Introduction
Within the world of business, the main “responsibility” for corporations has historically been to make money and increase shareholder value. In other words, corporate financial responsibility has been the sole bottom line driving force. However, in the last decade, a movement defining broader corporate responsibilities– for the environment, for local communities, for working conditions, and for ethical practices–has gathered momentum and taken hold. This new driving force is known as corporate social responsibility (CSR). CSR is oftentimes also described as the corporate “triple bottom line”–the totality of the corporation’s financial, social, and environmental performance in conducting its business.
As the commercial sector increases its investments in corporate social responsibility in its three usual venues (the workplace, the marketplace, and the community), USAID is presented with the unique opportunity to create corporate partnerships that can help expand, enhance, and sustain its health efforts in developing countries.
The following eight questions and answers provide basic facts for learning about corporate social responsibility, and how it can contribute to furthering USAID's health objectives.
1. What is Corporate Social Responsibility?
While there is no universal definition of corporate social responsibility, it generally refers to transparent business practices that are based on ethical values, compliance with legal requirements, and respect for people, communities, and the environment. Thus, beyond making profits, companies are responsible for the totality of their impact on people and the planet.1 “People” constitute the company’s stakeholders: its employees, customers, business partners, investors, suppliers and vendors, the government, and the community. Increasingly, stakeholders expect that companies should be more environmentally and socially responsible in conducting their business. In the business community, CSR is alternatively referred to as “corporate citizenship,” which essentially means that a company should be a “good neighbor” within its host community.
2. Why do companies decide to get involved in CSR, and how do they benefit?
Today, more and more companies are realizing that in order to stay productive, competitive, and relevant in a rapidly changing business world, they have to become socially responsible. In the last decade, globalization has blurred national borders, and technology has accelerated time and masked distance. Given this sea change in the corporate environment, companies want to increase their ability to manage their profits and risks, and to protect the reputation of their brands. Because of globalization, there is also fierce competition for skilled employees, investors, and consumer loyalty. How a company relates with its workers, its host communities, and the marketplace can greatly contribute to the sustainability of its business success.
3. How many companies are practicing CSR?
There are scores of CSR organizations and business associations promoting corporate social responsibility, with a collective membership of thousands of companies -big, small, and medium-sized – in diverse industries. In the United States, San Francisco-based Business for Social Responsibility alone has 1,400 corporate members that globally employ more than six million workers, and account for a total annual revenue of US$1.5 trillion. In Europe, the London-based International Business Leaders Forum counts 60 major global companies as members, and has established affiliate resource centers in emerging market economies where there is a demand for corporate, involvement in social causes. In developing countries such as India, Indonesia, Brazil, Egypt, and the Philippines, business associations dedicated to CSR exist. It can be said that there are as many variations of CSR activities as there are CSR advocate companies and organizations.
4. What does CSR mean for international health development?
The business community can make tremendous contributions in promoting good health and well being, especially if innovative CSR initiatives are undertaken in partnership with government and civil society. In all but the most remote areas or closed societies, business has massive reach and influence. For decades, business has been engaged in charity, philanthropy, and civic activities including social investments in health.2 However, oftentimes these investments were less than strategic, and were not directed to real social change. Today, business understands that viewed through lenses of “doing well by doing good,” CSR can be a revolutionary way of contributing to systemic social changes in which investments can produce lasting social benefits in the health arena
