Corporate Responsibility - An IntroductionCorporate responsibility is the term used when companies take responsibility for their impacts on the environment and the community as well as on the economy. Companies embracing corporate responsibility take a variety of stakeholders into account when considering their operations, including employees, shareholders, business partners and the wider community.
Corporate Responsibility initiatives are actions taken in relation to investment, governance, the environment, human rights, the community and a company's workforce.
Hard and fast facts about how CR impacts the bottom line are hard to come by, but as commentator Mallen Baker says, that doesn't mean the benefits don't exist.
- Companies that actively manage and measure corporate responsibility outperform their peers on shareholder return by between 3.3% and 7.7% according to Ipsos MORI research conducted for Business in the Community.
- Volunteering Australia research has found that 53% of jobseekers would like to work for a company with a corporate responsibility program, and 25% actively seek companies with such programs;
- researchers for the now-defunct Prime Minister's Community Business Partnerships found that partnerships enhanced staff morale, resulted in a more skilled workforce and access to new markets;
- and a 2007 report by Baker and McKenzie - Corporate Responsibility - A Guide for Australian Directors - found that "ethical or CR conscious investment is likely to play an increasing role in the conduct of companies, especially public companies."
Breaking it down into seven areas can help communicate the breadth of corporate responsibility:
Environmental Sustainability - probably the area of most pressing public concern, also the area with some of the greatest opportunities for action, from switching lights out and computers off to having products certified as Greenhouse Friendly and installing green energy generators.
Human Rights - a broad and complex area of corporate responsibility, this is about companies' ethical obligation to uphold the human rights of others, particularly because employment directly affects people's quality of life.
Community Engagement - enhancing a company's working environment, and sustaining relationships and corporate reputation by working with and supporting the community.
Workforce - making your company a place where people aspire to work by being flexible, promoting work/life balance and behaving ethically towards employees in the knowledge that it will generate productivity and loyalty.
Socially Responsible Investment - investing either directly, by screening out investments in companies with practices you don't want to support, or indirectly, by advising employees about superannuation companies with ethical investment options.
Good Governance - where the board of directors helps structure, support and monitor a company's CR initiatives, and where a company publicly reports on its CR performance.
Addressing Systemic Disadvantage - investing time, resources and support in areas of the community that experience chronic disadvantage.