U.S Council on International Business, “there is no solid definition of CSR; however, it is not a replacement for the governmental role and responsibility in meeting challenges of sustainable development.” This states that there is not one definition of CSR nor it substitutes the responsibility of a government. In fact, corporate social responsibility can be evaluated in many directions such as providing good working conditions to employees or how it can relate to globalization in three ways: environmental, economic, and social. With globalization and CSR, it is believed that there should be equal access to all three resources, but is this necessarily true? Since the government is not fully responsible to enforce for such issues, how can corporations be held accountable that are engaging in ethical practices? Corporate Social Responsibility varies by region, by country, and by group. It is a broad topic to discuss, but increasingly becoming important for consumers.

It is not a coincidence that there is a positive trend between companies that do good in their community and company success. With this generation of consumers and employees placing more importance on community consciousness than ever before, it makes sense that the companies that are giving back are the ones attracting the most business.

As a result of corporate scandals such as oil spills, carbon emissions, and injured workers, technology—more specifically social media—is putting pressure on companies to clean up their act.

Found under the social responsibility section of globalEDGE’s Global Resource Directory, the Corporate Giving by the FTSE 100 report offers in-depth information on charitable contributions made by the United Kingdom’s largest companies. The report is provided by the Charities Aid Foundation (CAF) and contains data related to corporate philanthropy, as well as emphasizes the importance of transparent social responsibility. This resource also aims to bridge the gap between what United Kingdom businesses are actually doing in terms of corporate giving and the public’s perception of these corporations’ charitable actions.

With multi-nationals operating across the world, it is relatively easy for these companies to shift activities to countries where the tax rates are significantly lower or nonexistent. In recent years, this has caused significant political and public reactions. Citizens and politicians are looking to ensure that companies pay their fair share of tax. Leaders of the world's largest economies are scheduled to meet to determine whether the ratification of new global tax rules can solve widespread tax evasion problems. However, improving the tax system may prove to be a rather difficult task with large implications for the global business community.

For some, eating insects may seem unappetizing and unappealing, but it is estimated that 2.5 billion people worldwide eat insects on a regular basis.  Students from McGill University in Montreal, Canada believe they have come up with a solution to cut down on global poverty and hunger.  It involves distributing cricket-producing kits to impoverished populations around the world that will give these people a source of protein and potentially a source of income as well.  Simply, families could eat what they want and then sell the rest.

Imagine a company that cares profoundly about the well-being of its customers, treats its suppliers as part of the family, with the same care and love as it shows to its own employees and customers. Imagine a business where those who are lucky enough to be employed, rarely, if ever, leave and every employee is committed and passionate about their work.

If you’re saying to yourself, “not possible, unreal,” you're part of the majority. But, the management paradigm shift is catching on and it could turn the classic management style upside down.

Water is a precious thing. But why? After all 75% of Earth is water. However, of this percent, only 3% is drinkable. And of this, 70% is found in the polar caps as ice. This means that of all the water on Earth, less than 1% of it is available for us to drink. That’s why we are constantly being reminded to save water. Global warming, increase in population and industrialization have all taken a toll on Earth’s water supply. But saving water is not the only thing we must do to protect it. We need to make sure that we don’t pollute it, nor let others pollute it. Aamir Khan, in his show Satyamev Jayate (with English subtitles), shares insight to the devastating water problem in India.

As the United Nations’ Rio +20 Summit came to a close this past week there was a large disappointment in the solutions, or lack of solutions, accomplished. In 1992, when the Summit was first held, there was a sense of hope that a plan could be created to both develop and stabilize the economy while also protect the environment. This year the final document, titled “The Future We Want,” has been seen as weak because it failed to come closer to conclusions on how the world can deal with the connected problems of economy and environment. Rather than focusing on what was unsuccessful, the Summit did create more of an awareness of the issues and put out good ideas on the table. In order to really achieve the future we want, action taken by businesses is necessary.

With booming agricultural and mining industries, Latin America has seen economic and human development increase exponentially in the past decade.  While human capital and resources attracted foreign investors for a past few years, lately it has been the plentiful sunshine that catches the eyes of many venture capitalists.

Chile in particular has caught the “green” bug.  While imported fossil fuel accounts for more than 60% of the county’s electricity production, hydroelectric and solar power plants are in high demand by the Chilean government.  With the cost of solar power technology falling, Chile’s quest for affordable renewable energy is not too difficult to obtain.  A trade deal with the world’s leading solar power technology manufacturer, China, is in the works.

In an attempt to decrease its carbon footprint, China is asking its energy-intensive industries to reduce their energy consumption by a greater percentage than previously mandated.  These efforts by China are also a result of growing domestic and international pressure to decrease its reliance on fossil fuels.  Last year, China’s industries fell short of the government’s goals for lowering energy intensity and pollutant emissions, but the government is optimistic about firms meeting this year’s targets due to new and improved policies and controls.

With growing food and energy prices worldwide, it may be surprising to hear that some consumers are willing to pay more for certain food products. This is the case in the United Kingdom where sales of fairly traded products have beaten the trend of decline in the retail market and have grown by 12 percent this past year. Fairtrade products have higher prices than normal food products but in return consumers feel socially responsible as Fairtrade goods are marked with higher environmental standards. Perhaps more importantly, these fairly traded food products ensure that producers in developing countries are paid properly for their hard work while also promoting better trading conditions between global businesses.

Mining for gold has traditionally been viewed as a toxic business that harms the environment leaving mercury and other harsh chemicals in the atmosphere. However, this view is beginning to change as gold mining practices turn to fair trade. The new fair trade standards set social, environmental, and economic measures to eliminate child labor and minimize the use of toxic chemicals such as mercury and cyanide. The major goal of this movement is to avoid the negative impacts that mining causes in the environment while also aiming to help the millions of people who depend on the gold mining industry for employment.

Are companies that have implemented carbon reducing practices performing better financially?  The recent release of the CDP Global 500 report by the Carbon Disclosure Project answers in the affirmative.  In fact, this report has revealed that the companies working to decrease their carbon emissions are outperforming those that have not begun this change.  These same companies are said to be performing better in the stock market as well.

Currently, the global water supply is in a problematic state as Earth’s fresh water supply is being used up without having the chance to be recharged. As the population grows rapidly, more and more water is needed to produce the food that feeds this growing population. Agricultural crops and animals are not the only products requiring water. Industrial productions of almost all goods require water as a resource. In fact, water is a key material for almost any business application in the world today. On top of this, water is also being polluted and wasted which contributes greatly to the decline of the fresh water supply. Despite this bad news, businesses are helping turn this situation around by establishing an effort to save the water supply.

The rainforest of Borneo in the growing country of Malaysia is said to be the oldest rainforest on the planet, 70 million years older than the Amazon. Hundreds of species of plants and animals inhabit the forest of Borneo with many new species still being discovered each year. Borneo, with its dense forest and uncountable number of unique species, is one of the world’s greatest natural treasures. Malaysia, determined to develop its growing economy, has difficult choices to make about how to ensure the safety of its natural resources.

In part one we talked about the huge environmental costs for companies and the economic impacts these may have. Now we want to see what can be done, if reporting these costs should become standard, and the benefits this may have. Already many companies have made huge investments in reforestation, reducing water consumption, and an overall protection of natural resources. With the rising costs of valuable resources which are in danger, it only makes sense that these become a regular part of a company’s investment. With a strong sustainability agenda, corporations can help business be perceived as the place to best change what is going on in the world. As more companies realize how much sustainability helps their financial accounts, they’ll want to know how best to report these costs, and what can be done about them. The best step is to no longer ignore what’s going on, no matter what way you look at it.

In order to see if a company is viable as a going concern, environmental costs are vital to know for the long-run. The benefits to preserving the environment in terms of dollars may be surprising, but it’s not to many business leaders these days. A private sector solution may be the best solution on a global scale. Just last week, Puma became the world’s first major corporation to report the details of the cost of the company’s impact on the environment. They said the costs of the carbon emission and the water it used in 2010 totaled $134.3 million. The costs not only included the company, but all of its suppliers as well. The next step for the company is to measure their cost of waste and land-use change. Ecosystems are vital to the performance of most companies, and integrating the true costs of extracting these services could significantly impact bottom lines in the future.

In 2007, former president Oscar Arias announced Costa Rica’s goal to become the first developing country to go carbon-neutral in 14 years. At the time, that goal seemed to be very unlikely for such a small country with financial difficulties. However, over the past years Costa Rica has made significant strides in accomplishing their energy goal and has become one of the leading countries in environmental sustainability.

Recently gold prices have been up, but another metal connects countries around the world and provides insight into future economic and global trends. This metal happens to be copper and unlike gold, copper is not often viewed as a glamorous commodity. However, its practical use in water pipes, electrical wiring, computer circuit boards, and other electronic gadgets makes copper a valuable resource. Today the world’s copper mines are booming as copper prices continue to rise dramatically.

Is it possible that corporate social responsibility, one of the most popular trends in modern business, is an irresponsible goal for any profit-driven organization to pursue? Is the pursuit of the triple-bottom-line (people, planet, profit) contrary to the value that corporations provide for society? Ann Bernstein, the leader of the Centre for Development and Enterprise in South Africa argued in her new book that it is more valuable for companies to focus solely on profit while leaving people and planet to fend for themselves, especially in developing nations.

Dubai, one of the seven emirates of the United Arab Emirates, faces major environmental problems after years of rapid urbanization and business growth. Located in the desert south of the Persian Gulf, Dubai’s biggest challenge is providing fresh water to its residents. However, the city has many other problems including waste management and sewage treatment operations. Despite being situated on vast oil reserves, the region is also running low on energy sources to support its lifestyle. On top of these complications, the United Arab Emirates (UAE) is preparing for a population boom this upcoming decade. Therefore, concepts of sustainability and environmental issues are becoming very important to businesses and citizens of Dubai.

An article by the Huffington Post investigates the world’s most polluted cities. The top ten list includes Linfen, China; Los Angeles, United States; Niger Delta, Nigeria; London, United Kingdom; Dzerzhinsk, Russia; Phoenix, United States; Bandung Indonesia; La Oroya, Peru; and Lake Karachay, Russia.

According to the article, “Living in Linfen, China, is equivalent to smoking three packs of cigarettes a day”

“In 2003, Dzerzhinsk, Russia’s death rate surpassed its birth rate by 260 percent.”

“Phoenix, Arizona, United States is 2010's worst place in the United States for year round particle pollution... a mix of dust, soot and aerosols.”

Companies around the world are working to come up with products with innovative designs and ideas that are also extremely valuable to society:

The global impact of our individual actions in society today is more than most of us know. The reach a single person can have has grown exponentially with the advent of the Internet and accompanying decrease in technology costs. The question becomes, how have people used this historical improvement in our ability to communicate across the world? One professor from the University of Oxford began inventing solutions for the less privileged people of the world. His idea began with the concept of user-adjustable spectacles. Check out a demo of his invention:

On December 3, 1984, the lives of 15,000 people in Bhopal, India, ended unexpectedly with a catastrophic chemical plant accident.  On March 24, 1989, an oil barge, the Exxon Valdez, ran aground and created one of the worlds largest ecological disasters.  Events like these are cemented into history because they have marked important turning points for enhanced levels of corporate social responsibility and their impact on the environment.  On this topic we’ll approach the subject from two different vantage points: