Improving Corporate Philanthropy

How to do corporate responsibility the right way

Corporate social responsibility means that while generating a profit, companies also respect the needs of all partners and counterparts that they are in contact with in their business. These partners include employees, customers, competitors, suppliers, the local community and the environment.

Corporate social responsibility is thus a broad concept that is inevitably connected with the daily operations of the company and its internal and external conduct.  It is also reflected in the development of new products and services.

The idea of the responsibility of a company towards society is also reflected in the usual abbreviation of corporate social responsibility – CSR. However, because of the use of the word social, the meaning of corporate social responsibility has often been reduced to responsibility towards the community – i.e. corporate philanthropy and volunteering. While corporate philanthropy is an integral part of corporate social responsibility, the concept also comprises various other programmes involving the economy (e.g. offering products and services to the disabled), social care (e.g. caring for the work-life balance of employees), and the environment (e.g. reducing energy consumption and CO2 emissions, and the production of eco-friendly products).

Critics of the “reduced” attitude to corporate social responsibility warn that the CSR programmes of many companies have so far mainly concentrated on their reputation and are not directly connected to business.  In 2006, Harvard professors Michael Porter and Mark Kramer presented the Creating Shared Value (CSV) concept, which moved CSR to a new and more pragmatic level.

CSV is based on the idea that the competitiveness of a company is naturally connected to the well-being of the community. The company should therefore use its potential to deal with the specific needs of society and base its profitability on that, even if it’s for the long term.

There are economic, social and environmental levels of corporate social responsibility. The economic level concerns access to the market and relationships with customers, suppliers, business partners, competitors, and the state authorities. The social level mainly comprises relationships with employees and the community in which the company is working, as well as supporting projects beneficial for the public. On the environmental level, there is an effort to minimize the negative impact of the company on the environment while maximizing its positive impact.

The basic principles of corporate social responsibility

The market

  • to do business in an ethical and transparent way
  • to improve the quality and safety of products (certifications)
  • to offer innovative products and services with an added social or environmental value
  • to undertake truthful publicity and complete disclosure to customers
  • to promote a fair and partner-like relationship with suppliers and lead them towards corporate social responsibility
  • to undertake a dialogue with partners, and communicate and report about activities that have had an impact on society, the economy and the environment

The environment

  • to save energy, water and heat during operation/production
  • to minimize the production of waste and try to reuse waste
  • to analyse and decrease CO2 emissions to mitigate climate change
  • to offer environmentally-friendly products and services (e.g. production, design, packaging, and transport)
  • to require ecological standards from suppliers as well

Employees

  • to pay attention to the safety and health of employees at work
  • to provide training and development to employees
  • to pay attention to diversity and non-discrimination (equal opportunities) in the workplace
  • to support the balance between the professional and private life of employees (the work-life balance)
  • to undertake dialogue with employees about their expectations and needs, and involve them in company decisions

The community 

  • to support (financially or non-financially) projects that are in the public interest, which are connected with the business activities of the company
  • to build long-term partnerships with selected non-profit organizations with the aim of achieving positive change
  • to support volunteering by employees and their engagement in decisions about the company’s support for projects
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