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Corporate Sustainability and Responsibility: Creating Value for Business, Society and the Environment

 

 

 

This an excerpt from my latest open-access paper in Springer’s Asian Journal of Sustainability and Social Responsibility.

This review paper has built on the previous theoretical underpinnings of the corporate social responsibility agenda including Stakeholder Management, Corporate Citizenship and Creating Shared Value as it presents the latest Corporate Sustainability and Responsibility perspective. This value-based model reconciles strategic CSR and environmental management with a stakeholder approach to bring long term corporate sustainability, in terms of economic performance for the business, as well as corporate responsibility’s social outcomes.

Recently, some international conferences including Humboldt University’s gatherings in 2014 and 2016 have also raised awareness on this proposition. The corporate sustainability and responsibility concept is linked to improvements to the companies’ internal processes including environmental management, human resource management, operations management and marketing (i.e. Corporate Sustainability). At the same time, it raises awareness on the businesses’ responsible behaviours (i.e. Corporate Responsibility) toward stakeholders including the government, suppliers, customers and the community, among others. The fundamental motivation behind this approach is the view that creating connections between stakeholders in the value chain will open-up unseen opportunities for the competitive advantage of responsible businesses, as illustrated in Table 2. Corporate sustainability and responsibility focuses on exploiting opportunities that reconcile differing stakeholder demands as many corporations out there are investing in corporate sustainability and responsible business practices (Lozano 2015). Their active engagement with multiple stakeholders (both internal and external stakeholders) will ultimately create synergistic value for all (Camilleri 2017).

 

Multinational organisations are under increased pressures from stakeholders (particularly customers and consumer associations) to revisit their numerous processes in their value chain activities. Each stage of the company’s production process, from the supply chain to the transformation of resources could add value to their businesses’ operational costs as they produce end-products. However, the businesses are always expected to be responsible in their internal processes toward their employees or toward their suppliers’ labour force. Therefore, this corporate sustainability and responsibility perspective demands that businesses create economic and societal value by re-aligning their corporate objectives with stakeholder management and environmental responsibility. In sum, corporate sustainability and responsibility may only happen when companies demonstrate their genuine willingness to add corporate responsible dimensions and stakeholder engagement to their value propositions. This occurs when businesses opt for responsible managerial practices that are integral to their overall corporate strategy. These strategic behaviours create opportunities for them to improve the well-being of stakeholders as they reduce negative externalities on the environment. The negative externalities can be eliminated by developing integrated approaches that are driven by ethical and sustainability principles. Very often, multinational businesses are in a position to mitigate risk and to avoid inconveniences to third parties. For instance, major accidents including BP’s Deep Horizon oil spill in 2010, or the collapse of Primark’s Rana Plaza factory in Bangladesh, back in 2013, could have been prevented if the big businesses were responsible beforehand.

In conclusion, the corporate sustainability and responsibility construct is about embedding sustainability and responsibility by seeking out and connecting with the stakeholders’ varied interests. As firms reap profits and grow, there is a possibility that they generate virtuous circles of positive multiplier effects (Camilleri 2017). Therefore, corporate sustainability and responsibility can be considered as strategic in its intents and purposes. Indeed, the businesses are capable of being socially and environmentally responsible ‘citizens’ as they are doing well, economically. This theoretical paper has contributed to academic knowledge as it explained the foundations for corporate sustainability and responsibility. Although this concept is still evolving, the debate among academic commentators is slowly but surely raising awareness that are needed to deliver strategic results that create value for businesses, society and the environment.

References

Camilleri MA (2017) Corporate sustainability, social responsibility and environmental management: an introduction to theory and practice with case studies. Springer, Heidelberg, Germany

Lozano R (2015) A holistic perspective on corporate sustainability drivers. Corp Soc Responsib Environ Manag 22(1): 32-44.

 

How to Cite: Camilleri, M.A. (2017) Corporate Sustainability and Responsibility: Creating Value for Business, Society and the Environment. Asian Journal of Sustainability and Social Responsibility. 1-16. DOI: 10.1186/s41180-017-0016-5

 

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A Conceptual Model of Corporate Sustainability and Responsibility

The corporate sustainability and responsibility concept is linked to improvements to the companies’ internal processes, including; environmental management, human resource management, operations management and marketing (Porter & Kramer, 2011; Fombrun, 2005; Maignan & Ferrell, 2004). At the same time, it raises awareness on the businesses’ responsible behaviours toward stakeholders, including the government, suppliers, customers and the community, among others (Carroll & Shabana, 2010; Freeman, 1984). The fundamental motivation behind this approach is the view that creating connections between stakeholders in the value chain will open-up unseen opportunities for the competitive advantage of responsible businesses, as illustrated here:

(Camilleri, 2017a)

Corporate sustainability and responsibility focuses on exploiting opportunities that reconcile differing stakeholder demands as many corporations out there are investing in corporate sustainability and responsible business practices (Camilleri , 2017b). Their active engagement with multiple stakeholders (both internal and external stakeholders) will ultimately create synergistic value for all (Camilleri, 2017a).

Multinational organizations are under increased pressures from stakeholders (particularly customers and consumer associations) to revisit their numerous processes in their value chain activities. Each stage of the company’s production process, from the supply chain to the transformation of resources could add value to their businesses’ operational costs as they produce end-products. However, the businesses are always expected to be responsible in their internal processes, toward their employees or toward their suppliers’ labour force. Therefore, this corporate sustainability and responsibility perspective demands that businesses create economic and societal value by re-aligning their corporate objectives with stakeholder management and environmental responsibility. In sum, corporate sustainability and responsibility may only happen when companies demonstrate their genuine willingness to add corporate responsible dimensions and stakeholder engagement to their value propositions. This occurs when businesses opt for responsible managerial practices that are integral to their overall corporate strategy. These strategic behaviours create opportunities for them to improve the well-being of stakeholders as they reduce negative externalities on the environment.  The negative externalities can be eliminated by developing integrated approaches that are driven by ethical and sustainability principles. Very often, multinational businesses are in a position to mitigate risk and to avoid inconveniences to third parties. For instance, major accidents including BP’s Deep Horizon oil spill in 2010; or the collapse of Primark’s Rana Plaza factory in Bangladesh, back in 2013 could have been prevented if the big businesses were responsible beforehand.

In conclusion, the corporate sustainability and responsibility construct is about embedding sustainability and responsibility by seeking out and connecting with the stakeholders’ varied interests. As firms reap profits and grow, there is a possibility that they generate virtuous circles of positive multiplier effects (Camilleri, 2017a). Therefore, corporate sustainability and responsibility can be considered as strategic in its intents and purposes. Indeed, the businesses are capable of being socially and environmentally responsible ‘citizens’ as they are doing well, economically. This contribution explains the foundations for corporate sustainability and responsibility. Although this concept is still evolving; the debate among academic commentators is slowly but surely raising awareness on responsible managerial practices and on the skills and competences that are needed to deliver strategic results that create value for businesses, society and the environment.

References:

Camilleri, M.A. (2017a) Corporate Sustainability, Social Responsibility and Environmental Management: An Introduction to Theory and Practice with Case Studies. Springer, Heidelberg, Germany. http://www.springer.com/us/book/9783319468488

Camilleri, M.A. (Ed.) (2017b) CSR 2.0 and the New Era of Corporate Citizenship. IGI Global, Hershey, USA. ISBN13: 9781522518426 DOI: 10.4018/978-1-5225-1842-6 http://www.igi-global.com/book/csr-new-era-corporate-citizenship/166426

Carroll, A. B., & Shabana, K. M. (2010). The business case for corporate social responsibility: A review of concepts, research and practice. International journal of management reviews, 12(1), 85-105.

Fombrun, C. J. (2005). A world of reputation research, analysis and thinking—building corporate reputation through CSR initiatives: evolving standards. Corporate Reputation Review, 8(1), 7-12.

Freeman, R.E. (1984). Strategic Management: A stakeholder approach. Pitman, Boston, MA. USA.

Maignan, I., & Ferrell, O. C. (2004). Corporate social responsibility and marketing: An integrative framework. Journal of the Academy of Marketing science, 32(1), 3-19.

Porter, M. E. & Kramer, M. R., (2011). Creating shared value. Harvard business review, 89 (1/2), 62-77.

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About Mark Anthony Camilleri, the Author of Springer’s Corporate Sustainability, Social Responsibility and Environmental Management

The University of Malta’s promising academic, Dr Mark Anthony CAMILLERI lectures in an international masters programme run by the University of Malta in collaboration with King’s College, University of London. Mark specialises in strategic management, marketing, research and evaluation. He successfully finalised his PhD (Management) in three years time at the University of Edinburgh in Scotland – where he was also nominated for his “Excellence in Teaching”. During the past years, Mark taught business subjects at under-graduate, vocational and post-graduate levels in Hong Kong, Malta and the UK.

Dr Camilleri has published his research in reputable peer-reviewed journals. He is a member on the editorial board of Springer’s International Journal of Corporate Social Responsibility and Inderscience’s International Journal of Responsible Management in Emerging Economies. He is a frequent speaker and reviewer at the American Marketing Association’s (AMA) Marketing & Public Policy conference, in the Academy of International Business (AIB) and in the Academy of Management’s (AoM) annual gatherings. Mark is also a member of the academic advisory committee in the Global Corporate Governance Institute (USA).

Dr Camilleri’s first book, entitled; “Creating Shared Value through Strategic CSR in Tourism” (2013) was published in Germany. This year Springer will publish his latest book; “Corporate Sustainability, Social Responsibility and Environmental Management: An Introduction to Theory and Practice with Case Studies” (2017). Moreover, he edited a U.S. publication, entitled; “CSR 2.0 and the New Era of Corporate Citizenship” (2017). His short contributions are often featured in popular media outlets such as the Times of Malta, Business2Community, Social Media Today, Triple Pundit, CSRwire and the Shared Value Initiative.

Mark’s professional experience spans from project management, strategic management, business planning (including market research), management information systems (MIS), customer relationship and database marketing to public relations, marketing communications, branding and reputation management (using both conventional tools and digital marketing).

His latest book can be purchased from https://www.amazon.co.uk/Corporate-Sustainability-Responsibility-Environmental-Management/dp/3319468480 or http://www.springer.com/gb/book/9783319468488

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Stakeholder engagement for corporate citizenship (in the U.S.A.)

thm3rqcunjThe US government agencies and the bureaus regulatory policies and principles are creating both challenging opportunities and threats for the businesses. Evidently, the institutional legacies are affecting the ways in which civil society, industry and NGOs interact together (Camilleri, 2015). This reasoning echoes the legitimacy theory as heterogenous, competing groups of stakeholders often expect and solicit social and environmentally responsible behaviours from businesses. Debatably, the U.S. government and its agencies should ensure that the true ecological cost of environmental degradation and climate change is felt in the market. In this light, there may be scope for U.S.  authorities to promote responsible behaviors.

 

For instance, recently there is an increased awareness on the circular economies that are characterised by their resource efficiency levels and cleaner production through recycling, reducing and reusing materials (EU, 2015; Geng, Fu, Sarkis and Xue, 2012; Geng and Doberstein, 2008).

US corporations should be urged to find alternative ways for sustainable energy generation, energy and water conservation, environmental protection and greener transportation systems. This way, they will be considered as legitimate businesses; as their corporate performance matches their stakeholders’ expectations (Camilleri, 2016; 2015). The organisations’ implementation of their legitimation strategy could include voluntary and solicited CSR disclosures that address norms, values or beliefs of stakeholders (Reverte, 2009). Responsible companies could be in a position to prevent third-party pressures through their engagement in social responsibility practices and sustainable behaviours. At the same time, they could lower the criticisms from the public and minimise their legal cases through their active compliance with regulations and guiding principles.

The organisations’ legitimacy is a critical driver for a dynamic institutional and organisational change (Tost, 2011). The organisations’ evaluative process was also suggested by Scherer et al. (2013) as they discussed about the corporations’ isomorphic adaptation to societal pressures. Yet, such political perspectives have often been considered as being overly normative (Kuhn and Deetz, 2008; Scherer and Palazzo, 2007) and of neglecting the complexity of the debates between corporations and society. Baur and Arenas (2014) also noted that the regulated interactions and the consensus building may not be required if corporations address the sustainable development issues. However, the responsible behavioural issues often call for the re-negotiation of social, economic, and environmental factors among regulatory authorities and other interested parties.

Indeed, addressing the environmental protection often requires shifting through a multitude of complex and often contradictory demands of stakeholders (Camilleri, 2015; Freeman, 2010; Hardy & Phillips, 1998) that are defined beyond nation-state governance institutions. Multiple ethical systems, cultural backgrounds, and rules of behaviour could possibly coexist within the same communities (Scherer & Palazzo, 2007) as the legitimacy of the business community around sustainable development issues is often being challenged (Porter & Kramer, 2011; Scherer & Palazzo, 2011).

Therefore, the stakeholder engagement processes are important instruments for legitimacy building as the pluralist nature of US politics encourages the formation of lobby groups and associations that are often regarded as legitimate representatives (Camilleri, 2016; Doh and Guay, 2006). Other previous research also contended that the legitimacy in resolving social responsibility and sustainable development issues often requires ‘the ability to establish trust-based collaborative relationships with a wide variety of stakeholders especially those with non-economic goals (Sharma & Vredenburg, 1998, p. 735). These stakeholders may have an accepted role in influencing the public policy process.

 

Excerpt from: Camilleri, M.A. (2016) Corporate Citizenship and Social Responsibility Policies in the United States of America. Sustainability Accounting, Management and Policy (Forthcoming)

References

Baur, D. and Arenas, D. (2014), “The value of unregulated business-NGO interaction a deliberative perspective”, Business & Society, Vol. 53 No 2, pp. 157-186.
Camilleri, M..A. (2015), “Valuing Stakeholder Engagement and Sustainability Reporting”, Corporate Reputation Review, Vol. 18 No. 3, pp. 210-222.
Camilleri, M. A. (2016), “Corporate sustainability and responsibility toward education”, Journal of Global Responsibility, Vol. 7, No 1.
Doh, J.P. and Guay, T.R. (2006), “Corporate social responsibility, public policy, and NGO activism in Europe and the United States: An Institutional‐Stakeholder perspective”, Journal of Management Studies, Vol. 43 No. 1, pp. 47-73.
E.U. (2015), “Research and Innovation Industry 2020 in the Circular Economy” (Call identifier: H2020-IND-CE-2016-17. http://ec.europa.eu/research/participants/portal/desktop/en/opportunities/h2020/calls/h2020-ind-ce-2016-17.html#c,topics=callIdentifier/t/H2020-IND-CE-2016-17/1/1/1&callStatus/t/Forthcoming/1/1/0&callStatus/t/Open/1/1/0&callStatus/t/Closed/1/1/0
Freeman, R. E. (2010), “Strategic management: A stakeholder approach”, Cambridge University Press, Cambridge, UK.
Geng, Y. and Doberstein, B. (2008), “Developing the circular economy in China: Challenges and opportunities for achieving’leapfrog development”, The International Journal of Sustainable Development & World Ecology, Vol. 15 No 3, pp. 231-239.
Geng, Y., Fu, J., Sarkis, J. and Xue, B. (2012), “Towards a national circular economy indicator system in China: an evaluation and critical analysis”, Journal of Cleaner Production, Vol. 23 No 1, pp. 216-224.
Hardy, C. and Phillips, N. (1998). “Strategies of engagement: Lessons from the critical examination of collaboration and conflict in an interorganizational domain”, Organization science, Vol. 9 No. 2, pp. 217-230.
Kuhn, T. and Deetz, S. (2008), “Critical theory and corporate social responsibility: Can/should we get beyond cynical reasoning”, In Crane, A., McWilliams, A., Matten, D., Moon, J. and Siegel, D., The Oxford handbook of corporate social responsibility, pp. 173-196.
Porter, M.E. and Kramer, M.R. (2011). “Creating shared value: How to reinvent capitalism and unleash a wave of innovation and growth”, Harvard Business Review, Vol. 89 Nos. 1-2, pp. 62–77.
Reverte, C. (2009), “Determinants of corporate social responsibility disclosure ratings by Spanish listed firms”, Journal of Business Ethics, Vol. 88 No. 2, pp. 351-366.
Sharma, S. and Vredenburg, H. (1998), “Proactive corporate environmental strategy and the development of competitively valuable organizational capabilities”, Strategic Management Journal, Vol. 19 No. 8, pp. 729-753.
Scherer, A. G. and Palazzo, G. (2007), “Toward a political conception of corporate responsibility: Business and society seen from a Habermasian perspective”, Academy of Management Review, Vol. 32 No.4, pp. 1096-1120.
Scherer, A. G. and Palazzo, G. (2011). “The new political role of business in a globalized world: A review of a new perspective on CSR and its implications for the firm, governance, and democracy”, Journal of Management Studies, Vol. 48 No. 4, pp. 899-931.
Tost, L.P. (2011), “An integrative model of legitimacy judgments”, Academy of Management Review, Vol. 36 No. 4, pp. 686-710.

 

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Measuring Corporate Citizenship

corpcitizenship

Several empirical studies have explored the respondents’ attitudes and perceptions on corporate social responsibilities. Very often, the measurement of corporate citizenship could have involved quantitative analyses on organisational commitment toward responsible organisational behaviours (Maignan, Ferrell and Hult, 1999; Aupperle, Carroll and Hatfield, 1985). Therefore, their survey responses could not have revealed and explained actual corporate citizenship practices. Other research could have focused on investigations of managerial perceptions of corporate citizenship rather than focusing on corporate behaviours (e.g., Basu and Palazzo, 2008; Singhapakdi, Kraft, Vitell and Rallapalli, 1995). A number of similar studies have gauged corporate citizenship by adopting Fortune’s reputation index (Fryxell and Wang, 1994; Griffin and Mahon, 1997; Stanwick and Stanwick, 1998), the KLD index (Fombrun, 1998; Griffin and Mahon, 1997) or Van Riel and Fombrun’s (2007) Reptrak. Such measures require executives to assess the extent to which their company behaves responsibly toward the environment and the community (Fryxell and Wang, 1994). Despite their wide usage in past research, the appropriateness of these indices remains doubtful. For instance, Fortune’s reputation index failed to account for the multi-dimensionality of the corporate citizenship construct and is suspected to be more significant of management quality than of corporate citizenship (Waddock and Graves, 1997). Fortune’s past index suffered from the fact that its items were not based on theoretical arguments as they did not appropriately represent the economic, legal, ethical, and discretionary dimensions of the corporate citizenship construct. Hunt, Wood and Chonko’s (1989) investigated broad based perceptions on (a) the extent to which employees perceive that managers are acting ethically in their organisations (b) the extent to which employees perceive that their managers are concerned about the issues of ethics in their organisations and (c) the extent to which employees perceive that ethical (or unethical) behaviour is rewarded (or punished) in their organisation. Other authors, including Webb, Mohr and Harris (2008) also explored the philanthropic values that were related socially responsible consumption.

Pinkston and Carroll (1994) identified four dimensions of corporate citizenship, including; orientations, stakeholders, issues, and decision-making autonomy. They argued that by observing orientations, one may better understand the inclinations or posturing behaviours of organisations with respect to corporate citizenship. The stakeholder dimension should better define to whom the organisation feels responsible as it could identify where the corporate citizenship issues or social concerns are originating. The aspect of decision-making autonomy was believed to illuminate the perceived importance of corporate citizenship as one that determines at what organisational level corporate citizenship decisions are actually made. In a similar vein, Griffin and Mahon (1997) combined four estimates of corporate citizenship: the Fortune reputation index, the KLD index, the Toxic Release Inventory (TRI), and the rankings provided in the Directory of Corporate Philanthropy. They admitted that their four measures do not necessarily track one another. Such findings suggest that these indicators may not be representative of the same underlying construct and their items may not be sufficient to provide an overall understanding of corporate citizenship.

Singh, De los Salmones Sanchez and Rodriguez del Bosque (2007) adopted a multi- dimensional perspective on three domains, including; commercial responsibility, ethical responsibility and social responsibility. Firstly, they proposed that commercial responsibility of businesses relates to their continuous development of high quality products and truthful marketing communications of their products’ attributes and features among customers. Secondly, they maintained that ethical responsibility is concerned with businesses fulfilling their obligations toward their shareholders, suppliers, distributors and other agents with whom they make their dealings. Singh et al. (2007) argued that ethical responsibility involves the respect for the human rights and norms that are defined in the law when carrying out business activities. They hinted that respecting ethical principles in business relationships has more priority over achieving superior economic performance. Their other domain, the social responsibility is concerned about laudable behaviours. The authors suggest that businesses could allocate part of their budget to the natural environment, philanthropy, or toward social works that favoured the most vulnerable in society. This perspective supports the development of financing social and/or cultural activities and is also concerned with improving societal well-being.

 

References

Aupperle, K. E., Carroll, A. B., & Hatfield, J. D. (1985). An empirical examination of the relationship between corporate social responsibility and profitability. Academy of Management Journal, 28(2), 446-463.

Basu, K., & Palazzo, G. (2008). Corporate social responsibility: A process model of sensemaking. Academy of Management Review, 33(1), 122-136.

Fombrun, C. J. (1998). Indices of corporate reputation: An analysis of media rankings and social monitors’ ratings. Corporate reputation review, 1(4), 327-340.

Fryxell, G. E., & Wang, J. (1994). The fortune corporate ‘reputation’ index: Reputation for what?. Journal of management, 20(1), 1-14.

Griffin, J. J., & Mahon, J. F. (1997). The corporate social performance and corporate financial performance debate twenty-five years of incomparable research. Business & Society, 36(1), 5-31.

Hunt, S. D., Wood, V. R., & Chonko, L. B. (1989). Corporate ethical values and organizational commitment in marketing. The Journal of Marketing, 79-90.

Maignan, I., Ferrell, O. C., & Hult, G. T. M. (1999). Corporate citizenship: cultural antecedents and business benefits. Journal of the Academy of Marketing Science, 27(4), 455-469.

Pinkston, T. S., & Carroll, A. B. (1994). Corporate citizenship perspectives and foreign direct investment in the US. Journal of Business Ethics, 13(3), 157-169.

Singh, J., & Del Bosque, I. R. (2008). Understanding corporate social responsibility and product perceptions in consumer markets: A cross-cultural evaluation. Journal of Business Ethics, 80(3), 597-611.

Singhapakdi, A., Kraft, K. L., Vitell, S. J., & Rallapalli, K. C. (1995). The perceived importance of ethics and social responsibility on organizational effectiveness: A survey of marketers. Journal of the Academy of Marketing Science, 23(1), 49-56.

Stanwick, P. A., & Stanwick, S. D. (1998). The relationship between corporate social performance, and organizational size, financial performance, and environmental performance: An empirical examination. Journal of Business Ethics, 17(2), 195-204.

Van Riel, C. B., & Fombrun, C. J. (2007). Essentials of corporate communication: Implementing practices for effective reputation management. Routledge.

Waddock, S. A., & Graves, S. B. (1997). The corporate social performance-financial performance link. Strategic management journal, 18(4), 303-319.

Webb, D. J., Mohr, L. A., & Harris, K. E. (2008). A re-examination of socially responsible consumption and its measurement. Journal of Business Research, 61(2), 91-98.

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Top US Corporate Citizenship Issues

In its latest quarterly magazine the Boston College Centre for Corporate Citizenship (BCCC) has reiterated how community involvement activities can contribute to achieve corporate goals – particularly, when they are aligned with the company’s business context and the interests of its stakeholders. Companies are becoming increasingly adept at tying employee volunteer and corporate giving programmes to their business strategy. Interestingly, BCCC (2015) noted that many businesses have proritised community involvement projects, including; K12 education, youth programmes and health and wellness programmes among others. These social issues have featured as the top priorities for businesses, as evidenced in BCCC’s (2015) Table. In 2009 and 2011 the top issues were more focused on environmental matters.

The inclusion of health in the top three social goals implies that lately there is more concern amongst US citizens regarding the rising cost of health care. In 2015, the U.S. has spent 17% of its gross domestic product on health care. This figure is higher than any other developed nation, and is projected to reach nearly 20 percent by 2024.

bccc

Unsurprisingly, science, technology, engineering and math (STEM) education is also an area that is receiving increased investments from business communities. According to BCCC’s (2015) study, nearly 40% of companies are focusing on STEM education in their community involvement programmes. These efforts ensure a future pipeline of talent and skills. In fact, OECD (2014) anticipated that there will be a 17 per cent increase in STEM related jobs between 2014 and 2024 (OECD, 2014).

Arguably, businesses are putting food where their mouth is. As they focus their competences and resources in the areas where they can do the most good, there is potential for them to achieve greater returns on their discretionary investments. At the same time, they close the skill gaps and mismatches in their labour market (Camilleri and Camilleri, 2015).

References:

BCCC (2015). The Corporate Citizen, Issue 14 (Fall 2015) Boston College Center for Corporate Citizenship https://bc-ccc.uberflip.com/i/571714-corporatecitizen-issue14

Camilleri, M.A.  and Camilleri, A. (2015). Education and social cohesion for economic growth, International Journal of Leadership in Education, DOI: 10.1080/13603124.2014.995721

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Social responsibility policies in the USA

 

mapImage by newmediatraffic.com

 

Corporate social responsibility (CSR) initiatives and communicating activities within the areas of philanthropy, stewardship, volunteerism and environmental affairs are not treated as a regulatory compliance issue in the United States of America (USA). Therefore, organisations are not obliged to satisfy their numerous stakeholders’ expectations vis-a-vis their corporate sustainability and responsibility practices. CSR practices are voluntary practices encompassing laudable behaviours that go beyond financial reporting requirements. At the same time, it must be recognised that sustainable and responsible practices are increasingly being embedded into core business functions and corporate decisions, such as supply chain, transportation, engineering and marketing. In this light, this chapter sheds light on major US institutional frameworks that have been purposely developed to foster CSR engagement among organisations. Policies, principles and voluntary instruments include formal accreditation systems and soft laws that stimulate business to implement and report their CSR-related activities. Several agencies of the US Government are currently employing CSR programmes that are intended to provide guidance in corporate citizenship and human rights; labour and supply chains; anticorruption; energy and the environment; as well as health and social welfare among other issues.

This contribution looks at the US governmental institutions’ processes and their discretionary investments in responsible behaviours, in terms of financial and human resources. It looks at the establishment of particular standards, procedures and expectations. There is a discussion on how US entities have often interpreted their own view on business ethics and corporate citizenship, within the context of their own organisation. Moreover, it contends that there could still be a lack of an appropriate definition which could encapsulate CSR terminology. Arguably, as corporate responsibility becomes more widely understood, accepted and practiced, there could be positive implications for greater convergence of common activities that could be included in corporate responsibility disclosures. In conclusion, this chapter posits that there are indications that US business, industry and governmental organisations are changing their attitudes on CSR, sustainability reporting and corporate governance. It also identifies the drivers and actors that are raising the CSR agenda in the USA.

Excerpt from: “Camilleri, M.A. (2016) A descriptive overview of social responsibility policies in the United States of America. In Idowu, S.O. & Vertigans, S. (eds) CSR in Challenging Times. Springer (Forthcoming)”.

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Environmental, Social and Governance Disclosures in Europe

Excerpt from: Camilleri, M. (2015). Environmental, social and governance disclosures in Europe. Sustainability Accounting, Management and Policy Journal, 6(2). http://www.emeraldinsight.com/doi/abs/10.1108/SAMPJ-10-2014-0065

 

Last year, the European Union (EU) announced its new guidelines on non-financial reporting that will only apply to some large entities with more than 500 employees. This includes listed companies as well as some unlisted companies; such as banks, insurance companies and other companies that are so designated by member states; because of their activities, size or number of employees. There are approximately 6,000 large companies and groups within the EU bloc (EU, 2014).  The most prevalent reporting schemes in the EU were often drawn from; the G3 Guidelines of the Global Reporting Initiative (GRI) and the United Nations Global Compact (UNGC). In addition, several platforms and organisations that promote corporate sustainability reporting have developed partnerships with AccountAbility, OECD, UNEP, Carbon Disclosure Project and with many governments and sector organisations (Van Wensen et al., 2011; Kolk, Levy & Pinkse, 2008).

 

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When one explores the key topics that companies reported on, it transpired that carbon emission disclosures have become quite a common practice (Kolk et al., 2008). Moreover, recently there was an increased awareness on the subject of human rights and the conditions of employment (Lund-Thomsen & Lindgreen, 2013). Curiously, online reporting has offered an opportunity for accountability and transparency as information is easily disseminated to different stakeholders (Zadek, Evans & Pruzan, 2013). This has inevitably led to increased stakeholder engagement, integrated reporting and enhanced external verification systems. This subject has also been reported by Simnett and Huggins (2015), who have also presented a number of interesting research questions which could possibly be addressed through engagement research. At this point in time, stakeholders are considering reporting schemes as a valuable tool that can improve the quality of their reporting, particularly as it enables them to benchmark themselves with other companies (Adams, Muir & Hoque, 2014). The GRI is often regarded as ‘a good starting point’ for this purpose. Moreover, the provision of a UNGC communication on progress is a new global trend that has become quite popular among business and non-profit organisations. Some of the European organisations are gradually disclosing environmental information or certain other key performance indicators that are of a non-financial nature in their reporting (Zadek et al., 2013). Generally, public policies are often viewed as part of the regular framework for social and employment practices. Therefore, a considerable commitment is made by local governments who act as drivers for stakeholder engagement (Albareda, Lozano, Tencati, Middtun & Perrini, 2008).

 

One way to establish a CSR-supporting policy framework is to adopt relevant strategies and actions in this regard. Such frameworks may be relevant for those countries that may not have a long CSR tradition or whose institutions lack accountability and transparency credentials (Zadek et al., 2013). It may appear that EU countries are opting for a mix of voluntary and mandatory measures to improve their ESG disclosure. While all member states have implemented the EU Modernisation Directive, they have done so in different ways. While the Modernisation Directive ensured a minimum level of disclosure, it was in many cases accompanied by intelligent substantive legislation. National governments ought to give guidance or other instruments that support improvements in sustainability reporting. Lately, there was a trend towards the development of regulations that integrate existing international reporting frameworks such as the GRI or the UNGC Communication on Progress. These frameworks require the engagement of relevant stakeholders in order to foster a constructive environment that brings continuous improvements in ESG disclosures. Regular stakeholder engagement as well as strategic communications can bring more responsible organisational behaviours (Camilleri, 2015). Many corporate businesses use non-governmental organisations’ regulatory tools, processes and performance-oriented standards with a focus on issues such as labour standards, human rights, environmental protection, corporate governance and the like. Nowadays, stakeholders, particularly customers expect greater disclosures, accountability and transparency in corporate reports.

 

At the moment, we are witnessing regulatory pressures for mandatory changes in CSR reporting. Of course, firms may respond differently to reporting regulations as there are diverse contexts and realities. In a sense, this paper reiterates Adams et al.’s (2014) arguments as it indicated that ESG disclosures are a function of the level of congruence between the government departments’ regulatory environment and the use of voluntary performance measures. Somehow, EU regulatory pressures are responding to energy crises, human rights matters and are addressing the contentious issues such as resource deficiencies including water shortages. Notwithstanding, big entities are also tackling social and economic issues (e.g. anti-corruption and bribery) as they are implementing certain environmental initiatives (e.g. waste reduction, alternative energy generation, energy and water conservation, environmental protection, sustainable transport et cetera). In this light, there are implications for practitioners and assurance providers of integrated reports, standard setters and regulators (Simnett & Huggins, 2015). Future engagement research can possibly consider how report content and reporting formats, might impact on organisations’ decision making (Correa and Larrinaga, 2015). This paper indicated that practice and policy issues would benefit from additional empirical evidence which analyse how the European disclosure regulations may positively or adversely affect the corporations’ stakeholders.

http://www.emeraldinsight.com/doi/abs/10.1108/SAMPJ-10-2014-0065

 

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Developing Social Marketing Plans

Corporate Social Marketing differs from other marketing activities as it focuses on responsible behaviours that help society and the environment. This contribution suggests that there are many benefits for businesses who carry out laudable initiatives. Social marketing raises the businesses’ profile as it strengthens the brands’ positioning relative to others. It improves the financial performance of firms, especially if it supports the firms’ marketing goals and objectives.

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Of course there may be many cynics among stakeholders (including customers) who view social marketing campaigns as none of your business. Therefore, developing and supporting social marketing campaigns will surely involve more than writing a cheque.

Businesses ought to pick an issue which is closely related to their individual organisation’s core business. The organisation’s resources and the corporate marketing strategies should focus on initiatives that have the potential for long-term sustainability. In addition, every member of staff should be encouraged to engage in socially and environmentally responsible behaviours. Perhaps, there is also scope in forging alliances with the public sector and non-profit organisations. Such external stakeholders can possibly provide relevant expertise, credibility and extended reach into promising customers. For instance, non-governmental organisations can easily identify the needs and wants of the communities around businesses. Finally, strategic marketing entails sequential planning processes which will involve consumer and competitive research as well as the effective utilisation of marketing mix tools.

A cohesive approach is necessary to ensure successful results. Therefore, the following steps and principles are highly commendable for the successful implementation of social marketing plans which will eventually reap fruit in the long term:

  1. Determine a vision for social behaviour: Who is the main sponsor of this concerted effort? What is the purpose of doing this? What social and environmental issue(s) will the plan address and why?
  2. Conduct a situation analysis, which triggers a SWOT analysis: What are the internal strengths and weaknesses? What are the external opportunities and threats?
  3. Segmenting target audiences: Which individuals and/or organisations in the community have the greatest need? Are these potential segments readily accessible?
  4. Set behavioural objectives and change management goals: A key success factor is the setting of specific, measureable, achievable, realistic and timely (SMART) objectives that become the core of campaign effort.
  5. Determine potential pitfalls to behaviour change: Perform a cost-benefit analysis of the desired behaviour. At this stage that it is also necessary to look at the competitors’ behaviours. The target audiences can also change their attitudes and perceptions about products and services over time.
  6. Draft a positioning statement: Are the businesses’ target audiences valuing socially and environmentally responsible behaviour?
  7. Develop the marketing mix, marketing strategies and tactics: Businesses need to respond to the barriers (and motivations) that target audiences may have. Some customers may be sceptical of the businesses real intentions. A few issues to consider in each of the 4Ps include: (i) Product – provide tangible products or services in the social marketing campaign, ones that will add value to the brand. (ii) Price – non-monetary forms of recognition can add value to the exchange transaction.(iii) Place – look for ways to enhance the distribution of the product (or service) by reaching out to the desired target market in a convenient way.    (iv) Promotion – develop marketing communication messages prior to selecting media channels. Messages have to be clear, understandable and relevant to particular target audiences .
  8. Develop a plan for evaluation and monitoring: Evaluation of target segments. Where there any behavioural changes in customers? Is the social marketing campaign successful?
  9. Allocate budgets and find additional funding sources: There may be scope in corporate partnerships (for philanthropy) with all sectors in society: e.g. public agencies, non-profit organisations, foundations and special interest groups.
  10. Complete an implementation plan: A three to five year plan may be required to educate staff, dedicate financial resources for infrastructures, change attitudes and perceptions to support behavioural change.

Also Published by the Times of Malta (18th July 2013)

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