Corporate social responsibility: a new business paradigm
President, World Business Council for Sustainable Development (WBCSD)
Ten years ago, corporate social responsibility (CSR) was not a widely discussed subject in companies. Of course, the context was different. A decade ago, when the Rio Earth Summit happened, discussions were focused on environment and development, not sustainable development. From environment and development, we have moved to sustainable development.
Defining CSR for business
Although an increasing number of companies come to recognise that CSR goes beyond the 'good deeds in the community' and is a matter for strategic debate, there is no universal definition of corporate social responsibility because the concept is always being redefined to serve changing needs and times. It is up to each company individually to define the values and principles it stands for, its 'magnetic north' as we call it in the WBCSD.
While the fundamentals of CSR remain the same everywhere, different emphases are found in different parts of the world. The issues vary in nature and importance from industry to industry and location to location. The social issues faced by an energy company, for example, will be of a different magnitude compared to those faced by a pharmaceutical company, and tackling HIV/AIDS in the workplace will take on added intensity for operating units in Southern Africa, compared to those in Europe.
So, the areas impacted by corporate social responsibility are diverse and growing each time a company confronts a new challenge or crisis. They include human rights, labour conditions, supplier relations, corruption and community development.
Because there is no universal definition of CSR, there can be no 'one size fits all' approach. No set of CSR progress indicators can suit all companies. To respond to the varying needs of business in the most flexible way possible, the WBCSD has devised a 12-point navigator to guide companies through their social challenges and dilemmas.
The navigator is both a tool and a conceptual approach and should be applied in light of each company's assessment of its own particular situation. It indicates direction and demands vision, but does not dictate the speed of progress. It is flexible enough to respond to individual company challenges and dilemmas. The navigator emphasises that the vigour with which a particular company pursues its vision on CSR is specific to that company's individual situation.
The WBCSD navigator consists of 12 distinct reference points which can help a company on its CSR journey.
The CSR 12-point navigator:
- Determine your 'magnetic north'
- Build-in the strategic business case
- Focus on individuals
- Determine your legacy
- Put employees first
- Know your neighbour, community and culture
- Debate and dialogue
- Pursue smart partnerships
- Reputation matters
- Be a good guest
- Measure and account for what you do
- Handle with care information, knowledge and technology
Not a new issue
Corporate social responsibility has been one of the WBCSD's major work streams for the past years. We produced two reports. In the first one published in 1999, 'Meeting Changing Expectations', we looked at why corporate social responsibility matters to business and how business can 'boil down' the concept to practical actions.
In our second report released in 2000, 'Making Good Business Sense', we took a broader approach. We went to seven countries of the developing world to test our thinking and gauge opinions of what stakeholders, from business and non-business circles, thought corporate social responsibility meant.
The essence of corporate social responsibility is to recognise the value of external stakeholder dialogue. Because of this, we placed stakeholder engagement at the centre of our CSR activity. The views that we heard varied from location to location but in every case, the underlying message remained the same: through corporate social responsibility, companies can have a large and positive effect on society.
Overall, stakeholder dialogues have been a hallmark of the WBCSD's work. Over the last three years, these have involved some 2,000 stakeholders in 100 major dialogues, affecting virtually all of our work programs and taking us around the world to gauge opinions and test our findings.
In January 2002, to wrap-up our CSR work, we released a pamphlet entitled 'Corporate Social Responsibility: The WBCSD's Journey'. This short document summarises our current thinking on the topic and provides the transition step to our next generation of work on this topic. Our next phase of work will be focused on how companies are implementing the CSR concept in their daily work. What represents best practice when dealing with the topic? How can we stimulate learning by sharing between companies on social practices?
In a certain way, our work progression reflects the evolution of the CSR concept itself. Earlier, CSR was primarily understood as a local concept with a limited sphere of influence, whereby a company's responsibility was confined to the community in which it operated. Today, it is understood in much broader terms and is about companies adopting and implementing global CSR policies to the benefit of society.
As an extension of our work on CSR, we have started a new project on 'Sustainable Livelihoods: The Business Connection' to examine the role of business in supporting a sustainable development in developing countries. Poverty alleviation and ensuring sustainable livelihoods goes beyond the CSR debate, but it is clearly an area where business can play a part.
On a parallel track, through our research on 'Sustainability through the Market', we have investigated how markets can help advance sustainable development. The report we released last year identifies seven keys to achieving sustainability through the market. One key is about making markets work for the poor and how companies can deliver products and services that help to provide the current 2.8 billion people, almost half of the world's population, who live on less than USD 2 a day, with ways out of poverty.
For more information, please contact:
The World Business Council for Sustainable Development
+41 22 839 3100