Introduction
Entrepreneurs and business managers use business ethics as a compass to possess a guide when they make decisions on controversial issues. Business ethics is a broad spectrum of philosophical and moral concepts applicable to business, including the problems of corporate governance, bribery, employment policies, and responsibilities before society. This paper will review the basis of corporate social responsibility (CSR), present two examples of CSR, and discuss CSR from the perspective of Christian values.
Definition and Background of CSR
CSR is based on accountability and the desire of the business managers to act ethically and in a manner that contributes to societyâs development. According to LatapĂ Agudelo, JĂłhannsdĂłttir, and DavĂdsdĂłttir (2019), CSR is the responsibility of a business before the stakeholders or all people who are impacted by this businessâ operations. CSR emerged from the notion that companies and society are linked. Companies employ people and produce products for customers. Their operations impact the communities where they are located.
The CSR practices are now recognized in legal documents from international organizations and by some governments as an integral component of a business’s operations. Bijlmakers (2019) argues that according to CSRâs legal definition and the definition approved by the United Nations, it is the obligation of the companies to respect human rights. Moreover, the UN created guiding principles for companies that want to implement CSR. This approach includes a wide variety of issues, including employment practices, sourcing of materials, management of plant operations, and others. Therefore, CSR has become not only an ethical practice but also a legal responsibility of a company.
CSR is about the companyâs ethics and its commitment to contributing to the well-being of society. However, most organizations use practices that are harmful. For example, â400,000 and a million people die every year in low- and middle-income countries because of diseases related to plastic and other mismanaged wasteâ (Laville, 2020). This waste is a result of companiesâ production of food, beverages, and other packaging materials that are thrown out after they were used.
Although it may seem obvious that engaging in practices that are harmful to people is morally wrong and should not be done by managers and business owners, often the consequences of business activity are not apparent at once. Plastic bottles, for example, appeared as a good substitute for glass bottles, which were more expensive and breakable. This novelty allowed beverage companies to mass-produce drinks for the general population, and only after decades did the use of plastic and its harmfulness become apparent. This is why CSR is a necessary component of strategic business management since CSR encourages companies to include ethical goals, for example, using compostable plastics, in their development plans.
CSR has a lengthy history, although formally scholars and policymakers began to mention it only in the twentieth century. Chaffee (2017) argues that CSR practices are not new, and one can find examples of laws in Ancient Rome that are similar to what is perceived as CSR now. These laws outlined the functioning of asylums and shelters for the old and poor as the basic principles of societyâs functioning. Moreover, the English Crown during the Middle Ages perceived businesses as an inseparable part of the social development processes (Chaffee, 2017). In the professional business literature, the environmental consciousness and responsibilities of businesses before society began to be mentioned in the 1930s and 1940s (LatapĂ Agudelo, JĂłhannsdĂłttir, & DavĂdsdĂłttir, 2019). Hence, CSR has been a part of legal and business frameworks for centuries.
Practical Example I
The concept of CSR is based on the idea that businesses impact society and should use practices that do not harm the people or even contribute to their development. The first example is the case study of Microsoftâs adoption of the CSR strategy. According to Sehgal et al. (2020), Microsoft was ranked â1 on the annual Best Corporate Citizens Magazineâs list in 2018. Microsoftâs strategy for development includes CSR goals in three key domains: âeconomic, social, and environmentalâ (Sehgal et al., 2019, p. 64). The company has the position of Environmental Manager and claims to achieve maximum energy efficiency (Sehgal et al., 2020). Therefore, Microsoft is a corporation that recognizes the value and importance of CSR, and its management integrated CSR policies into the planning and operations.
Microsoftâs operations do not directly affect the environment, and this company does not use plastic or have plants that pollute the air. However, because this is an IT company, Microsoft uses energy, which is most often derived from non-renewable sources. Some examples of how this corporation addresses energy efficiencies are the Earth Day celebration and a commitment to use renewable energy (Sehgal et al., 2020).
According to Microsoftâs research, information technology products and services contribute to 3% of the global carbon emissions (as cited in Sehgal et al., 2020). Other examples of sustainable practices at Microsoft are the use of telecommunications software instead of face-to-face meetings. This allows for reducing the carbon footprint because their employees travel less (Sehgal et al., 2020). Thus, Microsoft shows a strong commitment to CSR, and its strategic plans include considerations for the companyâs impact on society and the environment.
Practical Example II
Another example of CSRâs importance is the example of a multinational corporation that operates plants in many developing counties, sells its food and beverages globally, and contributes to the increase of pollution and plastic waste. Nestle has been long accused of wasting and polluting water because its production facilities use unsustainable practices. Moreover, the investigation by Laville (2020) shows that Nestle also âleaves a pollution footprint of 95,000 tonnes per year or covering 15 football pitches a dayâ (para. 26).
This includes the plastic leftovers from the products this conglomerate produces. Without a CSR strategy and the basic principles of CSR, such as Carollâs Pyramid of CSR, where the profits are the basis of the pyramid, following the legal, ethical, and philanthropic responsibilities (as cited in LatapĂ Agudelo, JĂłhannsdĂłttir, & DavĂdsdĂłttir, 2019). This pyramid emphasizes the core idea of CSR and the practice that Nestle adopted in their plans for 2025ârevenue goals have to be balanced with consciousness about the businessesâ impact.
From the perspective of CSR, the stakeholdersâ interests are the clean environment and unpolluted land, which Nestle fails to contribute to at this moment. From a business perspective, Nestle sells millions of products daily, most of which are packaged in plastic. Changing this practice and using environmentally friendly packaging would cost billions for this manufacturer and, from a business perspective, is not a top priority. However, if Nestle wants to practice CSR, the management will have to plan out a gradual transition towards using packaging that is less harmful than plastic.
While these pollutants do not affect the lives of the citizens in wealthy states directly, developing countries often become dumps of used plastic. Laville (2020) cites an example of the Tanzanian village Dar es Salaam, where there is a dump of plastic waste, including waste brought by Bestle, which is often on fire. Not only the plastic waste is dangerous and will take a while to disseminate to the surface, but these fires result in harmful pollutants being released into the air from the plastics. The villagers of Dar es Salaam directly experience harm from Nestleâs operations, and their basic rights of living in a safe environment are compromised.
Societyâs attention to the businesses they support and the impact that these companies have on the communities and the environment is the best tool for retaining sustainability.
Nestle, similarly to other mass production food companies including Pepsi and Cocacola have a CSR strategy on their website and claims to aim for sustainability in their production (Laville, 2020). Partially, this is due to the pressure from society and attention that was dedicated to the cases of water pollution and other non-environmental practices in recent years. Nestle, for example, claims that its objective is to have 100% of its packaging be reusable and recyclable by 2025 (Laville, 2020). Another way of combatting the issue of plastic waste that already exists, such as massive plastic dumps, is to incentivize companies to include funding for research projects that would allow them to disseminate this plastic, reuse it, or get rid of it in any other manner. In this way, these companies will account for the waste they have produced and sold to the consumers.
Challenges of CSR
While in theory, CSR should be the basis of operations for all businesses, in practicality, the desire to gain profits often results in business objectives being valued more than social ones. As mentioned in Nestleâs case study, the companyâs revenue relies on its ability to use plastic for packaging. A transition towards environmentally friendly practices will take at least four years (Laville, 2020). Unfortunately, this challenge can not be resolved, and companies should be given the time to change the way they operate. If developed countries were to ban plastic altogether, Neste and other conglomerates would continue using it for products in developing states. Moreover, they could use an alternative that is new, and its impact has not been studied yet (LatapĂ Agudelo, JĂłhannsdĂłttir, & DavĂdsdĂłttir, 2019). Hence, providing enough time and incentives for businesses to engage in CSR is the best solution.
Another challenge is the difficulty of assessing the sustainability of some practices. Sehgal et al. (2020) argue that Microsoft has faced this issue since their management was unsure what targets for sustainability to include in their plan because they have no references. Thus, the executives may have difficulty assessing how sustainable their work is until there are concrete measures or companies that have achieved exemplar sustainability.
Christian Worldviews
The concepts of CSR are very similar to the Christian worldview, apart from CSRâs recognition of profits as a basic responsibility of a business before its shareholders. According to LatapĂ Agudelo, JĂłhannsdĂłttir, and DavĂdsdĂłttir (2019), the Christian philosophy contributed to the implementation of social responsibility practices during the eighteenth and nineteenth centuries. This prompted the British Empire and other European states to implement social reforms that would target poverty and help people in need (LatapĂ Agudelo, JĂłhannsdĂłttir, & DavĂdsdĂłttir, 2019). Humanism has become an ideal model of society during the Victorian times, which emphasizes the value of the people over other things, and it was inspired by Christian values.
Christians have practices respect for others and for society in general as part of their religion. Another illustration of this is the Young Menâs Christian Association (YMCA), which was first established in London in the 19th century (LatapĂ Agudelo, JĂłhannsdĂłttir, & DavĂdsdĂłttir, 2019). This movement aimed to apply the business objectives of the founder to the Christian worldviews and align the two by helping young people develop.
While YMCA did not directly encourage people to establish businesses, it was created to help young men avoid alcohol and bad habits and instead engage in productive activities. At YMCA, they were encouraged to embroid and engage in other activities, and the goal was to ensure they they are not wandering on the streets or consuming alcohol (LatapĂ Agudelo, JĂłhannsdĂłttir, & DavĂdsdĂłttir, 2019). The creator of the YMCA was a business owner and a Christian, and he applied his religious values to create this organization. Thus, there are many examples of how Christianity inspired policymakers and business owners to address social issues.
Conclusion
Overall, this paper focuses on the topic of CSR and the basic principles of CSR. CSR can be viewed as the businessesâ responsibility before the stakeholders or the respect for human rights and freedoms. Microsoft is a prominent example of how companies can use CSR to improve their operations. Nestle, on the other hand, continues to contribute to global plastic waste and pollution, although the corporation plans on enforcing its CSR by 2025.
References
Bijlmakers, S. (2019). Corporate social responsibility, human rights and the law. Routledge.
Chaffee, E. C. (2017). The origins of corporate social responsibility. University of Cincinnati Law Review, 85, 347â373.
LatapĂ Agudelo, M., JĂłhannsdĂłttir, L., & DavĂdsdĂłttir, B. (2019). A literature review of the history and evolution of corporate social responsibility. International Journal of Corporate Social Responsibility, 4(1). Web.
Laville, S. (2020). Report reveals âmassive plastic pollution footprintâ of drinks firms. The Guardian. Web.
Sehgal, G., Kee, D., Low, A., Chin, Y., Woo, E., Lee, P., & Almutairi, F. (2020). Corporate social responsibility: A case study of microsoft corporation. Asia Pacific Journal of Management and Education, 3(1), 63-71. Web.