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Corporate Social Responsibility:Introduction & Definitions

Suthisak KraisornsuthasineeAssistant Professor

Faculty of Commerce & AccountancyThammasat University

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Introduction: CSR

The Dawn of the CSR EraDrivers of CSRBenefits and ChallengesCSR Definitions and ScopeIssues & Initiatives of CSRFrom Principles to PracticeFuture of CSR: On the Way to ISOOrganizations promoting CSR

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The Dawn of the CSR Era

“85% of (140 Chief Executives of U.S. based MNCs)believe that sustainable development will be even moreimportant to their business model in five years than it istoday.”

Recent Survey adm inistered byPriceW aterhouseCooper

International Institute of Sustainable Development

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The Dawn of the CSR Era

“Overall, respondents see CSR as becoming aneven more important part of business practice fiveyears from now, and will make crucial an necessarycontributions for the betterment of people and theenvironment.”

Business for Social Responsibility and Dutch Ministry of Economic Affairs

Survey adm inistered atThe European Conference on CSR (Maastricht, Novem ber 7-9, 2004) &

The BSR Annual Conference (New York, Novem ber 9-12, 2004)

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Drivers of CSR

The shrinking role of governmentDemands for greater disclosureIncreased customer interestGrowing investor pressureCompetitive labor marketsSuppliers relations

Business and Sustainable Development (BSD Global)

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Benefits of CSR…

Increased sales and market share.Strengthened brand positioning.Enhanced corporate image and clout.Increased ability to attract, motivate, and retainemployees.Decrease operating costs.Increased appeal to investors and financialanalysts.

Kotler and Lee, 2005

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… and Challenges

Choosing a social issues.Selecting an initiative to address the issue.Developing and implementing program plans.Evaluation.

Kotler and Lee, 2005

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What is CSR?

Variety of Terms

Corporate Social Responsibil

Corporate Citizenship

Corporate ResponsibilitySocial Responsibility

Corporate Philanthropy

Global Citizenship

Organizational Social Responsib

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Definitions: Concept

Philip Kotler & Nancy Lee (2005)

“a commitment to improve communitywell-being through discretionary businesspractices and contributions of corporateresources”.

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Definitions: Practice

WBCSD (World Business Council forSustainable Development)

“The continuing commitment by business tobehave ethically and contribute tosustainable economic development whileimproving the quality of life of the workforceand their families as well as of the localcommunity and society.”

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Definitions: Practice

BSR (Business for Social Responsibility)

“achieving commercial success in ways thathonor ethical values and respect people,communities, and the natural environment.”

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Scope

CSR ?

Economic

Environ-mental

Social

CSR ?CSR ?

CSR ?

CSR and Sustainable Developm ent

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Scope

CorporateGovernance

& Ethics

People

ContributionTo DevelopmentEnvironment

Corp

orat

e Ci

tizen

ship

Corporate Citizenship

Corporate Citizenship

CorporateGovernance

& Ethics

Local and global environmental qualityCleaner production processesEco-efficiencyEnvironmental Technology

Product & worker safetyLabor standards

Human rightsEqual opportunity and access

Corporate Values and purposeTransparency and accountability

Tacking corruption

Enterprise developmentCommunity Investment

EducationHealth/HIV/AIDS

Digital Divide

The World Economic Forum, 2002

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Issues: by Value Chain

CSR The WBCSD’s Journey

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Issues: by Social Ratings

KLD Social Rating CriteriaCommunityCorporate GovernanceDiversityEmployee RelationsEnvironmentHuman RightsProducts

KLD Research & Analytics Inc.

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Initiatives

Cause PromotionsSupporting social causes through promotionalsponsorships

Cause-related MarketingMaking a contribution or donating apercentage of revenues to a specific causebased on product sales or usage.

Kotler and Lee, 2005

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Initiatives

3. Corporate Social MarketingSupporting behavior change campaigns.

4. Corporate PhilanthropyMaking direct contribution to a charity orcause.

Kotler and Lee, 2005

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Initiatives

Community VolunteeringProviding volunteer services in the community.

Socially Responsible Business PracticesAdopting and conducting discretionarybusiness practices and investments thatsupport social causes.

Kotler and Lee, 2005

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From Principles to Practice

Framework for CSRProvide Leadership

- Articulate purpose, principles and valuesinternally and externally;

- Promote ‘business case’ internally;- Engage the financial sector;- Enter the debate on globalization and the role of

business in development;

The 2002 World Economic Forum & BSD Global

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From Principles to Practice

Define what it means for your company

- define the issues;- Agree on company’s spheres of influence;- Identify key stakeholders;

The 2002 World Economic Forum & BSD Global

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From Principles to Practice

Make it happen

- put corporate citizenship on board agenda;- establish internal performance, communication,

incentive and measurement systems;- engage in dialogue and partnership;- encourage innovation and creativity;- build the next generation of business leaders;

The 2002 World Economic Forum & BSD Global

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From Principles to Practice

4. Be Transparent about it- Agree what and how to measure;- Develop a program for external reporting;- Be realistic.

The 2002 World Economic Forum & BSD Global

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Future of CSR: On the Way to ISO

The International Organization forStandardization (ISO) decided to developstandard for ISO in 2002

1st Discussion in 2004

2nd international meeting to draft thestandard in September 2005

in Bangkok

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Organizations promoting CSR

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Thank you for your attention

Q & A Session