The definition of CSR given by the European Commission mentions that CSR is 'A concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis.'
The key word in this definition is 'voluntary'. Therefore, companies are not obliged to conduct CSR activities, but they still do it. The reason for why they are investing in such activity, though, is another discussion. Some may say that companies use CSR just to for their own reputation. It is true, but today CSR has developed in such way that it is a matter of competitiveness. Therefore, it has become more than an option, but rather a necessity. Still, not compulsory. And after all, it is a win-win situation. Companies win good reputation, and society is is doing better.
But I believe it has no sense to regulate this activity. Isn't that enough that the evil masterminds of capitalism are paying taxes to the government? And maybe they're not that evil since they voluntarily invest in society's well-being. I don't argue that they are the guarding angels, but rather pragmatic.
I think the core of this controversial discussion is to mentain the boundary between CSR and law abiding activity, which is very blur nowadays. For example, there are laws that limit carbon dioxide emissions, but still companies describe their attempt to reduce their emissions as CSR activity. Maybe this matter should be looked at from a macro-economic perspective. History has demonstrated that after a period of highly deregulated systems which approached perfect capitalism, crises appeared which were followed by the keynesian concept of welfare state. Therefore, CSR was easier to detect in a highly deregulated environment, but today, in the context of globalization and, recently, economic crisis, laws came out that overlap the activity of CSR.
In this case, should the definition be changed?
4 comments:
CSR is a relatively newfangled concept (coming to common use in the 1970s) and really becoming a popular way for companies to rise above their competition in the 21st century.
I believe that the shift of society's priorities on environmental and social issues combined with the transparency and immediacy of new communication methods (i.e. social media) has prompted more and more companies to engage more in CSR.
Perhaps regulating certain issues (as you pointed out CO2 emissions) should be put in practice as a necessity to preserve our environment for example. Being "green" is something companies should strive to be but I believe that without a legal push, most corporations wouldn't make that move.
Maybe that's just the cynic closet hippy in me talking... :)
CSR is starting to lose its significance, because consumers (most specifically the educated) are more skeptical towards CSR activities, more so, because organisation don't live up to the CSR messages.
CSR is not a new concept and it is slowly losing its appeal, just like advertising.
I agree that CSR should not be officially regulated, because as you point out Andra, companies already pay taxes. I think it will be interesting to see how the financial crisis will effect CSR activites and whether, because of a loss in profits, companies will decide to cut their CSR budgets. If this happens it will be interesting to see whether the government then decides to step in and introduce regulatations to make up the gap.
I my opinion it is not possible to regulate CSR projects and frame them in a compulsory law. On the one hand the Commission cannot force companies to engage on helping projects as it cannot be forecast in what extend a CSR projects are successful. And it cannot only be judged in the budget which is spent on it. Perhaps a small financial input helps much more than a huge amount of support.
On the other hand it cannot be stated for which companies CSR regulations should be applicable as this causes a lot of problems. If a company is still in private ownership the juridical frame is another one as for example for a public corporation. And it is not clear if it should affect every single organisation, also so the small ones or only those which have higher sales as a special amount. Thus I think the EU is not in the position yet to regulate CSR.
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