Defining the importance of CSR

Ethical Policy

Corporate Social Responsibility is a very fluid term that conjures up so many different images, and it seems hard to confine it within the constraints of a simple definition. Yet, like any theory or discourse, there need to be structures through which we can interpret the catalogue of thought on the subject. The World Business Council for Sustainable Development
(WBCSD) defines it as:

…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…

Yet this is perhaps too bland an idea. Which local community? Which society? Every society has different versions of cultural norms, and will have diverse ideas on the form of corporate ethical contributions. United States corporations for example, seem to view CSR as philanthropic giving – a certain percentage of profits are put towards charitable donations, hence, giving back to the community. Ghana, as a growing African economy has a different view. With manufacturing accounting for 25.3% of national GDP and mining accounting for around 37% of exports (as at 2010 figures), there is an emphasis on up-skilling the labour force. For national corporates and multinationals operating within Ghana’s borders, CSR takes a more tangible role in developing the local communities and workers that contribute to their operations. The WBC’s publication Making Good Business Sense neatly describes that CSR leaders in Ghana [find] the business opportunities in building the skills of employees, the community and the government.

Perhaps the best model to adopt (and the idea that fits best with the role of HR) is the idea proffered by the Commission of the European Communities in its 2002 CSR Communications whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis.

This seems to have been the trend across European corporate strategy for the last 10 years, resulting in a strong culture of creating sustainable benefits for the company through CSR initiatives. You only have to look at the growth of the European CSR Awards Scheme which acknowledges CSR leaders from 30 European Countries and 31 national networks; from the 749 applications for recognition, 63 received awards, representing Europe’s best in class CSR initiatives. It is clear that CSR is becoming more and more intrinsically linked to the people and culture of these European organisations.

Australian business appears to be at a crossroads, somewhere between the US system and the European system. It’s very easy to give money and not have to really look at internal systems and processes, but as the CSR space grows across our economy, communities are starting to ask for greater social returns from corporates, and they will need to answer with a higher level of sophistication and understanding of CSR in order to remain sustainable. You need only pick up a newspaper to see how important this issue has become to the Australian mining industry.

We have an opportunity to guide our organisations towards a greater understanding of CSR practices and to show that it shouldn’t just be out of operational necessity – that it can add real measurable value to an organisation in the long term.  As HR professionals, we are uniquely placed to assist our corporate leaders to integrate this understanding into our communications, systems and processes. It’s about people & culture, and that is what we do best!