Is there a business case for CSR?

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Business School Lausanne received a visit from Michael Hopkins [1] in September 2013.  Professor Hopkins is a well-known expert on Corporate Social Responsibility (CSR) and was recently named as one of the world’s 100 thought leaders on trustworthy business behavior in 2013. Hopkins gave his listeners a comprehensive explanation of how he has lived and seen the process and thinking relating to CSR over a 20 year period. Different influences such as economist Wassily Leontief and development gurus Arthur Lewis and AK Sen [2] and Michael’s own  work on human development,  his interest in seeing what business was doing in terms of development were all part of his personal journey in this subject.

Starting his talk with a discussion on the United Nations and its role, the criticisms it receives from countries that believe it is just a “talking shop” set the scene. According to Hopkins, and I completely agree, there is need for a place where people can discuss.  So what is wrong with a talking shop? To cite Winston Churchill, ‘jaw-jaw is preferable to war-war’!

The work of the United Nations Development Program, the UN Human Rights Council, the World Health Organization and the World Trade Organization were touched on and the audience was informed that the United Nations budget is less than the New York Health budget! Now I didn’t know that! Hard to lead the world on such a tight budget.

Business and Development

According to our speaker, business is doing a lot nowadays with regards to development; the UN pays out about 15 billion dollars a year in this area while corporations are involved to the extent of at least 50-80 billion dollars yearly [3]. Changes that came about with the set-up of Kofi Annan’s UN Global Compact in the early 2000s and the work of the World Economic Forum with its annual Davos meeting helped change the global landscape as it applies to business and its responsibility with regards to profit, planet and people.

Business case for CSR?

So coming back to Professor Hopkins presentation, his interest in development issues and the private sector, he wants to know whether CSR makes any sense? And here, naturally, comes the big question “Is there a business case for CSR?”  Hopkins feels that companies have to do more than just do good, (philanthropy), they have to aim at the business case, they must make profits and their aims must be long term.  How, for example, do companies deal with employees? CSR goes down this path…

Examples of oil companies working in volatile areas dealing with issues which impact local communities were touched upon.  Apparently the major costs borne by these companies relate to security issues, Professor Hopkins was told by Shell that 80% of total above ground expenditure is spent on security!  Amazing and very worrying, I would imagine, for the corporate bodies in question.

And then there is the sticky question of companies’ links with governments- can corporations’ work with all governments? How should they do so? Problems of bribery, corruption were discussed.

Back to the discussion on CSR and the necessity of business acting responsibly and behaving ethically. The need to look beyond business as usual and consider all stakeholders [4], taking responsibility further than the law requires  and implementing all this in the strategy of the company for its long term profitability. Of course!

Definition/s of CSR?

Hopkins wondered about the myriad of definitions of CSR to be found – those elaborated by the European Union, the World Business Council of Sustainable Development, (WBCSD) , Mallen Baker [5] and the International Labor Organization to name but a few. The EU definition was, apparently, included in the new ISO 26,000 guidelines on Social Responsibility.

For himself Michael Hopkins has his own definition and he has thought about it over a long period of time, having worked in the area of development, with corporations, as an academic and a writer. The definition is long and comprehensive and here it is:

Michael Hopkins definition of CSR:

  1. “Corporate Social Responsibility is concerned with treating the stakeholders of a company or institution ethically or in a responsible manner. ‘Ethically or responsible’ means treating key stakeholders in a manner deemed acceptable according to international norms.
  2. Social includes economic and environmental responsibility. Stakeholders exist both within a firm and outside.
  3. The wider aim of social responsibility is to create higher and higher standards of living, while preserving the profitability of the corporation or the integrity of the institution, for peoples both within and outside these entities.
  4. CSR is a process to achieve sustainable development in societies. “

Sounds good to me, Michael!        


[1] Dr. Michael Hopkins is CEO and Chairman of MHC International Ltd., a research and service company on Corporate Social Responsibility (CSR) and Labor Markets. He is Professor of Corporate & Social Research at the University of Middlesex in London, UK and Adjunct Professor of CSR at George Mason University in Washington DC. Hopkins was the Founder and Director of Executive Programmes on CSR at the University of Geneva, Switzerland.  Hopkins has authored 12 books, including The Planetary Bargain: CSR Matters (Earthscan, 2003) and CSR and International Development (Earthscan, 2007).In his book Strategic CSR (2012) he widens the ‘corporate responsibility’ concept to all ‘bodies’ both private and public.

[2] Nobel prize winners for Economics Sen (1998) Arthur Lewis (1979) Wassily Leontief (1973)

[3] According to Michael Hopkins, presentation BSL 26th September, 2013

[4] Hopkins referred to  Freeman, R. Edward (1984). Strategic Management: A stakeholder approach. Boston: Pitman

[5] Mallen Baker “ how companies manage the business processes to produce an overall positive impact on society”

Mary Mayenfisch-Tobin, BCL, LL.M, Solicitor

Stakeholder Relations and Student Counseling at BSL

marymayenfish

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