Corporate Social Responsibility (CSR) is ironically like pornography. While people basically know what it is, they can't really define it. People tend to define corporate social responsibility with their eyes, their thinking, and their own preconceived notions. The United Nations have established a standard for it. Currently, many people are focusing on a certain standard that deals with what they would call “sustainability.” In a broader sense, sustainability includes both corporate social responsibility and environmental responsibility. A lot of people looked at the latter-the so-called “green movement”-and struggled with its connotation. Should corporate responsibility be a requirement because of the aforementioned standard and the laws of the land or what consumers demand from their suppliers? As a result, corporate social responsibility has become a generic term.
Jagdish Dalal, who heads a chapter of corporate responsibility consultants, has adopted his own four-part definition for CSR. Those four things consist of: 1) philanthropic responsibility; 2) being a good, responsible corporation; 3) ethical responsibility and; 4) legal and economic responsibility, which entails being profitable. When you talk about corporate social responsibility, those four components always come into play. You bring in sustainability, and that encompasses environmental responsibility. Put all that together and that is the essence of CSR.
CSR is slowly evolving into various organizations establishing different standards and then asking that organization to comply with and certify themselves against that set of standards. Presently, there are standards that deal with environmentally appropriate behavior regarding whether established regulations controlling water and air quality are being followed. Likewise, there are laws put in place that deal with economic and ethical responsibility. For example, there is the Ethical Responsibility Act which requires a company’s CFO and CEO to sign off on business practices that concern the public. If they neglect doing so, it can end up a fraudulent offense that they can be legally charged with. Corporations are now looking to some standards bodies like theInternational Organization for Standardization (ISO), corporate governance law firms, the Securities and Exchange Commission (SEC), and like organizations to provide them with the guidance. If you are a small or medium-sized company, it would be beneficial to obtain compliance standards advice and be recognized for your part in contributing to CSR. Something like being a “good corporate citizen” is amorphous in terms of definition.
DonationXChange hostest a radio show with Jagdish Dalal: http://www.blogtalkradio.com/
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