Conceptual Clarity of CSR &

Sustainability Related Terms1

1
Meena Galliara, Collated from Secondary Sources
 Corporate Philanthropy
Corporate philanthropy is a company’s way of giving back to its community -- local, regional,
national or international -- through financial donations and non-cash contributions such as time,
expertise and tangible goods like computers, medicine, food and textbooks. Companies can donate
to charities and nonprofits by giving directly from the company’s cash or assets, fundraising
through its employees and fundraising from others. Corporate Philanthropy can be altruistic (not
expecting any returns) or strategic (expecting some tangible or non-tangible returns). Strategic
philanthropy, is defined as the combination of a corporation’s core competencies with its charitable
efforts in order to improve the corporation’s business environment while meeting social needs that
promote human rights. For example: Fertilizer companies contributing to farmer’s health care
needs or Automobile company providing driver training skills to underprivileged youth as part of
its community development activity.

CSR & Sustainability

Internationally the term Corporate social responsibility (CSR) & Sustainability is used
interchangeably. However there is a small difference.
Corporate social responsibility
Corporate social responsibility not only deals with corporate philanthropy but also other issues
that affect the environment, consumers, human rights, supply-chain sustainability and
transparency for the greater good of the world at large. Businesses that integrate social
responsibility into their missions acknowledge that their business processes have an impact beyond
the company. Therefore, they address issues like philanthropy, environmental-impact assessments
and providing good working conditions, among others, to try to better their communities or
diminish potential harm, such as greenhouse gas emitted from their manufacturing plants. CSR
mainly deals with current responsibilities towards different stakeholders undertaken by the
company.

Sustainability

Sustainability is concerned with preserving resources and operating in a way that is conducive
to long-term trading. In 1987, the World Commission on Environment and Development (WCED)
published Our Common Future, which defined sustainable development as development that
"meets the needs of the present without compromising the ability of future generations to meet
their own needs." This ethic is almost indisputable. Expressed in this way, sustainability balances
resource usage and supplies over time. In other words, sustainability assures intergenerational
equity. When the resources we actually use match the earth's capacity to regenerate adequate future
supply, then our systems remain balanced indefinitely. However, if resources used exceed this
capacity, then current demand is being met by borrowing from the future, which will eventually
lead to an inability to meet society's needs.

The only moral imperative that grounds sustainability is the need to balance the short and long-
term supply and demand of resources. Securing short-term success should never risk long-term
survival.

Business sustainability is the ability of firms to respond to their short-term needs without
compromising the ability to meet future needs. By focusing on the "sustaining" part of
sustainability, businesses can build long-term relationships, innovate enduring designs and invest
in long-lasting infrastructure. Not only will this help firms survive over the long term, it will help
them thrive.

Example: Supply chain management: Ford Motor Company

The car company has established requirements for first-tier suppliers to drive its environmental
and social expectations further down the supply chain and works with suppliers to establish GHG
emission reduction and energy efficiency targets.
Design: Dell
The computer company's integrates alternative, recycled and recyclable materials in its product
and packaging design, improvements in energy efficiency, and design for end-of-life and
recyclability. One of the company's commitments is to reduce the energy intensity of its product
portfolio by 80% by 2020.

Triple Bottom Line & Quadruple Bottom Line

In the sustainability movement over the last several decades there has been a lot of emphasis on
the Triple Bottom Line (TBL). In traditional business accounting the “bottom line” refers to
financial profit and losses. TBL companies consider not only fiscal losses and returns but also the
environmental and social losses and benefits that result from their products and business
operations. TBL companies ask, “How can we minimize the environmental and social damage?”
TBL is most often represented by the terms People Profit and Planet.
More recently there is a growing movement of entrepreneurs asking a different question, which is,
“How can I create or work for a for-profit company that intentionally exists to improve the
environment and all peoples’ lives?” These companies are coming to be known as Quadruple
Bottom Line (QBL) enterprises. They focus on People Profit and Planet, but also add Purpose.
The fourth bottom line provides an opportunity for companies to focus on creating products and
business models that are intentionally designed to improve the health of the planet and community
wellbeing. QBL businesses are purpose-driven, designed not only to make money, but to do so in
a way that benefits the environment and the cultural and spiritual wellbeing of their employees,
customers and communities.
Example: