NOTE: This page is essentially meant for visitors who are new to the concept of corporate social responsibility (CSR) and wish to acquire more information and knowledge. However experienced CSR professionals are also welcome to go through it and give us their invaluable feedback to make the contents of this page better.
Everybody is talking about CSR these days and there is any number of definitions of what CSR is. The most widely held misperception, especially in developing countries, equates corporate philanthropy with CSR. Writing a check to a worthy charity, commendable as it may be, is not CSR. It is philanthropy, whether the check is written by an individual or a company.
It is true that the genesis of CSR lies in corporate philanthropy, which in turn lies in a belief that companies, like individuals, have a larger obligation to society beyond self-interest. At the company’s level, this obligation or responsibility first of all requires the company to take all necessary measures to ensure that the goods and services it produces or provides are of the highest possible quality. Further, that these goods are produced with the least possible negative impact on the environment on the one hand, and on society as a whole on the other hand.
In 1953 Howard R. Bowen, a distinguished American economist, educator and administrator was perhaps the first person to talk of CSR in his book, Social Responsibilities of the Businessmen, defining CSR as the ?the obligations of businessmen to pursue those policies, to make those decisions, or to follow those lines of action which are desirable in terms of the objectives and values of our society.
Since then the concept of CSR has evolved steadily into what it is today. The International Finance Corporation defines CSR as the commitment of businesses to contribute to sustainable economic development by working with employees, their families, the local community and society at large to improve their lives in ways that are good for business and for development.
So CSR in short is a belief in doing business in a way that benefits both the company and its various stakeholders. This belief is based on the simple logic that by strengthening stakeholders and the larger society, the company assures its own future growth or sustainability. As such CSR demands that the company embeds this belief and its practice in all operations of the company as a core business function under a well-planned holistic strategy.
CSR thus refined leads us to the triple bottom-line (People, Planet, Prosperity) concept. The triple bottom-line is a wide set of economic, environmental and social parameters used primarily to drive and measure an organisation?s value creation as a corporate citizen. The concept forms the most common quantifiable gauge and driving mechanisms of CSR. The idea is that businesses can add value to society in three ways: economic, social and environmental.
The triple bottom-line ethos demands that a company’s responsibility and accountability be to both its shareholders and its stakeholders, effecting creating what we call shared value.
At Triple Bottom-Line ? TBL, we define CSR as ‘a planned business function by which a company seeks to benefit its stakeholders and the larger community, in a manner that in turn strengthens its own sustainability.’
CSR in business is an evolving field as research points the way to even better mechanisms to enhance the shared value creation, and enhance the positive social and environmental impact of a company’s business operations.