Corporate+Social+Responsibility

=Corporate Social Responsibility =

The European Commission defines corporate social responsibility in the following terms:

//“a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis. It is about enterprises deciding to go beyond minimum legal requirements and obligations stemming from collective agreements in order to address societal needs"

// By comparison, Dow Jones offers a different, more corporation- and sustainability centric view on CSR: //

"Corporate Sustainability is a business approach that creates long-term shareholder value by embracing opportunities and managing risks deriving from economic, environmental and social developments."

The societal needs mentioned by the Commission should include the paying of taxes in as a member of society. This falls under the umbrella of corporate citizenship**.**

What should be emphasized in the discussion of CSR is what is referred in the European Commission’s definition as going “beyond the minimum legal requirements”. The responsibility debate takes issue with corporations doing what is right, morally and ethically, not simply stopping short as the legal obligation is fulfilled.
 * Legal requirements **

For instance, in Finland it is a legal requirement for corporations to maximize the wealth of the shareholders. If CSR would divert profits from the owners, the shareholders could sue the management of the company. However, simply aspiring toward profits at the expense of other stakeholders can be frowned upon by society at large.

**Justifications**
Michael Porter has offered four prevailing justifications for CSR: Moral obligation, sustainability, license to operate, reputation. These are all concerned with requirements that serve to ensure that the corporation can continue to operate and deliver value.

Different forms of CSR
CSR is framed in various ways depending on the authors. Some see it as a moral question, some promote the strategic nature of it. A key question is to what extent CSR can be used to promote the business objectives / operational performance of the firm. Porter also mentions the strategic dimension of CSR and how it can be harnessed by the firm.

Stakeholder theory
Stakeholder theory is a central concept within CSR. It essence, it states that the firm should consider not only its shareholders when conducting its business but the stakeholders in and around the corporation's sphere of influence. There are several different classifications for SHT, as listed by Joseph Heath & Wayne Norman :

**Ontological SHT**: " The very purpose of the firm…is to serve as a vehicle for coordinating stakeholder interests." **Strategic SHT**: " A theory about how devoting sufficient resources and managerial attention to stakeholder relations will tend to lead to positive (profitable) outcomes for the corporation." **Deontic SHT**: "A theory that determines the legitimate interests and rights of various stakeholders (presumably going above and beyond their legal rights), and uses these as a way of determining corporate and managerial duties." **SHT of Corporate Law:** "A theory about how traditional corporate law should be amended to reflect the principles and practices favoured by Ontological, Deontic and Governance approaches to SHT. Among other things, such an approach to corporate law would have to shield managers who favour non-profit-maximizing strategies of serving stakeholder interests from the wrath of shareholders and financial markets."

** Triple Bottom Line ** To measure the societal impact of corporations the Triple Bottom Line (TBL) has been suggested. It measures not only a company’s financial performance but also its impact on the society it is a part of and the environment it utilizes. The idea is to approximate the influence of the company upon profits, people, and planet.

CSR is to its nature subjective and ambiguous. A wide array of measures is used and what the responsibilities toward society, the state and stakeholders is, is inherently a philosophical question. The morale responsibility is founded upon //categorical imperative// by Immanuel Kant. It is much easier to measure the negative impacts of e.g. scrupulous environmental actions than the benefits of optimal policies.

It has been argued that as taxes are the foremost tool for a democratic society to distribute wealth among its constituents, and corporations are major contributors to the tax revenue, how and to where (country-by-country reporting) should be included in the CSR reports published by the companies.

Part of CSR is also the aspects of sustainability. Be it in relation to a sustainable use of natural resources or that of the labour of human beings, a corporation should design its actions in a way that does not leave an irreversible scar on the input factors its uses in its operations.