8-1 Modern Trends in Social Responsibility

Vocabulary

• corporate social responsibility
  • A form of corporate self-regulation integrated into a business model in which companies aim to embrace responsibility for their actions and encourage a positive impact through their activities on the environment, consumers, employees, communities and other stakeholders. Commonly abbreviated as CSR.

Example

A social entrepreneur can be the founder or co-founder or a chief functionary (president, secretary, treasurer, CEO, or chairman) of a social enterprise or non-profit. Examples of some of social entrepreneurs based in India are Ramji Raghavan, founder and Chairman of the Agastya International Foundation; Harish Hande, founder of Selco India; Rippan Kapur of Child Rights; and You and Jyotindra Nath of Youth United.

Pre-reading

Boundless. "Modern Trends in Social Responsibility." N.p., n.d. Web. 17 July 2017 from https://www.boundless.com/business/textbooks/boundless-business-textbook/business-ethics-and-social-responsibility-3/social-responsibility-35/modern-trends-in-social-responsibility-183-3207

Corporate Social Responsibility

Corporate social responsibility (abbreviated CSR; also called corporate conscience, corporate citizenship, social performance, or sustainable responsible business) is a form of self-regulation integrated into a business model. A socially responsible business monitors and ensures its active compliance with the spirit of the law, ethical standards, and international norms. The goal of CSR is for a company to take accountability for its actions and achieve and encourage a positive impact on the environment as well as its consumers, employees, communities, and other stakeholders.

CSR is designed to support an organization's mission as well as to guide what the company stands for and will deliver to its consumers. ISO 26000 is the recognized international standard for CSR. Public sector organizations (e..g, the United Nations) adhere to the so-called triple bottom line (TBL): maximizing (1) profit, (2) social impact, and (3) environmental impact. The UN has developed the Principles for Responsible Investment as guidelines for investing entities. CSR adheres to similar principles but has no formal act of legislation.

Discussion questions:

• Are there any words you don't know? In particular, do you know what compliance, standards and norms are?
• What is the goal of corporate social responsibility? Do you think all business should have similar goals?
• What is the triple bottom line? Do you think this idea is useful for businesses?

Reading

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Socially Responsible Investing

Socially responsible investing is the practice of investing funds only in companies deemed to be socially responsible according to a given set of criteria. It is a booming market in both the US and Europe. As of 2010, nearly one out of every eight dollars under professional management in the US is involved in socially responsible investing; this is 12.5% of the $25.2 trillion in total assets under management tracked by Thomson Reuters Nelson.

Sustainability Accounting

Sustainability accounting has increased in popularity over the past few decades. Many companies are adopting new methods and techniques in their financial disclosures that provide information about their core activities and their impact on the environment. As a result of this action, stakeholders, suppliers, and governmental institutions have a better understanding of how companies manage their resources to achieve sustainable development.

Sustainability accounting connects a company's strategies to a sustainable framework by disclosing three dimensions of information: environmental, economic, and social. In practice, however, it is often difficult to put together policies that simultaneously promote environmental, economic, and social goals.

Social Entrepreneurship

Social entrepreneurship is the recognition of a social problem and the use of entrepreneurial principles to organize, create, and manage a social venture to achieve social change. While a business entrepreneur typically measures performance in profit and return, a social entrepreneur also cares about positive social, cultural, and environmental progress. Social entrepreneurs are commonly associated with the voluntary and not-for-profit sectors, but this doesn't necessarily mean they don't make a profit. Social entrepreneurship practiced with a global perspective or embedded in an international context is called international social entrepreneurship.

One well-known contemporary social entrepreneur is Muhammad Yunus, founder and manager of Grameen Bank and its growing family of social venture businesses. He was awarded a Nobel Peace Prize in 2006. Yunus' and Grameen Bank's work supports the claims of modern-day social entrepreneurs regarding the enormous synergies and benefits achieved when business principles are unified with social ventures. In some countries—including Bangladesh and, to a lesser extent, the USA—social entrepreneurs have filled the spaces neglected by a relatively small state. In other countries, particularly Europe and South America, social entrepreneurs tend to work more closely with public organizations at both the national and local levels. Today, non-profits, non-governmental organizations, foundations, governments, and individuals play a role in promoting, funding, and advising social entrepreneurs around the world.