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IBEC | the Irish Business and Employers Confederation
EUROPEAN AND SOCIAL POLICY DIVISION
CORPORATESOCIAL RESPONSIBILITY
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table of contents
FOREWORD ........................................................................................1
1. INTRODUCTION ........................................................................................2
2. EVOLUTION OF CSR.................................................................................4
International activities..................................................................4
1940s-1960s ................... ....................... ...................... .....................4
1960s-1970s......................................................................................4
1980s ...................... ...................... ....................... ...................... .........5
1990s ...................... ...................... ....................... ...................... .........5
21st Century................ ....................... ...................... ....................... ..6
European Activities ..................... ....................... ...................... ......6
European Commission...................................................................7
European Multi-Stakeholder Forum (EMF) ...................... ........8
3. WHAT IS CORPORATE SOCIAL RESPONSIBILITY?..............................9
Defining CSR ...................... ...................... ....................... .................9
Principles of CSR............................................................................10
Individual components of CSR ...................... ....................... .....10
4. BUSINESS CASE FOR CORPORATE SOCIAL RESPONSIBILITY.......12
Corporate Governance ...................... ...................... .....................12
Competitive Advantage..................... ...................... ....................13Corporate Reputation...................................................................13
Investment ...................... ...................... ....................... ...................13
Improving Relationships with Stakeholders ...................... ....13
Cost/Benefit Analysis....... ...................... ....................... ...............14
Positive Public Image....................................................................14
5. INTERNATIONAL INSTRUMENTS AND INITIATIVES ON CSR........15
Governmental and intergovernmental initiatives.......... ......15
Business-led initiatives................................................................18
NGO-led initiatives ...................... ....................... ...................... ...20
6. CSR CASE STUDIES .......................................................................23
IBM Ireland .................... ....................... ...................... ....................23
Vodafone Ireland...........................................................................25
INTEL Ireland .................... ....................... ...................... .................27
Allianz Ireland................................................................................29
7. CONCLUSION.................................................................................31
8. GLOSSARY OF TERMS...................................................................32
9. BIBLIOGRAPHY.............................................................................33
Report Author:
Catherine MaguireSocial Policy Executive
European & Social Policy Division
Telephone: (01) 605 1692
Email: [email protected]
Web: www.ibec.ie
Information Restriction: This informationis issued for information purposes onlyand is restricted to staff of IBEC and topersons in member companies authorisedto receive same. Except for normal reviewpurposes,no part of this report may bereproduced or transmitted in any form orby any means, electronic or mechanical,including photocopying, recording, or byany information storage or retrievalsystem without the prior permission of
the publishers. Copyright IBEC.
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FOREWORD
CORPORATE SOCIAL RESPONSIBILITY
Corporate Social responsibility or CSR as it is known is an important issue for
modern business. The rapid growth of globalisation and the development of
more multi-cultural societies means that the business environment has changed
for everyone.This change brings with it new challenges for companies of everysize and sector.
One of the challenges for Irish business is to understand what CSR is and what it
means for them.There are a range of reports,standards, recommendations and
norms published throughout the world and the various buzz words and acronyms
cause intense confusion. In this publication IBEC seeks to explain in a clear and
unambiguous way what CSR is, where it has come from and to give some practical Irish examples of
good practice in the area. We also explain the various initiatives and where they fit in.
We know that many Irish businesses are engaged in CSR activities,some without using the CSR label.The CSR
concept is a formalisation of social,environmental and ethical practice.Through such a formalisation manycompanies are actively communicating to shareholders, Government, customers, employees and the broader
community about their business values and about how they are contributing to society as a whole.There is no
universal definition of CSR but there is general acceptance that it involves voluntary initiatives and activities by
business.The flexibility of CSR is one of its most attractive features meaning that it can be adapted to suit
individual company size or sector.
Responsible Business is one of IBEC's top policy priorities in our Strategy 2002 - 2005.CSR has an important role to
play in promoting responsible business and we hope that this publication will be of practical assistance to
companies, to stimulate the CSR debate in their business and to help them in devising a suitable strategy to achieve
their aims.The CSR debate will continue, here in Ireland, at European level and Internationally too through the
various institutions currently taking an active interest in this topic. It is important for Irish business to be informedand to participate fully in these debates.
I would like to say a special thank you for the important contribution made to this report by IBEC's CSR Working
Group and also to Vodafone, Allianz,IBM and Intel who kindly assisted us by providing interesting case studies
which give us some practical insights into their approach to CSR.
Maria Cronin
IBEC Director of EU and Social Policy
1
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IBEC 2004 3
and supply chains operate to the same standards
as those the organisation imposes upon itself;
developing measurement systems to monitor
and report on the companys performance against
relevant CSR objectives; and
ensuring the company is not inadvertentlyexposing itself to risk through the poor
management of environmental or social issues
Business in the Community UK (2004, p4) identified
other challenges,such as redundancy and human
rights, ranging from:how companies should behave
when making people redundant to whether they
should enter markets in countries that have poor
human-rights records. These are just some of the
topics that arise in any debate on CSR. If a company
decides to formalise an existing practice or tocommence a new initiative there is also the eventual
challenge of developing its own standard of
performance or choosing between the plethora of
tools and initiatives that are available (see Section 5
for further information on initiatives).
Given the wide variety of issues involved in CSR, this
report aims to provide the reader with a clear picture
of what is involved. The subject is introduced through
a description of the evolution of CSR and a history of
the activities in this area over the past 64 years, witha particular and practical focus on the most recent
developments. The principles that provide a basic
understanding of CSR and its individual aspects are
presented in Section Three. Section Four examines
the business case for CSR and a compendium of 25
CSR instruments and initiatives are explained in
Section Five. A variety of Irish and international case
studies are provided in Section Six, and conclusions
drawn from the report are presented in Section
Seven. Finally, Section Eight provides the reader with
a glossary of terms.
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international activities
As previously mentioned, the origins of CSR can be
traced back to the practices of paternalistic firms
operating in the 18th and 19th centuries. These earlier
forms of CSR were, in the main, nationally inspired
and did not generally incorporate transnational
activities. The international dimensions of activities
inspiring modern CSR did not truly emerge until the
globalisation of business in the 20th century. As the
main driving force behind the creation of modern
CSR, globalisation created new cross-boundary
business structures and operations, increased the
power held by business and consequently created aninternational impetus for the creation of new order in
areas such as labour, the environment, economics,
the community, finance and trade.
1940s-1960s
Following World War 2, governments around the
world agreed that there was a need for international
institutions to be established to create a new type of
international order.(ISO, 2004, p5) The InternationalLabour Organisation (ILO), the United Nations (UN),
the International Monetary Fund (IMF), the World
Trade Organisation (WTO) and the International
Organisation for Standardisation (ISO) were all
established to realise this goal. The establishment of
these institutions formed an infrastructure for global
rule-making through which modern CSR emerged
(ISO, 2004, p7).The goals set by these institutions
with regard to human rights, economics, poverty,
social dialogue, environmental protection, democracy
and trade liberalisation, many of which still apply
today,created a series of guidelines for businesses
and governments to observe,and created a
framework for the emergence of NGOs. The ISO
(2004, p7) also suggests that the concept of CSR hasbecome more prominent as a result of the fact that
the above objectives have not yet been achieved.
1960s-1970s
During the 1960s and 1970s, public concern increased
about the long-term effects of pollution on the
environment and the activities of international
corporations in foreign countries. Friends of the Earth,
Greenpeace,World Wildlife Fund and Amnesty
International, among other environmental and social
NGOs, were founded to campaign against
environmental degradation and the abuse of human
rights, and to lobby governments and business to
take action on these issues.These organisations
played an instrumental role in the development of
legislation, standards and the promotion of social,
environmental,economic and other CSR-related
issues (ISO, 2004). Governments responded to the
NGO campaigns and, in addition to nationalactivities, in 1972 a UN environment programme was
established following a conference on the human
environment. A number of environmental treaties
were also developed.
The alleged abuse of human rights by some
multinational companies operating in developing
countries started to attract increasing attention from
the media and the general public during this period.
While governments put pressure on abusing regimes,
parent companies either individually, or in
IBEC 2004
2. EVOLUTION OF CSR
CORPORATE SOCIAL RESPONSIBILITY
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5
conjunction with other companies, began to
proactively address this issue. One of the first joint
business activities was the endorsement of the
Global Sullivan Principles by a number of companies
who wanted to adopt a stance against the South
African apartheid regime (See Section Five for further
information on these principles).
In addition to heightened awareness amongst the
public regarding the environmental and human
rights practices and activities of multinationals, the
ability of some of these large companies to influence
the landscape within which they operated became a
cause for concern. The OECD Guidelines for
Multinational Enterprises in 1976 and the universally
applicable ILO Tripartite Declaration concerning
Multinational Enterprises and Social Policy in 1977
emerged as a result of this development.
1980s
The 1980s saw the continued development of new
CSR concepts, a surge in activities relating to CSR and
consumer boycotts of certain milk substitute and
petrol products. Alongside this, foreign direct
investment (FDI) and the environment became more
prominent with the emergence of concepts such as
sustainable development (ie, environment, economicand social issues) and corporate ethics. In 1981 the UN
Environmental Programme (UNEP), the International
Union for Conservation of Nature and Natural
Resources (IUCN) and the WWF published the World
Conservation Strategy that established the first
principles and guidelines for conservation and
sustainable development. (This was followed in 1991
by Caring for the Earthwhich set a blueprint for
implementation of the World Conservation Strategy)
(ISO, 2004). In 1982, the United Nations Charter for
Nature was passed and in 1987, a UN Montreal
protocol to phase out the use of ozone depleting
chemicals was signed by 24 countries. In addition, the
UN Brundtland Commission published its report
during this period, Our Common Future, which
developed significant interest in the new concept of
sustainable development.
As international competition for FDI increased in the
1980s, the World Bank encouraged all countries to
develop policies in this area as well as on
privatisation,deregulation, and trade liberalisation
(ISO, 2004). Socially responsible business practices
emerged alongside the development of these
policies. Also during this period, individual aspects of
CSR started to be treated on a collective basis and the
concepts of corporate ethics and reporting emerged
as a result.
1990s
During the 1990s CSR continued to evolve. Increased
attention was given to the CSR-related concepts of
sustainable development,corporate ethics and fair
trade. CSR also emerged as a concept within its own
right. Governments organised a series of world
meetings and conferences to examine this new
concept. This led to the establishment of a range of
working groups,committees, research teams and in
some cases, international laws, agreements anddeclarations. For example, conventions and a
Business Council for Sustainable Development
emerged as a result of the UN Earth Summit in 1992,
and governments pledged to work for full
employment, with quality jobs and respect for the
relevant ILO Conventions (ISO, 2004, p12) at the UN
World Summit for Social Development in 1995.The
Fourth World Conference on Women, also in 1995,
adopted declarations and action plans that called
upon business to address specific social problems.
Corporate ethics emerged as a mainstream business
issue in the 1990s for two main reasons. Firstly, NGOs
and the public made increasing demands on business
for greater accountability and transparency of
practices. Secondly, stringent legislation in the form
of statutory corporate governance standards was
implemented as a direct response to a number of
very high profile corporate scandals in the US. In
addition to the statutory standards,supplementalvoluntary standards,such as the Global Reporting
Initiative (GRI), were developed by a group of
companies and institutions.
The purpose of the standard was to develop and
disseminate globally applicable sustainability
guidelines for reporting on the economic,
environmental and social dimensions of activities,
products or services (See Section Five for further
information on this initiative).
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A range of other tools, codes and standards on every
aspect of CSR were also produced during this period
by business groups,governments and newly
established NGOs (see Section Five). As interest in fair
trade grew, the Ethical Trading Initiative, the Fair
Labour Association, Social Accountability
International and the Fair Trade LabellingOrganisation were set up. Pressure was put on
business during this period to prove that it was
acting responsibility by endorsing and committing
itself to various codes and standards. New
partnerships and dialogue between companies and
their stakeholders were also developed during this
period and that helped in the exchange of new ideas.
21st century
Today, as CSR is becoming recognised as a
mainstream business issue,more tools,codes and
standards continue to be developed. In July 2000, the
UN Global Compact was launched as a voluntary
corporate citizenship initiative for business to
embrace, support and enact a set of core values in
the areas of human rights, labour standards and
environmental practices. Also in 2000, the ILO
published a revision of its Tripartite Declaration of
Principles concerning Multinational organisations
and Social Policy, and the OECD completed a revision
of its Guidelines for Multinational Enterprises. The
UN Sub-Commission on the Promotion and
Protection of Human Rights established a working
group that produced text for Norms on the
Responsibilities of Transnational Corporations and
Other Business Enterprises with Regard to Human
Rights in 2004. This is currently under consideration
and the Office of the High Commissioner for Human
Rights is consulting with all relevant parties. A report
will be presented to the Commission in the 2005session. Finally, in relation to the development of
modern CSR, the importance of the role of the private
sector in contributing to sustainable development
was emphasised at the UN World Summit on
Sustainable Development. Also, in the summer of
2004, the ISO decided to develop a guidance
document on social responsibility (See Section Five
for more information on these tools).
european activities
While CSR continues to evolve and gather momentum
internationally, the Lisbon Summit proved to be the
starting point for the EU debate on CSR. The Manifesto
of Enterprises against Social Exclusion launched by the
President of the European Commission, Jacques Delors,and a group of European companies in 1995 was the
first European-level activity relating directly to CSR. A
European Business Network called CSR Europe was
created on foot of this and was charged with the
promotion of business-to-business dialogue and
exchange of best practices on CSR-related issues.
CSR was then put at the top of the political agenda in
2000 at the European Council in Lisbon. EU Heads of
State and government made a special appeal to
companies sense of social responsibility regardingbest practices for lifelong learning, work organisation,
equal opportunities, social exclusion and sustainable
development. European companies reacted by
acknowledging their social responsibility in a position
paper by the European employers body, UNICE, which
was released later on that year. Entitled Releasing
Europes Employment Potential: Companiesviews on
European Social Policy beyond 2000, the paper
stressed that European companies see themselves as
an integral part of society, and while they consider
profits to be the main goal of the company, it is not itsonly raison dtre. The role of CSR in addressing the
employment and social consequences of economic
and market integration and in adapting working
conditions to the new economy was emphasised at
the European Council in Nice.
In 2001, the role of government in the CSR debate was
alluded to by the European Council in Goteborg. The
Council referred to the involvement of public
authorities in the Sustainable Development Strategy
for Europe as (having) a key role in encouraging aframework to ensure that businesses integrate
environmental and social considerations into their
activities Business should be encouraged to take a
proactive approach to sustainable development in
their operations both within the EU and
elsewhere.(EU Commission, 2001, p6) In addition, in
the Commissions reflections on the White Paper on
Governance in the European Union, they stated that
Corporate Social Responsibility has important
implications for all economic and social actors as well
as for the public authorities, who should take them
into account in determining their own actions.
(EU Commission, 2001)
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european commission
In response to the calls for action, the EU produced a
Green Paper in 2001 called Promoting a European
Framework for Corporate Social Responsibility. The
paper was drawn up to encourage discussion and
views from all the main stakeholders about how tobuild a partnership for the development of a new
framework for the promotion of corporate social
responsibility. (EU Commission, 2001, p24) The
Commission received more than 250 responses but
significant differences were expressed.They were as
follows (EU Commission, 2002, p5):
Enterprises stressed the voluntary nature of CSR, its
integration in the sustainable development context
and that its content should be developed at global
level. Enterprises emphasised there would not beone-size-fits-all solutions. In the view of businesses,
attempts to regulate CSR at EU level would be
counterproductive, because this would stifle
creativity and innovation among enterprises which
drive the successful development of CSR, and could
lead to conflicting priorities for enterprises operating
in different geographical areas.
Trade unions and civil society organisations
emphasised that voluntary initiatives are not
sufficient to protect workers and citizensrights.They advocated a regulatory framework establishing
minimum standards and ensuring a level playing
field. They also insisted that in order to be credible,
CSR practices could not be developed, implemented
and evaluated unilaterally by businesses,but rather
with the involvement of relevant stakeholders. They
also asked for effective mechanisms to ensure a
companys accountability for its social and
environmental impact.
Investors stressed the need to improve disclosureand transparency of companies practices, rating
agenciesmethodology and investment management
of SRI (socially responsible investment) funds and
pension funds.
Consumers organisations underlined the importance
of trustworthy and complete information about the
ethical, social and environmental conditions in which
goods and services are produced and traded to guide
them in their purchase choices.
The European Council, in its Resolution of 3 December
2001,stressed that a European approach to CSR could
complement existing measures at local and national
level, imparting to them an added value, in order to
contribute to the development of CSR. The Council
mentioned that CSR can contribute not only to
encouraging a high level of social cohesion,environmental protection and respect for
fundamental rights, but also to improving
competitiveness in all types of business, from SMEs
to multinationals, and in all sectors of activity.
The Economic and Social Committee highlighted that
the principles of voluntary action and environmental,
economic and social sustainability, together with
guidance from international organisationsexisting
agreements should form a point of reference for
further European initiatives in support of companiesefforts to act in a socially responsible way.
The Committee of the Regions saw the possibility of
providing a framework for raising awareness,
promoting responsible principles and assisting
businesses and public authorities in incorporating
CSR in their activities at European level.
The European Parliament proposed to mainstream
CSR in all areas of EU competence, in particular
regional and social funding, and to create an EU,
multi-stakeholder CSR platform. It called for triple
bottom line reporting by companies on their social
and environmental performance.
In 2002, the Commission presented an EU strategy to
promote CSR, following on the Green Paper
produced in the previous year. Taking all relevant
views into account the Commission proposed to
build its strategy around six principles:
1. recognition of the voluntary nature of CSR;
2. the need for credibility and transparency ofCSR practices;
3. a focus on activities where community
involvement adds value;
4. a balanced and comprehensive approach to CSR,
including economic,social and environmental
issues as well as consumer interests;
5. attention to the needs and characteristics of SMEs;
6. support and compatibility with existing
international agreements and instruments (ILO
core labour standards, OECD guidelines for
multinational enterprises etc.).
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There was a general consensus that the EU should
develop a coherent, balanced and flexible approach to
CSR, encompassing all the relevant issues.There was
also agreement that the approach the Commission
took should concentrate on building on existing
initiatives,act as a catalyst for disseminating
information (awareness raising, exchange of goodpractices, research etc), promote transparency
(through disclosure policies) and credibility of CSR
practices. In addition,there was a general consensus
that dialogue between companies and stakeholders
should be encouraged, and CSR should be integrated
into all EU policies. In addition EU policies should
encourage CSR which should be used to promote
fundamental human and social rights in third world
countries, notably through international organisations
such as the ILO, OECD and also the WTO.
The launch of a Multi-Stakeholder Forum on CSR at
the EU level was one of the main commitments made
by the Commission to achieve its strategic goals.This
commitment was made as the Commission was of
the view thatthe involvement of all affected
stakeholders is key to ensuring acceptance and
credibility of CSR and better compliance with its
principles.(EU Commission, 2002,p22)
european multi-stakeholder forum (emf)
The EMF was launch in October 2002 and it was
charged by the Commission to foster corporate
social responsibility, the CSR EMF shall promote
innovation, transparency and convergence of CSR
practices and instruments through:
Improving knowledge about the relationship
between CSR and sustainable development
(including its impact on competitiveness,socialcohesion and environmental protection) by
facilitating the exchange of experience and good
practices and bringing together existing CSR
instruments and initiatives, with a special emphasis
on SME specific aspects;
Exploring the appropriateness of establishing
common guiding principles for CSR practices and
instruments, taking into account existing EU
initiatives and legislation and internationally agreed
instruments such as OECD Guidelines for
Multinational Enterprises, Council of Europe Social
Charter, ILO core labour conventions and the
International Bill of Human Rights.
The Forum comprised the social partners, business
networks and NGOs. Other EU institutions, in
addition to some other organisations active in the
field of CSR, attended with observer status. The
European Commission chaired the Forum. A
co-ordination committee with representatives from
ETUC (European Trade Union),UNICE, CSR Europe,
Green GB and NGOs co-ordinated the work of the
European Multi-Stakeholder Forum.They also
established and participated in working groups for
four thematic roundtables (see below), and
negotiated the final Forum Report. IBEC tracked this
development and participated in a UNICE CSRWorking Group which was established to gather the
viewpoints of all business organisations around
Europe about CSR and the discussions in the Forum.
This objective was achieved through four
roundtables, which focused on four key themes1:
1. improving knowledge of CSR;
2. fostering CSR among SMEs;
3. diversity, convergence and transparency of CSR
practices and tools;4. development aspects of CSR.
The roundtables completed their work in April 2004
and each produced a report summarising its
activities. A final forum report containing the results
and recommendations of the EMF as well as the
outcomes from each individual roundtable was
submitted to the Commission at the end of June
2004.The EMF concluded the report by inviting the
Commission together with stakeholders, to convene
an initial shared review in two years time of progressmade in relation to the Forums recommendations,
and of the trends, developments and innovations in
CSR. (EMF, 2004, p18)
IBEC 2004
1. Competitiveness, social cohesion,environmental protection, the consumer dimension and the international dimension, including human rights,democratisation and conflict prevention aspects, were also taken into account, as crosscutting issues, by all the roundtables.
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defining csr
Corporate Social Responsibility (CSR) is a fluid
concept and can be described as an amalgamation
of a wide range of interests and activities. As a topic
it is still evolving and it covers a broad range of
issues such as the environment, community
involvement, human rights, diversity, employee
well-being, corporate governance, stakeholder
dialogue and involvement, advertising, supply
chain management, health and safety etc.The
nature, content and degree of complexity of CSR is
also largely company specific and, as it is strongly
linked to developments in society, the meaning andactivities associated with it will change over time.
Consequently, a single, internationally agreed
definition does not exist, nor does agreement on the
range of activities that should be considered as part
of CSR. The following are the broad definitions used
by the main institutions:
The European Commission Green Paper on CSR
attempts to define it as a concept whereby
companies integrate social and environmental
concerns in their business operations and in theirinteractions with their stakeholders on a voluntary
basis. (EU Commission,2002, p7)
The United Nations Conference on Trade and
Development (UNCTAD) defines CSR as
how business enterprises relate to,and impactupon, a societys needs and goals. All societal groups
are expected to perform certain roles and functions
that can change over time with a societys
evolution(UNCTAD, 1999, p1).
The International Organisation of Employers (IOE)
defines CSR as initiatives by companies voluntarily
integrating social and environmental concerns in
their business operations and in their interaction
with their shareholders. (IOE,2003)
Business in the Community Ireland defines CSR as
a complex term but can be summed up in the
concept of sustainable competitive profit
achieving marketplace success with a minimum
effect on the environment and a maximum positive
affect on each company stakeholder. In addition
CSR is about an organisation using its resources to
combat social exclusion and contribute to social
cohesion and recognising the benefits on corporate
reputation in doing so.
Terminology,and a varied use of language also
contribute to the confusion surrounding CSR.
Corporate social responsibility, social responsibility,
corporate responsibility and corporate citizenship
are the four main terms that are used. Despite
the appearance of a varied focus between these
terms, the objectives of each are, ultimately, the
same. CSR incorporates all aspects of the
terminology referred to above.
IBEC 2004
3. WHAT IS CORPORATESOCIAL RESPONSIBILITY?
CORPORATE SOCIAL RESPONSIBILITY
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principles of csr
As previously mentioned, the terms used to describe
CSR can vary. Nonetheless, attempts have been made
at identifying the principles of CSR. The participants
in the European Multi-Stakeholder Forum developed
a basic definition of the principles that they believeconstitute CSR.They are as follows: (European Multi-
Stakeholder Forum report, 2004, p3)
CSR is the voluntary integration of environmental
and social considerations into business operations,
over and above legal requirements and contractual
obligations.CSR is about going beyond these, not
replacing or avoiding them.
The commitment of management in driving
CSR forward is essential.
CSR is about the core business activities of a
company, and while companies are there to make
profits, an approach that integrates environmental
and social considerations and is based on dialogue
with stakeholders is likely to contribute to the
long-term sustainability of business in society.
CSR is one means amongst many for achieving
economic, social and environmental progress,
and for integrating these concerns into
business practice.
The dialogue with relevant stakeholders adds
value to the development of companiesCSR
practices and tools. As employees are an integral
part of a company, it is important to pay particular
attention to the role of employees and their
representatives and dialogue with them.
CSR is complementary to other approaches of
ensuring high environmental and social
performance: there are limits to CSR, and it alone
cannot be expected to ensure environmental and
social improvement, and that it should not be used
to shift public responsibilities to companies.
CSR is an ongoing learning process for companies
and stakeholders. The development of tools and
practices is work in progress. Companies need to
consider their approach carefully and choose tools
that suit their needs and respond well to
stakeholders expectations. They need to refine
and develop their approach over time, responding
to changing circumstances and expectations.Scope for flexibility, innovation and refinement
are important for successful CSR.
Convergence of CSR practices and tools is
occurring on a market-led basis through voluntary
bottom-up and multi-stakeholder approaches, and
other drivers,and that this can achieve quality and
a good balance between comparability,
consistency and flexibility.
Companies taking a CSR approach, as well as other
organisations, benefit from communicating about
these activities in a transparent and meaningful
way. There are different ways in which this can be
achieved, of which reporting is one. A companys
response to the transparency challenge will depend
on its activities,capacity and the needs of its
stakeholders, which may be difficult to reconcile.
The environmental, social and economic
impacts of a companys activities up and down
its supply chain, as well as in its own operations,
need consideration.
When operating in developing countries and/or
in situations of weak governance, companies
need to take into account the different context
and challenges, including poverty,conflicts,
environment and health issues.
individual componentsof csrThere are a wide variety of CSR activities in which a
company can engage.Those measures which are
adopted can vary, depending on a number of factors
such as the size of the company or the countries in
which it operates. Pressure by Governments, NGOs
and trade unions can also influence the direction the
company eventually decides to take on CSR. Tools and
initiatives can provide companies with some
guidance as to how to approach this topic and
formalise their CSR activities, and some of them can
also provide external verification/certification of CSR
activities if desired.
Even though the list is broad,the following model
designed by Business in the Community UK (2000),
provides an example of the some of the issues that a
formal CSR policy can address.
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IBEC 2004 11
the issues
workplace
Equal opportunities
Workforce diversityWork-life balance
Training and life-long learning
Health and safety
Human Rights
community
Impact of local operations onthe community
Measurement of employee time,management costs, cash andresources donated
Business investment in the community
environment
Environmental management
Impact on environment of coreproducts and services
Emissions to air, land and water
Use of natural resources
Transport impacts
marketplace
Positive/negative impacts on society
of core products and servicesIssues around buying and selling,
pricing etc
Supply chain influence
Customer and supplier complaints
Goods for vulnerable consumers
Advertising and consumer rights
Cause-related marketing (donatingportion of profits from certain product/service revenues to social causes)
Source: Winning with Integrity,Business in the CommunityUK 2000 sourced in A Step by Step Guide to IntegratingCorporate Social Responsibility across your Business
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A strong business case exists for CSR and, over the
past few years, it has emerged as one of the most
important tactics for business survival. It is
acknowledged in research and best practice that thelong-term profits of a company largely depend on
the planning and activities for the future
sustainability of that company. It is also well
documented that there is a direct correlation
between the social, environmental and ethical
practices of a business and sustainability.
Consequently, employers are increasingly recognising
the value of CSR and are reviewing and formalising
their CSR activities to maintain their long-term
prospects and competitiveness in the marketplace.There are a variety of internal and external business
drivers behind CSR that contribute to the well-being
of a business and some of them are listed below.
They have been divided into seven categories in
the model below.
corporate governance
Corporate governance requires compliance with all
relevant laws as a matter of course(as) legal
obligations are requirements, which if not honoured
may result in the company being unable to function
legitimately. (IBEC, 2001, p10) While corporate
governance may be focused on companies statutory
requirements, it also provides a backdrop for CSR, as
it encourages responsible business behaviour as well.
A companys awareness of the impact of its
operations on all of its stakeholders, and a
consequent pursuit of responsible practices, lies at
the heart of CSR.Therefore corporate governancehas an indirect impact and can encourage the
growth of CSR activities in a business.
IBEC 2004
4. BUSINESS CASE FOR CORPORATESOCIAL RESPONSIBILITY
CORPORATE SOCIAL RESPONSIBILITY
CSR
CorporateGovernance Competitive
Advantage
PositivePR image
Improving relationshipswith stakeholdersCost Benefit
Analysis
Investment
Increased ConsumerConfidence
Factors influencing the business case for Corporate Social Responsibility
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competitive advantage
CSR can provide a competitive advantage to a
company, as it can help to meet the emerging
demands of consumers, prospective employees and
investors. Increasingly, companies need to integrate
corporate ethics into their production and marketingmethods and supply chains to remain competitive
and differentiate themselves from their competitors.
Consumers are now purchasing products that are
developed in a way that accords with the values they
hold. The importance of values to the purchasing
power of consumers is evident in the substantial
growth of companies such as the Body Shop and Fair
Trade that integrate CSR into their business through
their supply chain processes and procedures, and
their marketing campaigns.
With the growth of information technology,
highly skilled prospective employees are able to
access a substantial amount of information about
a company quickly and easily through the Internet.
The ethics of a company and the considerations
given by that company to the community and
environment in which it operates can influence the
decision of that person whether or not to apply for
a job with that company.
It has been reported that CSR can decrease long-termrisk for companies, while also enhancing their
reputations. Risk management and reputation
influence investor relations and can increase the
chances of attracting new investors to a company.
Enhanced corporate reputation also affects other
areas of the business (see below).
corporate reputation
The impact of business on society has never beenscrutinised more critically than today. The high profile
corporate scandals of the 1980s and 1990s damaged
public confidence in business and corporate
reputation is now recognised as a valuable
commodity to business. Generally speaking, more
and more companies are now required by their
shareholders to produce social/sustainable reports
alongside their annual reports. In addition, NGOs and
the wider public are now more dubious about the
activities of companies operating in foreign
jurisdictions and as a consequence, they are
monitoring their activities more closely.
The corporate reputation of a company can also
influence brand integrity.Research by Interbrand
found that 96% of Coca Colas stock market value is
in intangibles such as reputation, knowledge and the
brand. (and). Interbrand predict .the intangible
valuation of companies represented by brands will
rise to 45% by 2010. (Grayson et al, 2001)
CSR can help to enhance the reputation of a business
among all its stakeholders by formalising the
activities that the business is conducting in the area
and providing a communications medium that can
be used to promote those activities.
investment
In recent years there has been a growing recognition
that for business to be successful it must have
stability and continuity with its key stakeholders.
The profit margin is no longer the sole indicator of
a lucrative company, as sustainable business has
emerged as another indicator of a good investment.
Investors and analysts are expecting more detailed
information to be provided by the company on non-
financial aspects so they can consider the triple
bottom line and longer-term risk issues of reputation
and risk management.
improving relationshipswith stakeholders
A better working relationship with the community,
shareholders, employees etc., can be a result of
focusing the business on CSR.The integration of
the concept and the language into the day-to-day
exchanges between these parties can help to
increase stakeholdersawareness of the values
of the business and the importance of the linkswith all interested parties.This can result in the
attraction and retention of skilled employees,
increased community support for the business,
increased investment in the company and more
positive publicity.
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cost/benefit analysis
CSR is quite intangible and can, thus, be difficult to
cost. Nonetheless, tangible measurement indicators
can include costs associated with recycling and the
cost to the business of recruitment and retention.
Many businesses have reported that they haveexperienced reduced costs as a result of reducing,
reusing and recycling products.
In addition to the above, if an employee likes where
they work and the values of the company reflect
their own, they will be more likely to remain, thereby
reducing staff turnover and recruitment costs.
positive public image
Increased media attention on abuses of corporate
power has helped to raise public awareness of
corporate behaviour. While CSR is not just a public
relations exercise, the internal and external
promotion of CSR activities can increase the positive
reputation of a business as well as enhancing
communication.The understanding by the media
and other parties about the values of the business
and how it operates can also be increased through
the promotion of CSR activities.
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governmental andintergovernmental
initiatives
OECD GUIDELINES FOR MULTINATIONAL ENTERPRISES
The Guidelines for Multinational Enterprises
(MNEs) are recommendations addressed by 36
Governments (including Ireland) to multinational
enterprises operating in, and from, their countries.
They provide voluntary principles and standards for
responsible business conduct consistent with
applicable laws, and in areas such as product safety,environment,employment and industrial relations,
supply chain responsibilities,science and technology,
taxation and competition.The guidelines aim to
ensure that the operations of these enterprises are
in harmony with government policies, to strengthen
the basis of mutual confidence between enterprises
and the societies in which they operate, to help
improve the foreign investment climate and to
enhance the contribution to sustainable
development made by multinational
enterprises.(OECD, 2000,p 15) Governments of the
36 adhering countries have established a system of
national contact points to promote the observance
of the guidelines by multinational enterprises and
to act as a forum for the discussion of all matters
relating to those guidelines.
The guidelines are part of a broader instrument the
OECD Declaration on International Investment and
Multinational Enterprises.The Declaration promotes
a comprehensive and balanced approach for
governments fair management of FDI and for
corporate responsibility. Even though the guidelines
are directly aimed at multinational enterprises,
they state that domestic enterprises and SMEs
should be subject to the same expectations inrespect of their conduct wherever the guidelines
are relevant (OECD, 2000).
Further information on the OECD Guidelines
for Multinational Enterprises can be found on
www.oecd.org
ILO TRIPARTITE DECLARATION OF PRINCIPLES
CONCERNING MULTINATIONAL ENTERPRISES
AND SOCIAL POLICY
The Tripartite Declaration of Principles Concerning
Multinational Enterprises and Social Policy was
adopted by the ILO in response to concerns about the
activities and conduct of MNEs in host countries.The
aim of the Declaration is to encourage the positive
contribution which multinational enterprises can
make to economic and social progress and to
minimise and resolve the difficulties to which their
various operations may give rise, taking into account
the United Nations resolutions advocating the
establishment of a New International Economic
Order.(ILO, 2001, p2).The principles are voluntary and
were developed to offer guidance to MNEs,
governments,and employers and workers
organisations in such areas as employment, training,
conditions of work and life and industrial relations.
The Declaration reiterates that the principles are a
guide, and are commended to governments,
employers and workers organisations of home and
host countries and to the multinational enterprise
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5. INTERNATIONAL INSTRUMENTSAND INITIATIVES ON CSR
CORPORATE SOCIAL RESPONSIBILITY
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itself.A number of international labour conventions
and recommendations reinforce the provisions of the
Declaration and it is made clear that its provisions
shall not limit or otherwise affect obligations arising
out of any ILO convention (ILO, 2001).
Periodic surveys are conducted to monitor the effect
given to the Declaration by MNEs, governments,and
employersand workers organisations. A summary
and analysis of the replies received are submitted to
the ILO Governing Body for discussion. In the event of
a disagreement over the application of the
Declaration, the parties, using a procedure instituted
in1981, may submit a request to the ILO for an
interpretation of the meaning of its provisions (ILO,
2001). The ILO is of the view that this instrument
provides social policy guidelines in a sensitive and
highly complex area of activities. Adherence to theDeclaration by all concerned would contribute to a
climate more conducive to economic growth and
social development.(ILO, 2001, p5).
Further information on the ILO Tripartite Declaration
of Principles Concerning Multinational Enterprises
and Social Policy can be found on www.ilo.org
THE UN GLOBAL COMPACT
The Global Compact is a voluntary UN initiative by
the UN Secretary-General, Kofi Annan, thatinvites
business to play a role in building the missing social
infrastructure of the new global economy by
improving their own corporate practices.(Annan,
2003) The lead UN agencies involved are the ILO, the
UNEP and the UN High Commissioner for Human
Rights (UNHCHR). The United Nations Development
Programme (UNDP) is also involved in assisting the
agencies in developing country-specific responses
and activities (IOE, 2003). The UN aims to advancecorporate citizenship through this initiative by the
identification and dissemination of good practice
in four areas - human rights, labour, the
environment and corruption.
Launched in January 1999, the Compact is intended
to realise its objectives through promoting the
integration of 10 key principles into the strategies
and operations of private business around the world
and consequently,stimulating action in support of
UN goals. Nine principles were drawn from the
Universal Declaration of Human Rights, the ILO
Fundamental Principles and Rights at Work, the Rio
Declaration on Environment and Development and
the UN Convention against Corruption. During the
first Global Compact Leaders Summit,held on 24
June 2004 at UN Headquarters in New York, the
Secretary-General announced the addition of a tenthprinciple on corruption.The 10 principles are finite
and cannot be extended unilaterally. For more
information see www.unglobalcompact.org):
The Global Compact is not a regulatory instrument
linked with external monitoring or auditing of
company activities. It relies on public accountability,
transparency and for companies to demonstrate to
their employees and communities how they are
being responsible corporate citizens instead (IOE,
2003). By signing up to the Global Compact, acompany states that it is prepared to work towards
the achievement of the objectives of the Global
Compact and to maintain the momentum of
improvement. Companies are also encouraged to
exchange information about the initiatives they used
to translate the Compact and its principles into
business strategies and operations.
Further information on the Global Compact can be
found on www.unglobalcompact.org
UNITED NATIONS (DRAFT) BUSINESS NORMS ON THE
RESPONSIBILITY OF TRANSNATIONAL COMPANIES
The United Nations (Draft) Business Norms on the
Responsibility of Transnational Companies were
adopted by the UN Sub-Commission on the
Promotion and Protection of Human Rights on 13
August 2003. In April 2004, they were then
submitted to the full United Nations Commission on
Human Rights for preliminary consideration. At the60th session on 20 April 2004, the Commission
decided unanimously not to adopt the draft norms as
a legal text and not to permit monitoring of them.
Instead, it requested the Office of the High
Commissioner to compile a report setting out the
scope and legal status of existing initiatives and
standards relating to the responsibility of
transnational corporations and related business
enterprises for consideration by the Commission at
its April 2005 session. The High Commissioner is
currently consulting with stakeholders (including
companies and employersassociations) to hear their
views on these issues.
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The draft norms suggest various social,
environmental and economic obligations for
transnational companies, based mostly on existing
human rights and labour standards. However, it has
been suggested that the norms propose to make
private business, including individuals within a
corporation, liable for human rights violations. Thenorms (www.un.org) specify that:
Businesses must ensure that their impact does
not contribute a violation or work against the
realisation of human rights (including civil, political,
economic, social and cultural rights). Obligations
extend to the security of persons,core labour rights,
legal compliance, curbing corruption, consumer
protection, environmental protection and operations
in conflict zones.
Businesses should establish internal structures and
contract clauses to ensure compliance, and will be
obliged to provide reparations to any party affected
by non-compliance.
States maintain the primary responsibility to protect
and promote international human rights, and shall
create the necessary legal and administrative
framework to ensure implementation.
A compliance-monitoring unit should be established,
possibly by the United Nations.
Further information on the United Nations (Draft)
Business Norms on the Responsibility of Transnational
Companies can be found on www.un.org
UNITED NATIONS ENVIRONMENT PROGRAMME
FINANCIAL INITIATIVE (UNEP FI) STATEMENT ON THE
ENVIRONMENT AND SUSTAINABLE DEVELOPMENT
The UNEP FI was founded by the UN Economics andTrade Unit in 1992 (revised May 1997) to engage
financial institutions in dialogue on sustainable
development. UNEP FI comprises the Financial
Institutions Initiative (FII), for the banking sector, and
the Insurance Industry Initiative (III), for insurers, re-
insurers,pension funds and asset management
concerns.The UNEP FI statement on the environment
and sustainable development commits all signatories
to the integration of environmental considerations
into all aspects of their operations.
UNEP FI and the Global Reporting Initiative (GRI)
have co-convened a working group to complete a
GRI Financial Services Sector Supplement
(Environmental Performance) for the International
Finance Sector. An indicator will be developed to
allow companies to measure the impacts of financial
sector products and services on the environment.This product will be produced after a period of public
consultation in 2004. Guidelines on the needs of
financial institutions in developing countries and
transition economies are also due to be completed
by the end of 2004.
Further information on the UNEP FI initiatives on the
environment and sustainable development can be
found on www.unepfi.net/fii/
US - UK VOLUNTARY PRINCIPLES ON SECURITY
AND HUMAN RIGHTS
In 2000, representatives from the US Department of
State, the UK Foreign and Commonwealth Office; oil,
mining and energy companies, and human rights,
workers and corporate responsibility groups,
developed a set of Voluntary Principles on Security
and Human Rights.These principles are designed to
provide practical guidance to strengthen human
rights in company security arrangements in theextractive (ie, mining) sector. They also form the basis
for a global standard for the sector. The principles are
the first set of guidelines of their sort for this sector.
They address three areas:
1. risk assessment;
2 relations with public security;
3. relations with private security.
Participants involved in this initiative include
Human Rights First, Human Rights Watch,Amnesty
International, International Alert, Chevron,Texaco,
Freeport McMoran, Conoco, Shell, BP, Rio Tinto, Fund
for Peace, Council on Economic Priorities, Business
for Social Responsibility, the International Business
Leaders Forum and the International Federation of
Chemical, Mine and General WorkersUnions.
Further information on the US - UK voluntary
principles on security and human rights can be
found on www.fco.gov.uk
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INTERNATIONAL ORGANIZATION FOR
STANDARDIZATION (ISO) INTERNATIONAL
STANDARD FOR SOCIAL RESPONSIBILITY
The ISO senior management committee decided at
the end of June 2004 to develop an international
standard on social responsibility (SR).The objective is
to produce a guidance document, written in plain
language which is understandable and useable by
non-specialists.Currently, the standard is not
intended to be used in certification or as a
specification document against which conformity is
assessed.
To develop the SR standard, ISO is setting up a new
working group, which will answer directly to ISO's
Technical Management Board (TMB) that oversees
the activities of the organisation's 186 standards-
developing technical subcommittees. ISO formed a
task force to propose the terms of reference and
operating processes for the working group for
consideration at the TMB meeting in September
2004. Following this, the TMB prepared a formal
proposal that ISO undertake the preparation of an
international standard giving guidance on social
responsibility. Member bodies have been invited to
vote on the proposal by 7 January 2005. ISO has
assigned the leadership of the working group that
will develop an international standard to the nationalstandards institutes of Brazil (ABNT) and Sweden
(SIS). It is expected that the standard will be
completed for publication in 2007.
Further information on the ISO Standard for
Social Responsibility can be found on www.iso.org
business-led initiatives
BUSINESS IN THE COMMUNITY (BITC)
Business in the Community Ireland specialises in
corporate responsibility and community involvement.
The overall mission of the organisation is to harness
the power of Irish business to maximise its positive
impact on all its stakeholders. In relation to CSR,
some of the services provided to member companies
include measurement and reporting of their CSR
activities. The organisation also works with public
bodies and the non-governmental sector lobbyingand advocating the benefits of social partnership and
corporate responsibility.
Business in the Community Ireland addresses
corporate responsibility in the workplace,
marketplace, community and environment through
its Corporate Responsibility Policy and Practice
Division. This service promotes the integration of
socially responsible business practices in its member
companies, by supporting them in recognising theextent of their impact on all their stakeholders.
Business in the Community has produced a number of
publications on CSR.They include: A Guide to
Integrating Corporate Social Responsibility Across Your
Business,Winning with Integrity: A guide to social
responsibility Business Impact Task Force. The
organisation has funded studies to highlight
examples of socially responsible policies and practices
in companies of all sizes and sectors in Ireland.
Further information on Business in the Community
Ireland can be found on www.bitc.ie
A Corporate Responsibility Index was launched
by a consortium of 700 companies in the UK arm
of Business in the Community. The index was
launched in response to an identified need on the
part of companies for reliable and standardised
information that would enable a company's
performance to be compared with its competitors.
The Index is a benchmarking tool that evaluates
and compares responsible business behaviour,
corporate responsibility strategy, the integration
of this strategy into the business, the management
of corporate responsibility within the organisation
and performance in a range of social and
environmental impact areas.
Further information on the Corporate Responsibility
Index can be found on www.bitc.org.uk
CAUX PRINCIPLES FOR BUSINESS
The Caux principles were established in 1994 by a
network of business leaders from Japan, Europe and
North America. They provide a guide to companies
to develop,re-examine, implement and monitor
their own internal principles. The key principles
covered include the responsibilities of business, its
economic and societal impact, behaviour, respect
for rules, support for multilateral trade,respect
for the environment,and avoidance of illicit
operations. The general principles can be found on
www.cauxroundtable.org
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THE ETHICAL TRADING INITIATIVE (ETI)
This was established in September 1998 in the UK
and is a formation of companies, NGOs and trade
union organisations.The ETI seeks to promote respect
for the rights of workers producing for the UK
markets and help improve their working conditions
by developing and encouraging the use of widely
endorsed standards, embodied in codes of conduct,
and monitoring and auditing methods.
The ETI has developed a basic code of labour practice
and accompanying principles of implementation for
company performance.Both of these tools were
negotiated and agreed by the founding trade union,
NGO and corporate members of ETI.The code
contains nine clauses that reflect the most relevant
ILO standards with respect to labour practices. When
companies join ETI, they commit to implementing
the code in their supply chains and reporting
annually on their progress in doing so.
Further information on the ETI can be found on
www.ethicaltrade.org
FAIR LABOR ASSOCIATION (FLA)
The Fair Labor Association is a non-profit
organisation established in the US in November1998 (amended October 2001) by the Apparel
Industry Partnership comprising companies,
NGOs and educational institutions. The FLA
Charter has created an industry-wide workplace
code of conduct and monitoring system that
hold companies publicly accountable for their labour
practices.The FLA will accredit the independent
monitors, certify that companies are in compliance
with the code of conduct, and serve as a source
of information for the public.
Further information on the Fair Labor Association
can be found on www.fairlabor.org
WORLD ECONOMIC FORUM (WEF)/CEOS GLOBAL
CORPORATE CITIZENSHIP: THE LEADERSHIP
CHALLENGE FOR CEOS AND BOARDS
A joint statement and framework for action was
issued by the WEF and a number of CEOs in 2002. It
recommends a Framework for Action to be used by
business leaders to develop a strategy for managing
a companys impact on society and its relationships
with stakeholders.The framework contains a
template for a leadership process within companies
and is intended to be complementary to the various
voluntary corporate citizenship principles and
guidelines that have been developed in specific areas.
In most cases, it will include elements of good
corporate governance and ethics; responsibility for
people; responsibility for environmental impact and a
broader contribution to development.
Further information on the World Economic Forum /
CEOs global corporate citizenship challenge can be
found on www.weforum.org
GLOBAL SULLIVAN PRINCIPLES OF
SOCIAL RESPONSIBILITY
In 1977, Reverend Leon Howard Sullivan, the first black
member of the board of the General Motors
Corporation, secured GMs support in the
development of the Sullivan Principles, a code of
conduct for American businesses operating in South
Africa. Reverend Leon Sullivan worked with
multinational enterprises and NGOs to encourage
companies to work towards economic, social and
political justice in all their operations. These
principles were widened for universal application in
1999, and include human rights, equal opportunity,
worker treatment,child labour, forced labour, abuse,
freedom of association, compensation for basicneeds, health and safety, fair competition,community
development, and promotion of principles with
suppliers and contractors. More information on the
Global Sullivan Principals can be found at
www.globalsullivanprincipals.org
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WORLD-WIDE RESPONSIBLE APPAREL
PRODUCTION PRINCIPLES (WRAP)
The American Apparel and Footwear Association
established these principles in 1998 to be core
standards for production facilities participating in
the WRAP Certification Programme.The certification
programme was established to independently
monitor and certify compliance with the socially
responsible global standards for manufacturing,
and ensure that sewn products are produced under
lawful, humane and ethical conditions. Following
the completion of a self-assessment questionnaire,
an accredited independent monitor is employed
to conduct a company audit as part of the overall
compliance-monitoring phase. More detailed
information is available on www.wrapapparel.org
INTERNATIONAL COUNCIL OF TOY INDUSTRIES (ICTI)
The International Council of Toy Industries
launched an ethical auditing initiative in 2002,
called the CARE programme, to independently
monitor manufacturing practices among all
toy manufacturers in a number of areas including
fair pay, decent working conditions, employee
health and safety standards and child labour.
The auditing process was developed by the ToyIndustry Association of the United States (TIA)
and the Toy Industries of Europe (TIE), tested in
China, and then turned over to ICTI.The overall
objective of the initiative is to create a single,
efficient and coherent system for factories that
will have the endorsement of the worlds retailers
and consumers,ensuring that there is uniformity
of standards and auditing practices, as well as
total transparency. The process entails site
inspections to establish if factories are complying
with the code of business conduct of the ICTI.
Since the advent of ethical auditing, an agreement
has been reached on guidelines, and six independent
auditing firms have been chosen to conduct the
work. An oversight committee is to be established to
monitor toy factory compliance with the industrys
code of business practice
Further information on the International Council of
Toy Industries can be found on www.toy-icti.org
ngo-led initiatives
ACCOUNTABILITY 1000
The AccountAbility 1000 framework was adopted in
November 1999 (revised 2002) by the Institute ofSocial and Ethical AccountAbility to improve
accountability and performance by learning through
stakeholder involvement. It is focused on securing
the quality of social and ethical accounting, auditing
and reporting. It does not prescribe what should be
reported on, rather the manner in which it should be
conducted. It is a foundation standard and, as such,
can be used to underpin the quality of specialised
accountability standards and as a stand-alone system
for managing and communicating social and ethical
accountability and performance.
The AA1000 Framework is supported by a series of
specialist modules (AA1000 Series).
Further information on Accountability 1000 can
be found on www.accountability.org.uk
AMNESTY INTERNATIONAL HUMAN RIGHTS
GUIDELINES FOR COMPANIES
Established in September 1998 by the Amnesty
International UK Business Group, these guidelines
comprise an introductory set of human rights
principles and are based on international standards.
They were developed to assist companies in
situations where they must tackle and manage
human rights violations or the potential for such
violations. The key principles covered include; human
rights, security, community engagement,freedom
from discrimination, freedom from slavery, health
and safety,and security management in general.
The guidelines also encourage companies to
promote these standards externally to their
contractors, suppliers or partners and they provide
suggestions to companies on how to promote
human rights internally.
Further information on Amnesty Internationals
human rights guidelines for companies can be
found on www.amnesty.org
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CERES PRINCIPLES
These principles were established in 1989 by over 80
NGOs, environmental, investor and advocacy groups.
The principles establish an environmental ethical
standard, with criteria by which investors and others
can evaluate and review the environmental
performance of companies. Companies that endorse
these principles make a promise to go voluntarily
beyond the requirements of the law, and publicly
assert their belief that corporations have a
responsibility for the environment.
Ceres has also developed a North American/
Canadian Sustainability Reporting Awards
Programme with the Association of Chartered
Certified Accountants (ACCA).The awards
programme rewards best practice in reporting on
sustainability, environmental and social issues and
provides guidance to other entities that are
publishing or intend to publish sustainability reports.
Further information on the Ceres Principles and
Sustainability Reporting Awards Programme can be
found on www.ceres.org
GLOBAL REPORTING INITIATIVE (GRI)
The Global Reporting Initiative was adopted in 1997(revised in June 2000 and again in September 2002)
and is an official collaborating centre of UNEP. The
initiative also works in conjunction with the Global
Compact. It is a partnership comprising NGOs,
corporations, government representatives,
accounting organisations, academics and business
associations. The GRI began as a project of the US
environmental organisation (CERES) and is a
voluntary initiative dedicated to developing and
disseminating globally applicable sustainability
reporting guidelines.The aim of the guidelines is to
provide an internal vehicle for evaluating the
consistency between the organisations economic,
environmental and social policy and its actual
performance. The GRI has developed a series of
reporting principles to achieve this aim. More
information is available at www.globalreporting.org
Social performance indicators for financial
institutions have been set out in a supplement to
the GRI guidelines on sustainability reporting.
The finance supplement suggests that banks and
insurance companies should report on what they are
doing to improve access to financial services for
disadvantaged populations and SMEs, reduce debts
for developing countries, and offer products likely to
appeal to ethical investors. The GRI guidelines also
propose that independent assurance can help to
enhance the credibility of a sustainability report.
Further information on the Global Reporting
Initiative can be found on www.globalreporting.org
ICFTU/ITS BASIC CODE OF LABOUR PRACTICE
This Code was established in 1997 by the
International Confederation of Free Trade
Unions/International Trade Secretariats. The code
aims to promote international standards and the
inclusion of a list of minimum standards addressing
trade union rights and labour practices in codes of
conduct. This basic code is designed to assist any
trade union organisation in negotiations with
companies on labour practice and in working with
NGOs on campaigns involving codes of conduct.
Further information on the ICFTU/ITS basic code of
labour practice can be found on www.itcilo.it
TCCR PRINCIPLES FOR GLOBAL CORPORATE
RESPONSIBILITY: BENCH MARKS FOR MEASURING
BUSINESS PERFORMANCE
These principles were established in 1993 by a
nondenominational alliance of religious groups
the Taskforce on the Churches and Corporate
Responsibility in Britain, the United States and
Canada. The principles are suggested as a means
of developing and monitoring corporate codes of
conduct, particularly when managing relations with
stakeholder bodies and they are also offered to NGOs
(www.web.net/~tccr/benchmarks)
The Principles of Global Responsibility: Bench
Marks for Measuring Business Performance
(referred to as Bench marks) was first published in
1995. The framework was assessed by church
groups, private industry, labour organisations,
womens groups and NGOs, and revised and
re-published. In 1998, the updated text was released
in Canada and internationally.
Further information on the TCCR Principles can be
found on www.web.net/~tccr/benchmarks
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SOCIAL ACCOUNTABILITY 8000 (SA 8000)
Social Accountability International is a US-based non-
profit organisation that aims to improve workplace
conditions through the expansion and further
development of an international workplace standard,
SA8000, and its associated verification system.
Published in 1997 (revised in 2001) by Social
Accountability International, SA8000 has been
developed as a means for retailers, brand companies,
suppliers and other organisations to maintain just
and decent working conditions throughout the
supply chain. (www.sa-intl.org)
Further information on Social Accountability 8000
can be found on www.sa-intl.org
SOCIAL VENTURE NETWORK (SVN) STANDARDS
OF CORPORATE SOCIAL RESPONSIBILITY
The SVN Standards were established in 1999 by
US and European business and social entrepreneurs
and NGOs. Under this initiative, companies are
encouraged to choose parts of a compendium that
they can use to improve social performance and
make continuous improvements that can be applied
to their overall strategies.The standards are not an
implementation model but they describe the
important aspects of CSR, suggest practices and
measures that other companies have used to
measure their social responsibility practices and
they highlight resources for additional information.
The SVN standards are based on nine topics. There
are three general topics: ethics, accountability and
governance- and six topics related to each
stakeholder group;investors, employees,business
partners, customers, community and environment.
Within each standard, the information is organised
into principles, practices, measures and resources.
Further information on the Social Venture Network
Standards of corporate social responsibility can be
found on www.svn.org
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IBEC 2004
ibm ireland
IBM, the information technology company, started
operations in Ireland in 1956. IBM employs in the
region of 3,600 people across all of its operations in
Ireland, making it one of the largest multinational
employers in the country. In addition to a growing
sales and services business serving Irish customers,
IBM has an extensive technology campus and
manufacturing facility based in Mulhuddart on the
outskirts of Dublin, a software development
laboratory, a large telesales and telemarketing centre,
an international financial services solutions centre
and a corporate treasury centre.
AIMS AND OBJECTIVES OF ENGAGING IN CSR
IBMs global CSR Report 2003 What is the value
of a company?and forthcoming 2004 CSR report,
outline and measure IBMs CSR leadership,
innovations and commitments from1913 to the
present day and beyond. Being seen as a great
employer, a trusted corporate citizen and a valued
member of the community have always been
priorities for IBM.This CSR commitment has been
delivered with the same level of passion that isapplied to client service or product innovation. IBM
has many examples of how it constantly strives to
ensure the best possible social and human outcomes
for its employees in the workplace, members of the
wider local and national community (especially those
in more disadvantaged circumstances), for the
environment,and for its clients, suppliers and
business partners in the marketplace.
CSR PROVISIONS AND INITIATIVES IN IBM
In addition to IBMs global corporate instruction on
CSR, each of the pillars of CSR is also guided by a
specific global policy. Among them are corporatepolicies on quality, workforce diversity and
environmental affairs and corporate instructions on
community relations. In turn, every IBM employee is
also required to sign up regularly to the current
Business Conduct guidelines and IBM has a Corporate
Citizen Committee.The Committee comprises 10 Vice
Presidents from across the company. In 2004, the
Committee is focussing on the publication of the IBM
2004 CSR Report as well as participation in the
Global Leadership Network for Corporate Citizenship,which IBM initiated in 2003 and which involves 10
worldwide corporate members and two research
partners. In Ireland, IBM is an active, corporate
founding member of Business in the Community
Ireland B2B (business to business) CSR organisation.
Every IBM facility is actively involved in a wide
programme of CSR activities. Listed below are some
recent examples of CSR best practice and new
initiatives in Ireland.
A strategic, long-term community relationsprogramme that has contributed over $2m/1.6m
in the past 5 years, including the IBM On-Demand
Community Volunteer programme for employees
and retirees established in November 2003. The
IBM KidSmart Early Learning Programme, in
operation since 2000 and the Wired for Learning
schools partnership with the Department of
Education and Science which has been in existence
since 1998,among others.
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6. CSR CASE STUDIES
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Environmental affairs projects include participation
in IBMs worldwide ISO 14001 registration, 2004 site
projects for enhanced access and mobility project for
people with disabilities. As a member of Repak, IBM
recycles 72.6% of all non-hazardous waste at the IBM
Technology Campus, which is well in excess of the
national requirement for recycling of 25% ofpackaging waste.
IBM has a number of workplace diversity and well-
being programmes in place. They include an IBM-
supported childcare facility, various flexible working
options, participation by Irish employees at the first
IBM Europe Gay, Lesbian, Bisexual and Transgender
Empowerment Conference in May 2004 and the
launch of a Diversity Council in Ireland in April 2004.
With regard to the market place, IBM Ireland
participates in the companys worldwide ISO 9901;
2001 quality management system registration. In
addition, a research project on the supply chain,
involving UCD and American universities, has been
initiated as well as customer satisfaction initiatives
and other activities
ATTITUDES AND COMMUNICATION
As part of the IBMs active commitment to being a
leading corporate citizen, the company, both inIreland, and worldwide,has built up a long-standing
reputation for CSR best practice and continuous
innovation. A key element of its strategy is
partnership with all stakeholders. In Ireland, recent
positive recognition which has been a source of pride
to employees has come in the form of:
the Chambers of Commerce Ireland
Presidents Awards for CSR in 2004: citation
and shortlisted for major CSR award to be
announced in November; Guinness Living Dublin Awards 2003: overall
winner and winner of the Business in the
Community category;
Repak 2003 recycling awards: finalists for Best
Company for Best Practice;
CSR Award 2003 from North-side
Partnership (Dublin), recognising in particular
IBMs local contribution to support the
re-training of the unemployed;
Best Companies to Work For 2003:
Excellence in Gender Equality Award.
IBM now issues an annual, global CSR Report that is
available online and in hard copy (online only from
2004) to all internal and external stakeholders.
Within IBM, all employees can access on demand,
up-to-date global and local policy information and
news from across all the CSR disciplines on its
extensive internal intranet. Outside of IBM, thecompany uses the Internet and public relations to
announce major initiatives or news. The company
also participates in business-to-business networks
such as those established by Business in the
Community Ireland (BITC) and has submitted CSR
best practice case studies to publications in 2003
and 2004. IBM also shares its CSR experience at
seminars and conferences such as with the National
Standards Authority of Ireland (NSAI) in November
2003 and the European Conference Boards CSR
meeting in Dublin in June 2004.
EVALUATION AND FUTURE IMPROVEMENTS
IBMs annual global CSR Report uses a number of
CSR measurements, including the Global Reporting
Initiative (GRI) (See Section 5 of this report for an
explanation of the GRI). On the ground, each CSR
discipline and programme features a combination of
measurements, targets and evaluation. The
expansion of existing programmes, modifications
to processes or the introduction of new initiatives isdetermined by feedback from IBMs bi-monthly
anonymous Global Pulseemployee survey that
targets 5% of employees. In addition, information
from customer feedback mechanisms,ongoing
supply chain research, and independent research
evaluations of community and schools programmes
is used. Aggressive recycling targets in addition to
external certifications are also pursued.
Moving forward into 2005, IBM aims to sustain and
develop all projects within its communityprogramme and introduce new ones. It plans to
include even more three-to-six-year-olds from
disadvantaged backgrounds this year in the IBM
KidSmart Early Learning programme.The company
plans to exceed its