CSR: By the Companies or By an Independent Source?
According to the Harvard Business Review, the main goal of Corporate Social Responsibility, or CSR, is to align a company’s social and environmental activities with its purpose and values. Doing so can improve a company’s image as well as address address the problems of the environment, workers, and people in the surround community that are affected by the company’s activities. However, there is not set definition for what Corporate Social Responsibility is and what it entails. The Harvard Business Review also states that CSR can range from being a side project for companies to appease to consumers and workers worried about sustainability to some incorporating CSR into their very business practices.
From this, determining how successful a company’s CSR strategy would rely on the company’s goals and interests. As cited in an article by Business Daily News, workers are looking for companies that have people, planet, and revenue in mind. If companies keep in mind what workers are looking for, essentially this gets input into their CSR. But, how important is CSR to the public? To consumers? Because as we make a shift into “conscious consumerism” how far are we willing to go to keep corporations accountable for their actions? Even if corporations flaunt their CSR strategies, what is stopping them from just putting up a front to appease people while still doing harmful activities to the environment? Should there be an independent system or institution for CSR — a standardized bottom line of accountability?
Fair Trade Companies
Fair trade is a belief that companies can incorporate into not only their CSR strategies but as a principle to the company as a whole. Companies who do incorporate fair trade into their core beliefs result in a CSR that is essentially built into business practices. The principles of fair trade requires companies to be transparent — to acknowledge and provide how their businesses operate. From farm to factory to working conditions to how sustainable their practices really are. So, not only do fair trade companies gives consumers an outline of their values and beliefs, they also allow the consumers themselves to see how their products are being made and by whom. An important aspect of fair trade is how corporations are encouraged to build a lasting relationship with their producers. By building a relationship rather than just a business partnership, fair trade companies evoke a sense of respect for producers. In addition, this transparency also holds fair trade companies accountable for their impacts on people and the environment.
A great example of a fair trade company is People Tree. On their website, one can easily find their core values and beliefs as well as who produces their products and how their products are produced. They partner with other fair trade groups around the world that endorse sustainability, like growing organic cotton, and help their surrounding communities. For example, the Kumbeshwar Technical School in Nepal that hired women who were denied employment opportunities because of the caste system and taught them artisan skills like knitting. Furthermore, People Tree is the first clothing company in the world to get the World Fair Trade Organization’s Fair Trade product mark.
Incorporating fair trade into company’s values encourages corporate social responsibility in that the values of fair trade become embedded into the company’s business practices. However, not all companies participate in fair trade so each one’s CSR varies. But, because the values in fair trade emphasize social and environmental interests of a company to be aligned, in essence the World Fair Trade Organization is potential model for what an independent CSR institution can look like.
Independent CSR Institutions? What would that look like?
I say that the WFTO is a potential model for what an independent CSR institution can look like because of their brand mark, or seal for companies that do participate in fair trade. What makes the WFTO different from say the United States Department of Agriculture (who can brand items organic in the U.S.) is that the WTFO focuses on how companies operate socially and environmentally. Even though every company should strive for the ideals of fair trade, the reality is that many do not. So, while maybe a bit excessive, having a label for what constitutes as fair trade helps the consumer know which companies have social and environmental interests at heart (alongside profit of course).
That being said, an independent CSR institution would have to lay down a standardized system of accountability that companies would have to adhere to. Which would also mean the involvement of the government to enact laws that companies would have to submit to such CSR institutions. The seal of approval the WTFO gives fair trade companies would only address how consumers can immediately see how fair trade companies are being ethical both to the environment as well as their workers and their workers’ communities. Still, the WTFO has their 10 Principles of Fair Trade that lay down the guidelines and essentially the bottom line of what would constitute a fair trade company. Likewise, an independent CSR institution would have to lay down a set of rules that focus on a company’s responsibility to “people and the planet”.
Problems would come along with setting a standardized set of accountability rules in that some companies may falter from making as much profits they would have been making if not for the independent CSR institution. Even more so, companies may feel like their rights to operate themselves may be violated since the independent CSR institution would be telling them the minimum philanthropy they have to do. Which leads into what companies would think of how much they actually owe to the communities surrounding them. In addition, there would have to be a way to systemize what constitutes as sustainable and ethical.
Corporate Social Responsibility should be more than a side project that companies keep in the pocket and pull out when needed. CSR is a set of ideals that should be incorporated into a company’s values. Having an independent CSR institution would be one way to keep all companies accountable for their actions as well as build a relationship based on respect between the companies and their surrounding communities. Building a systemized way of measuring sustainability and ethical accountability will be difficult, but not impossible. At the very least, building this system for an independent CSR institution is necessary for corporations who want to be given human rights but not responsible for human accountability.