Archive for the ‘What Corporations Actually Do’ Category

How Corporate Social Responsibility is evolving

The background of CSR

The history of CSR is almost as long as that of companies. Concerns about the excesses

of large companies were commonly expressed back in the seventeenth century. The topics then were not the environment, but the treatment of workers. Today, the evolution of the importance of acting responsible is described on as follows:

Corporate Social Responsibility has been around as a concept for some time. It has been increasingly picking up momentum and allowing corporate bodies, hitherto focused only on making profits for shareholders and promoters to look beyond these horizons.

Many factors have changed CSR over time and one factor that may change it right now is the latest environmental disaster.

Will the BP oil spill change CSR?

While the BP oil spill may not change the definition of CSR, it may well change how critically activities concerning CSR are evaluated. There’s a critical assessment of how Corporate Social Responsibility activities are rated on, which states:

Remarkably, BP got very good marks from a corporate social responsibility standpoint, which suggests there are deep seated flaws in that methodology.

The future of CSR

While it seems that the definition of CSR is sufficient, the implementation is not. One possible future of the realization of socially responsible actions is envisioned here:

CSR can become a tool of corporations to be used tactically to defuse criticism and protect their image or it can become an effective tool in truly democratic societies to make corporations socially and environmentally responsible by creating a sustainable business ethos.

Corporate Social Responsibility is an evolving and exciting topic and it’ll be interesting to see how it will change over time.



External CSR – Panasonic’s graph

When companies define their external CSR strategies, they must take into account all the external stakeholders. It includes local communities and citizens.

Concerning its external CSR strategy, Panasonic focuses on the important global issues of the next generation and the environment. The company uses seven parameters to evaluate its citizenship activities based on a process that includes the input of external organizations (see on the graph below).

Using a graph is really useful for people who are looking for what kind is undertaken by companies and for the companies that must achieve some objectives.

This model seems to be inspired from the Kaldor’s magic square. This theory assumes that a country must reach the 4 corners of the square to reach the best possible economic situation. It’s called magic square because it’s really difficult to reach the 4 corners at the same time (it’s more of an utopian situation of the economy) but evolutions are always possible.

Using an image or diagram is really useful. It helps us understand companies’ strategies and also helps companies keep in mind what their objectives are and the improvements they have made.

Sources: Panasonic’s website

CSR Is No Crisis Management

In times of the disaster in the Gulf of Mexico it is important to realize that CSr does not equal crisis management. As this article states, CSR needs to be seen as follows:

„CSR policy is to identify environmental, social and governance risks and prevent disasters from happening in the first place.“

So this means in the case of BP they should now treat the problem in a way it will avoid further problems in the future. Transparency is a big and important word in this context. And if you think about the fact that BP used be in some major CSR rankings and called it a company that takes care of its environment, I found this video quite interesting. Especially if you keep in mind the earlier mentioned definition of CSR. Prevent disaster. Identify environmental, social and governance risks.
The oil spill in 1979 could have been a warning fort he oil drilling industry. Back than they tried the same technology to try to stop the oil spilling out. Nothing of what BP has tried so far worked back than. Why would it today?
And as this website shows and argues, BP is a great example fort he fact that CSR is no optional thing for companies. It is a must.

Cleaning up a PR disaster with Corporate Social Responsibility?

During the past year, one PR disaster followed another. In spring, Toyota’s cars seemed to have developed their own will. Soon after Goldman Sachs was accused of fraud and now BP has turned the Gulf of Mexico into a sea of oil. How did these corporations deal with the crises?

For the most part companies have surrounded themselves with crisis-management teams and public-relations hired guns to deal with their short-term problems. But if they are smart troubled companies will also review their policies around the emerging field of corporate social responsibility  to discover why things went so wrong, states Jason Kirby.

But can this be the solution to all Public Relations problems companies face today? Using CSR only for the benefit of the corporate image? That CSR is misused as a marketing ploy happens more often than most would like.

In the case of BP, company CEO Tony Hayward has apologized to Gulf residents. But the company could take further steps, say experts, such as establishing a transparent grievance process through which locals can file claims.

I believe that it is valuable that organizations benefit of Corporate Social Responsibility as well (see previous post on benefits). It is the only way that organizations use CSR, without regulations. But of course, using CSR only superficially to prevent bad PR is not what is intended by the idea of acting responsible.

How to develop a CSR Strategy

Organizations face a vast number of challenges in today’s world. One of them is how to develop a strategy for Corporate Social Responsibility. A strategy that is in line with the companies concept. A strategy in which specific priority areas are named. And also a strategy that fits into the organization’s budget and can be published and thus benefits the organization.

A helpful source for all companies facing challenges when it comes to implementing a CSR strategy is , which offers not only information and advice on the topic, but also “examples of practical company solutions to CSR challenges”.

In order to make sure that such CSR strategies are not merely for PR reasons, rankings have been established to prevent this case. An example is the Ethisphere Institute’s Most Ethical Companies. On the other hand are exactly these rankings criticized in a blog by my fellow student Fanny Siegl.

Developing the best strategy is important for organizations, so they can keep up with their competitors. While there are various ways to do it, the most important thing is: To do it at all.

BP and CSR: A Myth?

With the oil spill in the Gulf of Mexico getting worse and worse every day, criticism is getting more and more.

This week news were talking about that the U.S. government could hold BP back from paying giant dividend to its shareholder. 12 % of dividends paid to pensioners in the UK are from British Petroleum, showing which awful affect this would have in Great Britain. But on the other hand all the cleaning needs to be paid, people who lost their jobs need to get paid and the oil spill needs to be stopped. So the decision was to be made between BP will help the US or the UK. After a talk between Primeminister

But today Barack Obama had his speech declaring, “we will make BP pay for the damage their company has caused”. It was a speech that a lot of people were hoping it would make a big change in the way the government has dealt so far with the ongoing disaster. Shortly after the speech, the first critism arose. This is a comment by a BBC reporter:

“He pledged that BP would pay for the damage; that the Gulf Coast would be restored; that an offshore drilling moratorium would be kept in place while lessons were learnt; and that the body charged with regulating the oil industry would be reformed.

The president did not stop there. He spoke in lofty terms about moving away from fossil fuels, embracing a clean energy future and shaping the country’s destiny.”

It once again feels like that politicians and BP are overwhelmed by the extent of the disaster. But not only politicians are expressing their opinions. People have now found some platforms to express their feelings about this disaster in a creative way.Greenpeace has started a contest for a new logo for BP. Not only have they handed over the “Greenwashing-Award” to BP, but they also make an effort to “degreen” their logo with this contest.These are some examples:

This website shows you how your home would look like, if the oil spill would be were you live. It recognizes where you are and puts the oil field over your “home”. It is quite shocking…

SHELL’s CSR strategy

With all the hype over BP, I would like to look at another energy and petroleum company to see what CSR strategy they have. I found out that Shell has a very good initiative and they have excellent programs.

Shell started the Shell Foundation which is their CSR arm in 2000. It is a worldwide social investment initiative which promotes sustainable development. Their main aim is to maximize benefit to the society and environment and to have integrity in their operations.

They have 6 main programs, namely: Aspire, Breathing Space, Trading Up, Embarq, Excelerate and Climate Change.

Please click here to find out more about their programs. Here’s a video link which can help you understand more about their programs.

Even a member of the Committee of Managing Directors, Jeroen van der Veer, agrees that CSR is important. He states that “In my view the successful companies of the future will be those that integrate business and employees’ personal values. The best people want to do work that contributes to society with a company whose values they share, where their actions count and their views matter.”

So far, the Shell Foundation has brought energy to the poor; helped to tackle indoor air pollution; reduced greenhouse gases and helped to find sustainable solutions. I believe that Shell Foundation is actually doing what they preach as they have newspaper reports and magazine articles to prove it. People around the world know that Shell is doing their part for society and this gives Shell an advantage over other petroleum companies such as BP. I feel that companies should find a suitable CSR strategy for their company and start to give back.