My OperaCriticisms and concerns of CSR
Tuesday, September 22, 2009 2:28:08 AM
Critics of CSR as well as proponents debate a number of concerns related to it. These include CSR's relationship to the fundamental purpose and nature of business and questionable motives for engaging in CSR, including concerns about insincerity and hypocrisy.
[edit] CSR and the nature of business
Milton Friedman and others have argued that a corporation's purpose is to maximize returns to its shareholders, and that since (in their view), only people can have social responsibilities, corporations are only responsible to their shareholders and not to society as a whole. Although they accept that corporations should obey the laws of the countries within which they work, they assert that corporations have no other obligation to society. Some people perceive CSR as incongruent with the very nature and purpose of business, and indeed a hindrance to free trade. Those who assert that CSR is incongruent with capitalism and are in favor of neoliberalism argue that improvements in health, longevity and/or infant mortality have been created by economic growth attributed to free enterprise.[12]
Critics of this argument perceive neoliberalism as opposed to the well-being of society and a hindrance to human freedom. They claim that the type of capitalism practiced in many developing countries is a form of economic and cultural imperialism, noting that these countries usually have fewer labor protections, and thus their citizens are at a higher risk of exploitation by multinational corporations.[13]
A wide variety of individuals and organizations operate in between these poles. For example, the REALeadership Alliance asserts that the business of leadership (be it corporate or otherwise) is to change the world for the better.[14] Many religious and cultural traditions hold that the economy exists to serve human beings, so all economic entities have an obligation to society (e.g., cf. Economic Justice for All). Moreover, as discussed above, many CSR proponents point out that CSR can significantly improve long-term corporate profitability because it reduces risks and inefficiencies while offering a host of potential benefits such as enhanced brand reputation and employee engagement.
[edit] CSR and questionable motives
Some critics believe that CSR programs are undertaken by companies such as British American Tobacco (BAT),[15] the petroleum giant BP (well-known for its high-profile advertising campaigns on environmental aspects of its operations), and McDonald's (see below) to distract the public from ethical questions posed by their core operations. They argue that some corporations start CSR programs for the commercial benefit they enjoy through raising their reputation with the public or with government. They suggest that corporations which exist solely to maximize profits are unable to advance the interests of society as a whole.[16]
Another concern is when companies claim to promote CSR and be committed to Sustainable Development whilst simultaneously engaging in harmful business practices. For example, since the 1970s, the McDonald's Corporation's association with Ronald McDonald House has been viewed as CSR and relationship marketing. More recently, as CSR has become mainstream, the company has beefed up its CSR programs related to its labor, environmental and other practices[17] All the same, in McDonald's Restaurants v Morris & Steel, Lord Justices Pill, May and Keane ruled that it was fair comment to say that McDonald's employees worldwide 'do badly in terms of pay and conditions'[18] and true that 'if one eats enough McDonald's food, one's diet may well become high in fat etc., with the very real risk of heart disease.'[19]
Shell has a much-publicised CSR policy and was a pioneer in triple bottom line reporting, but this did not prevent the 2004 scandal concerning its misreporting of oil reserves, which seriously damaged its reputation and led to charges of hypocrisy. Since then, the Shell Foundation has become involved in many projects across the world, including a partnership with Marks and Spencer (UK) in three flower and fruit growing communities across Africa.
Critics concerned with corporate hypocrisy and insincerity generally suggest that better governmental and international regulation and enforcement, rather than voluntary measures, are necessary to ensure that companies behave in a socially responsible manner.
[edit] Motivations
Corporations are motivated to adopt CSR practices by several different factors.[20]
[edit] Ethical consumerism
The rise in popularity of ethical consumerism over the last two decades can be linked to the rise of CSR. As global population increases, so does the pressure on limited natural resources required to meet rising consumer demand (Grace and Cohen 2005, 147). Industrialization in many developing countries is booming as a result of technology and globalization. Consumers are becoming more aware of the environmental and social implications of their day-to-day consumer decisions and are beginning to make purchasing decisions related to their environmental and ethical concerns. However, this practice is far from consistent or universal.
[edit] Globalization and market forces
As corporations pursue growth through globalization, they have encountered new challenges that impose limits to their growth and potential profits. Government regulations, tariffs, environmental restrictions and varying standards of what constitutes labour exploitation are problems that can cost organizations millions of dollars. Some view ethical issues as simply a costly hindrance. Some companies use CSR methodologies as a strategic tactic to gain public support for their presence in global markets, helping them sustain a competitive advantage by using their social contributions to provide a subconscious level of advertising. (Fry, Keim, Meiners 1986, 105) Global competition places particular pressure on multinational corporations to examine not only their own labour practices, but those of their entire supply chain, from a CSR perspective.
[edit] Social awareness and education
The role among corporate stakeholders to work collectively to pressure corporations is changing. Shareholders and investors themselves, through socially responsible investing are exerting pressure on corporations to behave responsibly. Non-governmental organizations are also taking an increasing role, leveraging the power of the media and the Internet to increase their scrutiny and collective activism around corporate behavior. Through education and dialogue, the development of community in holding businesses responsible for their actions is growing (Roux 2007).
[edit] Ethics training
The rise of ethics training inside corporations, some of it required by government regulation, is another driver credited with changing the behaviour and culture of corporations. The aim of such training is to help employees make ethical decisions when the answers are unclear. Tullberg believes that humans are built with the capacity to cheat and manipulate, a view taken from (Trivers 1971, 1985), hence the need for learning normative values and rules in human behaviour (Tullberg 1996). The most direct benefit is reducing the likelihood of "dirty hands" (Grace and Cohen 2005), fines and damaged reputations for breaching laws or moral norms. Organizations also see secondary benefit in increasing employee loyalty and pride in the organization. Caterpillar and Best Buy are examples of organizations that have taken such steps (Thilmany 2007).
Increasingly, companies are becoming interested in processes that can add visibility to their CSR policies and activities. One method that is gaining increasing popularity is the use of well-grounded training programs, where CSR is a major issue, and business simulations can play a part in this.[citation needed]
[edit] Laws and regulation
Another driver of CSR is the role of independent mediators, particularly the government, in ensuring that corporations are prevented from harming the broader social good, including people and the environment. CSR critics such as Robert Reich argue that governments should set the agenda for social responsibility by the way of laws and regulation that will allow a business to conduct themselves responsibly.
The issues surrounding government regulation pose several problems. Regulation in itself is unable to cover every aspect in detail of a corporation's operations. This leads to burdensome legal processes bogged down in interpretations of the law and debatable grey areas (Sacconi 2004). General Electric is an example of a corporation that has failed to clean up the Hudson River after contaminating it with organic pollutants. The company continues to argue via the legal process on assignment of liability, while the cleanup remains stagnant. (Sullivan & Schiafo 2005). The second issue is the financial burden that regulation can place on a nation's economy. This view shared by Bulkeley, who cites the Australian federal government's actions to avoid compliance with the Kyoto Protocol in 1997, on the concerns of economic loss and national interest. The Australian government took the position that signing the Kyoto Pact would have caused more significant economic losses for Australia than for any other OECD nation (Bulkeley 2001, pg 436). Critics of CSR also point out that organisations pay taxes to government to ensure that society and the environment are not adversely affected by business activities.
Denmark made a law on CSR. 16 December 2008, the Danish parliament adopted a bill making it mandatory for the largest Danish companies, investors and state owned companies to include information on corporate social responsibility (CSR) in their annual financial reports. The reporting requirements became effective on 1 January 2009[21].
The information shall include:
* information on the companies’ policies for CSR or socially responsible investments (SRI)
* information on how such policies are implemented in practice and
* information on what results have been obtained so far and managements expectations for the future with regard to CSR/SRI.
CSR/SRI is still voluntary in Denmark, but if a company has no policy on this they must state information to that effect explicitly in their annual financial report.
More on the Danish law on CSRgov.dk
[edit] Crises and their consequences
Often it takes a crisis to precipitate attention to CSR. One of the most active stands against environmental management is the CERES Principles that resulted after the Exxon Valdez incident in Alaska in 1989 (Grace and Cohen 2006). Other examples include the lead poisoning paint used by toy giant Mattel, which required a recall of millions of toys globally and caused the company to initiate new risk management and quality control processes. In another example, Magellan Metals in the West Australian town of Esperance was responsible for lead contamination killing thousands of birds in the area. The company had to cease business immediately and work with independent regulatory bodies to execute a cleanup.
[edit] Stakeholder priorities
Increasingly, corporations are motivated to become more socially responsible because their most important stakeholders expect them to understand and address the social and community issues that are relevant to them. Understanding what causes are important to employees is usually the first priority because of the many interrelated business benefits that can be derived from increased employee engagement (i.e. more loyalty, improved recruitment, increased retention, higher productivity, and so on). Key external stakeholders include customers, consumers, investors (particularly institutional investors, regulators, academics, and the media).
References
* Bansal, P., R. Roth (2000). "Why Companies Go Green: A model of Ecological Responsiveness". The Academy of Management Journal, Vol.43, No.4, pp. 717–736.
* Bulkeley, H. (2001). "Governing Climate Change: The Politics and Risk Society". Transactions of the Institute of British Geographers, New Series, Vol.26, No.4, pp. 430–447.
* Brand Strategy (2007). "10 key things to know about CSR". London. pg.47.
* Catalyst Consortium (2002). "What is Corporate Social Responsibility?"
* CSR Network. "What is CSR?"
* Fialka. J. (2006). "Politics & Economics: Big Businesses Have New Take on Warming; Some Companies Move From Opposition to Offering Proposals on Limiting Emissions". Wall Street Journal. pg.A.4.
* Fields, S. (2002). "Sustainable Business Makes Dollars and Cents". Environmental Health Perspectives, Vol.110, No.3, pp.A142-A145.
* Fry, L. W., G. D. Keim, R. E. Meiners (1982). "Corporate Contributions: Altruistic or for Profit?" The Academy of Management Journal, Vol.25, No.1, pp. 94–106.
* Grace, D., S. Cohen (2005). Business Ethics: Australian Problems and Cases. Oxford University Press. ISBN 0195507940.
* International Court of Justice. "How the Court Works".
* Pitts, C. (ed.), M. Kerr, R. Janda, & C. Pitts (2009) Corporate Social Responsibility: A Legal Analysis (Toronto: LexisNexis). ISBN 9780433451150.
* Roux, M. (2007). "Climate conducive to corporate action: 1 All-round Country Edition". The Australian. Canberra, A.C.T. pg.14. online article
* Sacconi, L. (2004). A Social Contract Account for CSR as Extended Model of Corporate Governance (Part II): Compliance, Reputation and Reciprocity. Journal of Business Ethics, No.11, pp. 77–96.
* Sullivan, N.; R. Schiafo (2005). Talking Green, Acting Dirty (Op-Ed). New York Times, June 12, 2005.
* Thilmany, J. 2007. "Supporting Ethical Employees." HR Magazine, Vol. 52, No.2, September 2007, pp. 105–110.
* Tullberg, S., J. Tullberg (1996). "On Human Altruism: The Discrepancy between Normative and Factual Conclusions". Oikos, Vol.75, No.2, pp. 327–329.
* Visser, W., D. Matten, M. Pohl, N. Tolhurst (eds.) (2008). The A to Z of Corporate Social Responsibility. Wiley. ISBN 978-0-470-72395-1.
Further reading
* Baker, Mallen. "Arguments against Corporate Social Responsibility". Business Respect. http://www.mallenbaker.net/csr/CSRfiles/against.html. Retrieved 2008-03-07.
* Carroll, A.; A. Buchholtz (2006). Business and Society: Ethics and Stakeholder Management, 6th ed. Mason, OH: Thomson/South-Western. ISBN 0324225814.
* Carroll, A. (1998). "The Four Faces of Corporate Citizenship". Business and Society Review. September, vol. 100, no. 1, pp. 1–7
* Cavett-Goodwin, David (2007-12-03). "Making the Case for Corporate Social Responsibility". Cultural Shifts. http://culturalshifts.com/archives/181. Retrieved 2008-03-07.
* Clarkson, M. (1995). "A stakeholder framework for analyzing and evaluating corporate social performance". Academy of Management Review. Vol.20, pp. 92–117.
* Davis, K.; R. Blomstrom (1975). Business and Society: Environment and Responsibility, New York: McGraw-Hill. ISBN 0070155240.
* Farnham Castle. "Corporate Social Responsibility: New Fad or Necessity". http://www.intercultural-training.co.uk/articles/general/corporate_social_resp.asp. Retrieved 2008-03-07.
* "Ian Davis on business and society". The Economist. 2005-05-26. http://www.economist.com/printedition/displayStory.cfm?Story_ID=4008642. Retrieved 2008-03-07. - advantages and limitations of CSR
* Feltus, C.; Petit, M. (2009). "Building a Responsibility Model Including Accountability, Capability and Commitment", Proceedings of the Fourth International Conference on Availability, Reliability and Security, Institute of Electrical and Electronics Engineers ( IEEE ), Fukuoka, 2009.
* Fombrun, C. (2000). "The value to be found in corporate reputation". Financial Times, December 4, 2000.
* Griffin, J.; J. Mahon (1997). "The Corporate Social Performance and Corporate Financial Performance Debate", Business and Society. Vol. 36. pp. 5–31.
* Holton, Glyn A.. "Investor Suffrage Movement" (PDF). Financial Analysts Journal 62 (6). http://www.contingencyanalysis.com/home/papers/suffrage.pdf. Retrieved 2008-03-07.
* Habisch, A; Jonker, J.; Wagner, M; Schmidpeter, R.(2005): Corporate Social Responsibility Across Europe. Springer. ISBN 3-540-23251-6.
* International Business Report (2008). Corporate Social Responsibility: a necessity not a choice, Grant Thornton.
* Jastram, Sarah (2007). "The Link Between Corporate Social Responsibility and Strategic Management". CIS Papers No.17. Centre of International Studies, Hamburg.
* Lin-Hi, Nick (2008). "Corporate Social Responsibility: An Investment in Social Cooperation for Mutual Advantage", Wittenberg Center for Global Ethics Discussion Paper 2008-6.
* Maignan, I., O. Ferrell, G. Tomas (1999). "Corporate Citizenship: Cultural Antecedents and Business Benefits". Journal of the Academy of Marketing Science. Vol.27, No.4, pp. 455–469.
* Maignan, I., O. Ferrell (2001). "Corporate citizenship as a marketing instrument". European Journal of Marketing. Vol.35, No.3/4, pp. 457–484
* Matten, D., A. Crane, W. Chapple (2003). "Behind the mask: Revealing the true face of corporate citizenship". Journal Business Ethics, Vol.45, No.1, p. 109.
* Menon, A., A. Menon (1997). "Enviropreneurial marketing strategy: the emergence of corporate environmentalism as marketing strategy". Journal of Marketing, Vol.61, pp. 51–67.
* "Millennium Poll on Corporate Responsibility", Environics International Ltd., in cooperation with The Prince of Wales Trust, September 1999.
* Jones, I., M. Pollitt, D. Bek (2006). "Multinationals in their communities: A social capital approach to corporate citizenship projects", University of Cambridge Working Paper 337.
* Manne, Henry G. (2006-11-24). "Milton Friedman Was Right". The Wall Street Journal. http://www.opinionjournal.com/editorial/feature.html?id=110009295. Retrieved 2008-03-07.
* Milchen, Jeff (May, 2000). "Inherent Rules of Corporate Behavior". ReclaimDemocracy.org. http://reclaimdemocracy.org/corporate_accountability/corporations_cannot_be_responsible.html. Retrieved 2008-03-07.
* Norman, Wayne; Chris MacDonald. "Triple Bottom Line: a Critique". http://www.businessethics.ca/3bl. Retrieved 2008-03-07.
* Porter, Michael; Mark Kramer. "The Link Between Competitive Advantage and Corporate Social Responsibility" (PDF). Harvard Business Review. http://harvardbusinessonline.hbsp.harvard.edu/email/pdfs/Porter_Dec_2006.pdf.
* Rowe, James (2005-01-01). "Corporate Social Responsibility as Business Strategy". CGIRS-Reprint-2005-08. Center for Global, International, and Regional Studies, University of California, Santa Cruz. http://repositories.cdlib.org/cgirs/reprint/CGIRS-Reprint-2005-08/. Retrieved 2008-03-07.
* Sen, Sankar, C. B. Bhattacharya and Daniel Korschun (2006). "The Role of Corporate Social Responsibility in Strengthening Multiple Stakeholder Relationships: A Field Experiment." Journal of the Academy of Marketing Science, 34 (2), 158-66.
* SMEs Focus. "Making Europe a Pole of Excellence on Corporate Social Responsibility (CSR)".
* Spence, L.; Habisch, A.; Schmidpeter R. (Editors) (2004). Responsibility and Social Capital. The World of Small and Medium Sized Enterprises. Palgrave. ISBN 0-333-71459-8.
* Visser, Wayne, Dirk Matten, Manfred Pohl, and Nick Tolhurst (Editors) (2007). The A to Z of Corporate Social Responsibility. London, England; New York, NY: Wiley. ISBN 978-0-470-72395-1.
* Waddell, S. (2000). "New institutions for the practice of corporate citizenship: Historical Intersectoral, and Developmental Perspectives". Business and Society Review, Vol.105, pp. 323–345.
* Wartick, S., P. Cochran (1985). "The Evolution of the Corporate Social Performance Model". Academy of Management Review, Vol.10, p. 767.
* Wheeler, David; Maria Sillanpää (1997). The Stakeholder Corporation: a blueprint for maximizing stakeholder value. London: Pitman. ISBN 0273626612.
* Wood, D. (1991). "Corporate Social Performance Revisited". Academy of Management Review, Vol.4, pp. 691–718.
* World Business Council for Sustainable Development (2001), The Business Case for Sustainable Development: Making a difference toward the Johannesburg Summit 2002 and beyond.
* World Business Council for Sustainable Development (2000), Corporate Social Responsibility: Making good business sense.
* World Business Council for Sustainable Development (1999), Corporate Social Responsibility: Meeting changing expectations.
[edit] CSR and the nature of business
Milton Friedman and others have argued that a corporation's purpose is to maximize returns to its shareholders, and that since (in their view), only people can have social responsibilities, corporations are only responsible to their shareholders and not to society as a whole. Although they accept that corporations should obey the laws of the countries within which they work, they assert that corporations have no other obligation to society. Some people perceive CSR as incongruent with the very nature and purpose of business, and indeed a hindrance to free trade. Those who assert that CSR is incongruent with capitalism and are in favor of neoliberalism argue that improvements in health, longevity and/or infant mortality have been created by economic growth attributed to free enterprise.[12]
Critics of this argument perceive neoliberalism as opposed to the well-being of society and a hindrance to human freedom. They claim that the type of capitalism practiced in many developing countries is a form of economic and cultural imperialism, noting that these countries usually have fewer labor protections, and thus their citizens are at a higher risk of exploitation by multinational corporations.[13]
A wide variety of individuals and organizations operate in between these poles. For example, the REALeadership Alliance asserts that the business of leadership (be it corporate or otherwise) is to change the world for the better.[14] Many religious and cultural traditions hold that the economy exists to serve human beings, so all economic entities have an obligation to society (e.g., cf. Economic Justice for All). Moreover, as discussed above, many CSR proponents point out that CSR can significantly improve long-term corporate profitability because it reduces risks and inefficiencies while offering a host of potential benefits such as enhanced brand reputation and employee engagement.
[edit] CSR and questionable motives
Some critics believe that CSR programs are undertaken by companies such as British American Tobacco (BAT),[15] the petroleum giant BP (well-known for its high-profile advertising campaigns on environmental aspects of its operations), and McDonald's (see below) to distract the public from ethical questions posed by their core operations. They argue that some corporations start CSR programs for the commercial benefit they enjoy through raising their reputation with the public or with government. They suggest that corporations which exist solely to maximize profits are unable to advance the interests of society as a whole.[16]
Another concern is when companies claim to promote CSR and be committed to Sustainable Development whilst simultaneously engaging in harmful business practices. For example, since the 1970s, the McDonald's Corporation's association with Ronald McDonald House has been viewed as CSR and relationship marketing. More recently, as CSR has become mainstream, the company has beefed up its CSR programs related to its labor, environmental and other practices[17] All the same, in McDonald's Restaurants v Morris & Steel, Lord Justices Pill, May and Keane ruled that it was fair comment to say that McDonald's employees worldwide 'do badly in terms of pay and conditions'[18] and true that 'if one eats enough McDonald's food, one's diet may well become high in fat etc., with the very real risk of heart disease.'[19]
Shell has a much-publicised CSR policy and was a pioneer in triple bottom line reporting, but this did not prevent the 2004 scandal concerning its misreporting of oil reserves, which seriously damaged its reputation and led to charges of hypocrisy. Since then, the Shell Foundation has become involved in many projects across the world, including a partnership with Marks and Spencer (UK) in three flower and fruit growing communities across Africa.
Critics concerned with corporate hypocrisy and insincerity generally suggest that better governmental and international regulation and enforcement, rather than voluntary measures, are necessary to ensure that companies behave in a socially responsible manner.
[edit] Motivations
Corporations are motivated to adopt CSR practices by several different factors.[20]
[edit] Ethical consumerism
The rise in popularity of ethical consumerism over the last two decades can be linked to the rise of CSR. As global population increases, so does the pressure on limited natural resources required to meet rising consumer demand (Grace and Cohen 2005, 147). Industrialization in many developing countries is booming as a result of technology and globalization. Consumers are becoming more aware of the environmental and social implications of their day-to-day consumer decisions and are beginning to make purchasing decisions related to their environmental and ethical concerns. However, this practice is far from consistent or universal.
[edit] Globalization and market forces
As corporations pursue growth through globalization, they have encountered new challenges that impose limits to their growth and potential profits. Government regulations, tariffs, environmental restrictions and varying standards of what constitutes labour exploitation are problems that can cost organizations millions of dollars. Some view ethical issues as simply a costly hindrance. Some companies use CSR methodologies as a strategic tactic to gain public support for their presence in global markets, helping them sustain a competitive advantage by using their social contributions to provide a subconscious level of advertising. (Fry, Keim, Meiners 1986, 105) Global competition places particular pressure on multinational corporations to examine not only their own labour practices, but those of their entire supply chain, from a CSR perspective.
[edit] Social awareness and education
The role among corporate stakeholders to work collectively to pressure corporations is changing. Shareholders and investors themselves, through socially responsible investing are exerting pressure on corporations to behave responsibly. Non-governmental organizations are also taking an increasing role, leveraging the power of the media and the Internet to increase their scrutiny and collective activism around corporate behavior. Through education and dialogue, the development of community in holding businesses responsible for their actions is growing (Roux 2007).
[edit] Ethics training
The rise of ethics training inside corporations, some of it required by government regulation, is another driver credited with changing the behaviour and culture of corporations. The aim of such training is to help employees make ethical decisions when the answers are unclear. Tullberg believes that humans are built with the capacity to cheat and manipulate, a view taken from (Trivers 1971, 1985), hence the need for learning normative values and rules in human behaviour (Tullberg 1996). The most direct benefit is reducing the likelihood of "dirty hands" (Grace and Cohen 2005), fines and damaged reputations for breaching laws or moral norms. Organizations also see secondary benefit in increasing employee loyalty and pride in the organization. Caterpillar and Best Buy are examples of organizations that have taken such steps (Thilmany 2007).
Increasingly, companies are becoming interested in processes that can add visibility to their CSR policies and activities. One method that is gaining increasing popularity is the use of well-grounded training programs, where CSR is a major issue, and business simulations can play a part in this.[citation needed]
[edit] Laws and regulation
Another driver of CSR is the role of independent mediators, particularly the government, in ensuring that corporations are prevented from harming the broader social good, including people and the environment. CSR critics such as Robert Reich argue that governments should set the agenda for social responsibility by the way of laws and regulation that will allow a business to conduct themselves responsibly.
The issues surrounding government regulation pose several problems. Regulation in itself is unable to cover every aspect in detail of a corporation's operations. This leads to burdensome legal processes bogged down in interpretations of the law and debatable grey areas (Sacconi 2004). General Electric is an example of a corporation that has failed to clean up the Hudson River after contaminating it with organic pollutants. The company continues to argue via the legal process on assignment of liability, while the cleanup remains stagnant. (Sullivan & Schiafo 2005). The second issue is the financial burden that regulation can place on a nation's economy. This view shared by Bulkeley, who cites the Australian federal government's actions to avoid compliance with the Kyoto Protocol in 1997, on the concerns of economic loss and national interest. The Australian government took the position that signing the Kyoto Pact would have caused more significant economic losses for Australia than for any other OECD nation (Bulkeley 2001, pg 436). Critics of CSR also point out that organisations pay taxes to government to ensure that society and the environment are not adversely affected by business activities.
Denmark made a law on CSR. 16 December 2008, the Danish parliament adopted a bill making it mandatory for the largest Danish companies, investors and state owned companies to include information on corporate social responsibility (CSR) in their annual financial reports. The reporting requirements became effective on 1 January 2009[21].
The information shall include:
* information on the companies’ policies for CSR or socially responsible investments (SRI)
* information on how such policies are implemented in practice and
* information on what results have been obtained so far and managements expectations for the future with regard to CSR/SRI.
CSR/SRI is still voluntary in Denmark, but if a company has no policy on this they must state information to that effect explicitly in their annual financial report.
More on the Danish law on CSRgov.dk
[edit] Crises and their consequences
Often it takes a crisis to precipitate attention to CSR. One of the most active stands against environmental management is the CERES Principles that resulted after the Exxon Valdez incident in Alaska in 1989 (Grace and Cohen 2006). Other examples include the lead poisoning paint used by toy giant Mattel, which required a recall of millions of toys globally and caused the company to initiate new risk management and quality control processes. In another example, Magellan Metals in the West Australian town of Esperance was responsible for lead contamination killing thousands of birds in the area. The company had to cease business immediately and work with independent regulatory bodies to execute a cleanup.
[edit] Stakeholder priorities
Increasingly, corporations are motivated to become more socially responsible because their most important stakeholders expect them to understand and address the social and community issues that are relevant to them. Understanding what causes are important to employees is usually the first priority because of the many interrelated business benefits that can be derived from increased employee engagement (i.e. more loyalty, improved recruitment, increased retention, higher productivity, and so on). Key external stakeholders include customers, consumers, investors (particularly institutional investors, regulators, academics, and the media).
References
* Bansal, P., R. Roth (2000). "Why Companies Go Green: A model of Ecological Responsiveness". The Academy of Management Journal, Vol.43, No.4, pp. 717–736.
* Bulkeley, H. (2001). "Governing Climate Change: The Politics and Risk Society". Transactions of the Institute of British Geographers, New Series, Vol.26, No.4, pp. 430–447.
* Brand Strategy (2007). "10 key things to know about CSR". London. pg.47.
* Catalyst Consortium (2002). "What is Corporate Social Responsibility?"
* CSR Network. "What is CSR?"
* Fialka. J. (2006). "Politics & Economics: Big Businesses Have New Take on Warming; Some Companies Move From Opposition to Offering Proposals on Limiting Emissions". Wall Street Journal. pg.A.4.
* Fields, S. (2002). "Sustainable Business Makes Dollars and Cents". Environmental Health Perspectives, Vol.110, No.3, pp.A142-A145.
* Fry, L. W., G. D. Keim, R. E. Meiners (1982). "Corporate Contributions: Altruistic or for Profit?" The Academy of Management Journal, Vol.25, No.1, pp. 94–106.
* Grace, D., S. Cohen (2005). Business Ethics: Australian Problems and Cases. Oxford University Press. ISBN 0195507940.
* International Court of Justice. "How the Court Works".
* Pitts, C. (ed.), M. Kerr, R. Janda, & C. Pitts (2009) Corporate Social Responsibility: A Legal Analysis (Toronto: LexisNexis). ISBN 9780433451150.
* Roux, M. (2007). "Climate conducive to corporate action: 1 All-round Country Edition". The Australian. Canberra, A.C.T. pg.14. online article
* Sacconi, L. (2004). A Social Contract Account for CSR as Extended Model of Corporate Governance (Part II): Compliance, Reputation and Reciprocity. Journal of Business Ethics, No.11, pp. 77–96.
* Sullivan, N.; R. Schiafo (2005). Talking Green, Acting Dirty (Op-Ed). New York Times, June 12, 2005.
* Thilmany, J. 2007. "Supporting Ethical Employees." HR Magazine, Vol. 52, No.2, September 2007, pp. 105–110.
* Tullberg, S., J. Tullberg (1996). "On Human Altruism: The Discrepancy between Normative and Factual Conclusions". Oikos, Vol.75, No.2, pp. 327–329.
* Visser, W., D. Matten, M. Pohl, N. Tolhurst (eds.) (2008). The A to Z of Corporate Social Responsibility. Wiley. ISBN 978-0-470-72395-1.
Further reading
* Baker, Mallen. "Arguments against Corporate Social Responsibility". Business Respect. http://www.mallenbaker.net/csr/CSRfiles/against.html. Retrieved 2008-03-07.
* Carroll, A.; A. Buchholtz (2006). Business and Society: Ethics and Stakeholder Management, 6th ed. Mason, OH: Thomson/South-Western. ISBN 0324225814.
* Carroll, A. (1998). "The Four Faces of Corporate Citizenship". Business and Society Review. September, vol. 100, no. 1, pp. 1–7
* Cavett-Goodwin, David (2007-12-03). "Making the Case for Corporate Social Responsibility". Cultural Shifts. http://culturalshifts.com/archives/181. Retrieved 2008-03-07.
* Clarkson, M. (1995). "A stakeholder framework for analyzing and evaluating corporate social performance". Academy of Management Review. Vol.20, pp. 92–117.
* Davis, K.; R. Blomstrom (1975). Business and Society: Environment and Responsibility, New York: McGraw-Hill. ISBN 0070155240.
* Farnham Castle. "Corporate Social Responsibility: New Fad or Necessity". http://www.intercultural-training.co.uk/articles/general/corporate_social_resp.asp. Retrieved 2008-03-07.
* "Ian Davis on business and society". The Economist. 2005-05-26. http://www.economist.com/printedition/displayStory.cfm?Story_ID=4008642. Retrieved 2008-03-07. - advantages and limitations of CSR
* Feltus, C.; Petit, M. (2009). "Building a Responsibility Model Including Accountability, Capability and Commitment", Proceedings of the Fourth International Conference on Availability, Reliability and Security, Institute of Electrical and Electronics Engineers ( IEEE ), Fukuoka, 2009.
* Fombrun, C. (2000). "The value to be found in corporate reputation". Financial Times, December 4, 2000.
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