Corporate Social Responsibility (CSR)

INTRODUCTION

The corporate world is facing the notion of Corporate Social Responsibility (CSR) wherever it turns these days. On a wide range of issues, corporations are encouraged to behave socially responsibly (Welford and Frost, 2006).

According to Zadek et al. (2007), the basic drivers of CSR consist of:

1. Values: a value shift has taken place within businesses where they not only feel responsibility for wealth creation but also for social and environmental goods.

2. Strategy: being more socially and environmentally responsible is important for the strategic development of a company.

3. Public Pressure: pressure groups, consumers, media, the state and other public bodies are pressing companies to become more socially responsible.

However, in both the corporate and the academic world there is uncertainty as to how CSR should be defined (Dalhsrud, 2006). Some go as far as saying ‘We have looked for a definition and basically there isn’t one’ (Jackson and Hawker, 2001). This is not quite true; the problem is rather that there is an abundance of definitions, which are, according to Van Marrewijk (2003), often biased toward specific interests and thus prevent the development and implementations of the concept.

DEFINITION

CSR is variously defined as:

The continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large (World Business Council for Sustainable Development, 2001).

The European Commission also defines CSR as:

Being socially responsible means not only fulfilling legal expectations, but also going beyond compliance and investing more into human capital, the environment and relations with stakeholders (European Commission, 2001).

Hopkins further noted that:

CSR is concerned with treating the stakeholders of the firm ethically or in a responsible manner. ‘Ethically or Social responsible’ means treating stakeholders in a manner deemed acceptable in civilised societies. Social includes economic responsibility. Stakeholders exist both within a firm and outside. The wider aim of social responsibility is to create higher and higher standards of living, while preserving the profitability of the corporation, for people both within and outside the corporation (Hopkins, 2003).

It is thus worth mentioning that, there is no one definition for CSR (Blyth 2005). Conversely, CSR can best be understood and defined in terms of the changing relationship between business and society (UNIDO, 2002). CSR can be understood in terms of different stakeholders and the issues that they are concerned with. These issues relate to the overlapping spheres of social, environmental and economic impact as illustrated in Figure 1 below. 

                 Figure 1: Mapping CSR: Issues and Stakeholders

                 Source: UNIDO (2002, p.17)

CSR therefore means balancing the interests of a wider group of stakeholders and strategically managing the interconnected social, environmental and economic impacts of business activities.

The FTSE is the Financial Times Stock Exchange and they have put together the FTSE4GOOD Index or List. What that means is that all companies that meet certain corporate social responsibility standards are allowed to be members of that series (FTSE, 2010).Companies are included on the basis of their environmental record, whether they develop positive relationships with their stakeholders and whether they are supporters of universal human rights (ibid.).

According to Cicutti (2010), FTSE4GOOD List is typically used in four ways:

• Investment - a basis for socially responsible financial instruments and fund products.
• Research - a research tool to identify socially responsible companies.
• Reference - a reference tool to provide companies with a transparent and evolving global corporate responsibility standard to aspire to and surpass.
• Benchmarking - a benchmark index to track the performance of socially responsible investment portfolios.

There are many companies around the globe that are listed on the FTSE4GOOD Index. However, with respect to this assignment, the selected company which would be examined based on their excellent demonstration of CSR practice is the Marks and Spencer Group. 

Marks and Spencer (M&S) has always taken responsibilities to customers, employees, partners, suppliers and local communities seriously. Doing business in a responsible way underpins their values - Quality, Service, Innovation and Trust (Marks and Spencer, 2012a).

With its quest to improve upon its CSR practices, Marks and Spencer developed a strategy known as Plan A in January 2007 (Marks and Spencer, 2012b). Through Plan A, the company seeks to work with its customers and suppliers to combat climate change, reduce waste, use sustainable raw materials, trade ethically, and help its customers to lead healthier lifestyles.

This section lists and explains three examples of CSR practices within this company.

ETHICAL TRADING…………………………………………………………………………………..

Marks and Spencer has strong trading relationships across the world. It is a secular organisation embracing all cultures, nationalities, races and religions. It does not support or align itself to any country, Government, political party or religious bodies and this approach is applied consistently to sourcing all of their products (Marks and Spencer, 2012a).

M&S source from over 70 countries worldwide, including China, Honduras, India, Indonesia, Ireland, Israel, Kenya, Morocco, South Africa, Spain, Sri Lanka, Turkey, and the UK. It always clearly labels which country all the products are made in to give customers the opportunity to decide whether or not they want to buy from certain countries.

In 1999, M&S developed a set of Global Sourcing Principles in partnership with their suppliers. These Principles set down their requirements for suppliers to comply with all relevant local and national laws, particularly on: working hours and conditions, health and safety, rates of pay, terms of employment and minimum age of employment ( ibid.).

As well as labelling all of their products with the country of production, many food products have further information about raw materials. This in itself is a unique approach for a large-scale retailer. It means that customers have the necessary information if they want to avoid goods produced in a certain country because of political or social beliefs.

As part of Plan A, M&S have committed to improving the lives of hundreds of thousands of people in their supply chains. M&S is working on the following:

1)  Introducing semi-announced on-site assessments of its suppliers, conducted within a three-week period, to ensure they are working to their Global Sourcing Principles at all times. These on-site assessments will have a greater level of involvement of worker representatives.

2)    Increasing the number of people based in the countries of production to follow up concerns identified by their assessment system within 12 months.

3)    Enabling suppliers to address difficult issues such as '‘living' wage and working hours through collaborative networking, conferences and the launch of an Ethical Exchange website. Setting up best practice projects including at least three Ethical Model Factories and a worker's rights training programme which can be extended across their supply chains (Marks and Spencer, 2012a).

RECYCLING

In partnership with charity organisations such as Oxfam, Marks and Spencer engages its customers in its clothing recycling activity (Marks and Spencer, 2012c). Marks and Spencer, through this strategy, ensures unwanted clothes feel wanted again. Customers are encouraged to send their M&S clothes, shoes and bags they no longer need into Oxfam shops and receive a £5 off voucher when they spend £35 or more on clothing, home and beauty at M&S (ibid.). The company believes that it makes a much greater difference to the consumer to be participating in the Plan A journey rather than just being told about it by the company.

Also, the company donates returned clothing and business surplus to the charity Newlife. Newlife funds medical research, nurse support and awareness campaigns and vital equipment for disabled and terminally ill children. M&S donates returned clothing and business surplus to them and the money raised from the sale and recycling of the garments directly funds 400 pieces of equipment for disabled children each year (Marks and Spencer, 2012a).

HEALTH/FOOD

The debate about the impact of food on health has created high levels of customer interest and media attention. As part of its commitment to improving the health of both customers and employees, Marks and Spencer have reduced salt, fat, and saturated fat levels across its food and continues to make sure it offers healthier alternatives through their “Eat Well” and “Count on Us” offers. The ‘Eat Well’ campaign goes beyond individual fat, salt and sugar ratings and provides an overall indication of whether a product can be considered as a healthier option. Over 1,000 products, nearly 20% of the food lines sold are labelled with the ‘Eat Well’ sunflower logo. The company has also improved labelling to make it easier for customers to eat well, and have trained 1,500 in store Health Advisors to provide customers with advice on healthy living (Marks and Spencer, 2012d).

Marks and Spencer was the first major retailer to meet the salt reduction targets agreed by the British Retail Consortium and are on track to meet the more demanding targets set by the Food Standards Agency (Marks and Spencer, 2006). It has also created a Health and Nutrition website dedicated to providing useful health tips for customers and employees.

Marks & Spencer's also donates its date-expired food to charitable organisations. The first choice to receive the donations is Fare Share, a community food network that redistributes surplus food from the food industry to vulnerable people in the community. The food manager in each local store manages this process (Marks and Spencer, 2012a).

BENEFITS

Marks and Spencer’s Plan A made the business an extra £50m in the 12 months to 31 March 2010. The programme is now five years old and aims to reduce the retailer’s environmental impact while trading ethically and helping consumers become healthier. This involves meeting 180 self-imposed targets by 2015 (Barnett, 2011).

Some of the fabric recycled through Marks and Spencer’s scheme with Oxfam goes back into the supply chain, while handing on old garments gives consumers an incentive to buy new items, along with the voucher rewards that M&S gives out. It is also now a programme that is generating money for M&S, rather than costing it cash. It does this by persuading customers to take positive action. Thus clearly, this kind of consumer involvement will also benefit the retailer.

Plan A has also been a vehicle for moving M&S into new business areas, notably M&S Energy, which now supplies more than 500,000 households. The service offers gas and electricity through Scottish and Southern Energy, and pledges to return one unit of low-carbon hydroelectric energy to the National Grid for every unit used by customers (Barnett, 2011).

Additionally, as a result of the commitment of Marks &Spencer to fulfilling their CSR obligations through their Plan A Strategy, the good reputation of the company has been strengthened over the years. For example, the company was adjudged the Responsible Retailer of the Year 2011 (Marks and Spencer, 2012e). Retailers shortlisted for this award had to demonstrate world class standards of best practice in corporate responsibility but above all show how they have significantly impacted their key stakeholders including employees, suppliers, customers and the community in which it operates.

The judges explained their reasons for presenting M&S with this prestigious award in the following words:

The Judges Panel for the Oracle World Retail Awards was unanimous in selecting Marks and Spencer as the Responsible Retailer of the Year because of the commitment and dynamism of Plan A. It’s a strategy that is involving not just all levels of the business but its customers too and in a way that they could not see being applied so effectively anywhere else in the world. As such the company deserved this accolade (Marks and Spencer, 2012e).

CONCLUSION

Corporate Social Responsibility is an increasingly important part of the business environment. The past twenty years have seen a radical change in the relationship between business and society. As mentioned earlier on, there is no one definition of what it takes to be a responsible corporate. Furthermore, Van Marrewijk has suggested that if CSR is too broadly defined, it will be ‘too vague to be useful in academic debate or in corporate implementation’ (Van Marrewijk 2003). The key is to have a rigorous process for identifying those responsibilities and fulfilling them (Blyth 2005).

Marks & Spencer is on a journey to make their business more sustainable. Over the decades, it has never stood still; moving from philanthropy to community investment and then corporate social responsibility (CSR).

In 2007, the company launched Plan A as a radical commitment to move from the CSR world's focus on specific issues to a more holistic approach that tackled all sustainability issues (Marks and Spencer, 2012a)…………………………………………………………………

With its new Plan A commitments, focused on involving the customers, M&S is putting in place the long term foundations to build a sustainable business.

The brand today is arduously taking care of every sensitive issue of the society be it charity for the society, issue relevant to climatic changes, industrial waste management, sustainable raw material management or health people and ethical trading as evidenced by the discussion above.

REFERENCES

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