Ch. 21
Corporate Social Responsibility
Overview
BASK Definition: The organization's commitment to operate ethically and contribute to economic development while improving the quality of life of the workforce and their families, and of the local and global community.
BASK Key Concepts:
- HR activities that support sustainability (human rights, safety practices, labor standards, performance development, inclusion and diversity, compensation, supply chain management)
- Organizational philosophies and policies (development, integration, shared value)
- Steps to implement a CSR strategy
- Community inclusion and engagement
Core Concepts
| Concept | Meaning |
|---|---|
| Sustainability (BASK) | Using resources wisely by balancing economic, social and environmental concerns, to protect the interests of present and future generations |
| Triple bottom line (John Elkington) | Measure success on three dimensions: People (social), Planet (environmental) and Profit (economic) |
| ESG | Environmental, Social and Governance criteria that investors and stakeholders use to evaluate a company's sustainability and ethics. HR drives the "S" (labor practices, safety, diversity, pay equity, human rights) and contributes to the "G" (ethics, executive pay, board diversity). |
| Stakeholder theory | Companies owe duties to all stakeholders (employees, customers, communities, suppliers, regulators and shareholders), not just shareholders |
| Shared value (Porter & Kramer, 2011) | Create economic value in a way that also creates value for society by addressing social needs. CSR becomes part of business strategy rather than separate charity. |
| Corporate philanthropy | Charitable donations of money, products or employee time |
| Greenwashing | Misleading claims about environmental or social responsibility |
Organizational CSR Philosophies (BASK)
These are commonly described in three levels:
- Development: basic philanthropy and charity, separate from the business.
- Integration: CSR is built into business operations and decisions.
- Shared value: CSR is a source of competitive advantage and innovation.
HR's Role in CSR and Sustainability
- Human rights and labor standards: no child or forced labor in the supply chain (audit suppliers), fair wages, and safe conditions (the ILO principles).
- Safety practices and well-being.
- Inclusion and diversity, and pay equity.
- Performance development and training.
- Ethical supply chain management: supplier codes of conduct and audits.
- Employee engagement in CSR: volunteer programs, matching gifts and green teams. CSR also strengthens the employer brand; younger workers especially value purpose.
- Remote work and green policies that reduce environmental impact.
Steps to Implement a CSR Strategy (BASK)
- Develop a business case: connect CSR to the mission, values and business benefits, such as reputation, engagement, recruiting, customer loyalty and risk reduction.
- Obtain executive approval and sponsorship.
- Select recipients, causes or focus areas that fit the organization.
- Identify and analyze performance indicators, such as volunteer hours, emissions and community impact.
- Recruit and organize participants: employees, partners and community groups.
- Then implement, measure, report and improve.
Community Inclusion and Engagement (BASK)
Examples include representation on community boards, joint community projects, employee volunteerism (volunteer time off, skills-based volunteering, pro bono work), local hiring and workforce development partnerships, and supplier diversity.
Reporting Frameworks and Global Initiatives
- UN Global Compact: a voluntary initiative with ten principles covering human rights, labor, environment and anti-corruption.
- UN Sustainable Development Goals (SDGs): 17 global goals for 2030.
- Global Reporting Initiative (GRI): a widely used framework for sustainability reporting.
- B Corporation (B Corp) certification: certifies that companies meet standards for social and environmental performance, accountability and transparency.
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