MAS 4 – GROUP 3

CORPORATE SOCIAL RESPONSIBILITY

A.1 THE CONCEPT OF CORPORATE SOCIAL RESPONSIBILITY

I. What is Corporate Social Responsibility?
 is a management concept where companies integrate social and environmental
concerns in their business operations and interactions with their
stakeholders”.
 Refers to strategies that companies put into action as part of corporate
governance that are designed to ensure the company’s operations are ethical
and beneficial for society.
 The responsibility of the business towards the society.

II. Why does it matter?

 It is a competitive advantage (Harvard Business Review)
 Every company needs “a unique position – doing things differently from
competitors.”
 Philanthropic projects show a particular and distinctive identity.
 Capitalism focused strictly on profit is no longer viable.
 Investors will sever business ties with companies that are caught damaging the
environment or engaging in socially damaging practices.
 It is a moral obligation.
 Domestically – businesses need to give back to the communities and nations
that provided them the opportunity to succeed.
 Globally – economic and security concerns/events can immediately have a
negative global impact. Investing, developing, and doing-no-harm will
strengthen all sectors of business.

III. THE BENEFITS OF CSR

Business Benefits of CSR
In a way, corporate social responsibility can be seen as a public relations effort.
However, it goes beyond that, as corporate social responsibility can also boost a
firm’s competitiveness. The business benefits of corporate social responsibility
include the following:
1. Stronger brand image, recognition, and reputation
- CSR adds value to firms by establishing and maintaining a good corporate
reputation and/or brand equity.
2. Increased customer loyalty and sales
- Customers of a firm that practices CSR feel that they are helping the firm
support good causes.
3. Operational cost savings
- Investing in operational efficiencies results in operational cost savings as well
as reduced environmental impact.
4. Retaining key and talented employees
- Employees often stay longer and are more committed to their firm knowing
that they are working for a business that practices CSR.
5. Easier access to funding
- Many investors are more willing to support a business that practices CSR.
6. Reduced regulatory burden
- Strong relationships with regulatory bodies can help to reduce a firm’s
regulatory burden.

Common Corporate Social Responsibility Initiative

1. Actions to protect the environment.
2. Actions to create a work. Environment that enhances employees’ quality of life.
3. Actions to build a diverse workforce.

IV. EXAMPLES OF CSR IN THE PHILIPPINES

Coca-Cola Philippines - concentrating on the long-term and ensuring that
they develop as a company in the right way through a variety of programs and
projects that help communities and protect the environment.
Jollibee Foundation - aside from education, Jollibee Foundation also
implements programs that addresses initiatives in livelihood, leadership
development and provides assistance in times of calamities.
San Miguel Corporation - focuses on empowering communities and reaching
out to underprivileged sectors of society.
Nestle Philippines - committed to helping communities and nation building
through program that help the underprivileged members of society.

A.2 FOUR TYPES OF CORPORATE SOCIAL RESPONSIBILITY

1. Environmental Responsibility
2. Ethical Responsibility
3. Philanthropic Responsibility
4. Economic Responsibility

1. Environmental Responsibility
 Duty that a business has to perform in a way to keep the environment safe.
 Corporate Environmental Responsibility (CER) concerns the eco-friendly
features of corporate public responsibility

Advantages of Corporate Environmental Responsibility

 Company Image
 Client Reliability
 Diversity

Example of Companies that Practices Corporate Environmental Responsibilities

(CER)
 KPMG
 LEVI’S

2. Ethical Responsibility (What is right, just, fair, expected?)

 Ethical responsibility is concerned with ensuring an organization is operating
in a fair and ethical manner.
  Organizations that embrace ethical responsibility aim to achieve fair
treatment of all stakeholders, including leadership, investors, employees,
suppliers, and customers.

What are the ethical responsibilities of an organization?

A. Responsibility to Employees
As an employer, you have a moral obligation to offer your employees
fair pay and reasonable work expectations, while also providing a safe work
environment.
B. Responsibility to Customers
Providing your customers with good quality at a fair price is both an
ethically and financially responsible path. Whatever product or service
you produce, you should give your customers what you promise.
C. Responsibility to Shareholders and Board of Directors
Your ethical responsibilities are clear. Be honest about how the business is
doing. When will you be able to pay back the note and what can your investor
expect in the way of a return on his investment?
D. Responsibility to Community
Your responsibilities to the community at large may be more nuanced,
but that community remains a relevant and important stakeholder. Of
course, you’ll adhere to the regulations in your city or town but being a good
community member as a business may require more than not polluting
waterways or spewing toxic gases into the air. You may want to give back by
donating to worthy causes or by sponsoring events.

Ethical CSR Company Examples:

1. Starbucks’s Commitment to Ethical Sourcing
2. Cosmetic Company Lush: global campaigning against animal testing and
strong ethical initiatives.
3. Google committed to treating all workers with respect and dignity, ensuring
safe working conditions, and conducting environmentally responsible, ethical
operations.

3. Philanthropic Responsibility
I. Philanthropy
 It refers to charitable acts or other good works that help others or society as a
whole.
 It is an effort an individual or organization undertakes based on an altruistic
desire.
 Philanthropy means literally “love of mankind". It is done by individuals or
businesses to actively make the world and society a better place.

II. Philanthropy in Business

Philanthropic Responsibility
• Corporate philanthropy includes all forms of business giving.
• Corporate philanthropy embraces business’s voluntary or discretionary activities.
• Philanthropic responsibility refers to a business’s aim to actively make the
world and society a better place.
Corporate Philanthropy
- refers to the investments and activities a company voluntarily undertakes to
responsibly manage and account for its impact on society. Today, companies
are expected to help or give back to those communities where they operate and
to organizations which shares the same mission with them.

Investments given by companies through Philanthropic Responsibility are the

following:
1. Money
2. Donations of products
3. In-kind services and technical assistance
4. Employee volunteerism

III. Classifications of Corporate Philanthropy (based on investments)

1. Outsourced CSR” (commonly referred to as “cheque-book philanthropy”)
Cheque book philanthropy is an act of charity where the donor simply
gives their donation, and the communication ends there. They just make
cash contributions to a charity and walk away.

2. In-house projects
The second category relates to in-house projects, where companies
lead their own philanthropic activities. This has the benefit of
corporate control, but limits reach and external credibility.

3. Collaboration between corporations and non-corporate partners

The third category focuses on collaboration between corporations
and non-corporate partners. CSR orthodoxy strongly favors this final
“partnership” approach. These collaborations seek to address societal
issues by combining the resources of all partners to offer what are
frequently described as “mutually beneficial” solutions.

IV. Types of Philanthropic Responsibility

1. Matching Gifts
Companies financially match donations that their employees make
to nonprofit organizations. Companies with matching gift programs
contribute a donation to “match” that of an employee to an eligible
nonprofit. Note that the organizations where the donations will go
should be an accredited non-profit organization. For example, a
company may have a matching gift policy for employees who donate to
their colleges or universities This is the most common form of corporate
giving and can be used to maximize the impact of each donation your
nonprofit receives.

2. Volunteer Grants
Companies provide monetary grants to organizations where employees
regularly volunteer. Volunteer grants are another common type of
 corporate philanthropy. While matched gifts are donated by corporations
when an employee gives to a nonprofit, volunteer grants are contributed
when an employee volunteers for a nonprofit. Emphasis on volunteer, it
is a requisite here. For instance, a corporation might offer to donate $100
per 20 hours an employee volunteers to an eligible nonprofit.

3. Employee & Board Grant Stipends

Corporations award grants to employees and/or public boards to donate
to the nonprofit of their choice. Grant stipends are a set amount of
money that corporations set aside for each of their employees.

4. Community Grants
Company programs award nonprofit organizations that apply for grants
based on defined criteria. Companies, rather than employees, initiate
community grants. Community organizations apply to companies with
such programs in place detailing how the grant would support
their nonprofit missions.

5. Volunteer Support Initiatives

Companies partner their employees with nonprofits to provide specialized
support. Volunteer support initiatives allow companies to partner
with nonprofits to provide material support or specialized services that
only those companies can provide. For instance, a company specializing
in cybersecurity might dispatch employees to rural health center to
ensure that all of the patient data is secured, and all anti-theft software
is installed or updated.

6. Corporate Sponsorships
Companies provide financial support to a nonprofit that in return
acknowledges that the business has supported their activities, programs
or events. Companies frequently provide support via sponsorships to
help support an organization’s mission. Unlike donations, corporate
sponsorship is a mutually symbiotic relationship, so both parties’
benefit from the partnership. This is meant to help one another.

7. Corporate Scholarships
Corporations provide scholarship dollars to universities on behalf of
students seeking support to continue their studies, encouraging
college education and workforce development. Companies develop
scholarship programs for their employees and their families, as well as
for the general public. For instance, The Wal-Mart Associate Scholarship
which is available to their full or part-time employees enrolled in any
university.

V. Importance of Philanthropic Responsibility

1. Benefits for Nonprofits
• 84% of donors say they’re more likely to donate if they know their
company will match their gift.
 • One-third of donors will provide a larger gift to nonprofits if they know
it will be matched by their employer.
• More than 18 million people are eligible for matched gifts via
corporate philanthropy programs.
• 65% of Fortune 500 companies offer matching gift programs for their
employees.
• 12% of corporate contributions to nonprofits are made through
matching gift programs.

2. Benefits for Corporations

• A positive image.
• Better relationships with customers.
• Better engagement from employees.
• Encouraging a feeling of community.
• It attracts and retains investors.

VI. Why Is Social Responsibility Important in Marketing?

- It makes the corporation appealing to its target market.
- It serves as a way to promote the company.
People have become increasingly aware and concerned about social responsibility
when it comes to corporate governance and the behavior of firms. Although an initial
investment may be involved to share profits or donate to those in need, social
responsibility in marketing promotes an enhanced company image, which can
significantly impact profitability and even productivity favorably. Thus, the
marketing of social responsibility is important for businesses that want to keep or
attract consumers with mindsets toward the environment, social issues and
economic growth.

Examples of Corporate Philanthropy

International:
• Kraft Heinz’s Rise Against Hunger Partnership
• Microsoft’s Volunteer Grant Program
• ExxonMobil’s Employee Matching Gift Program

Local:
• SM Foundation – scholarship program
• Jollibee Foundation Inc. – hunger eradication

4. Economic Responsibility
“Successful people have a social responsibility to make the world a better place and
not just take
from it.”
- Carrie Underwood
Economic Responsibility, what is it?
When a business is acting with economic responsibility in mind, it is making
financial decisions that prioritize doing good, not just making more money. This
means that this type of CSR is intertwined with the other types above. - Pacific
Oaks College

Economic responsibility is an interconnected field that focuses to strike a balance

between business, environmental, and philanthropic practices. In this context,
companies try to find out a solution that can facilitate their business growth and
generate profits by benefitting the community and our society.
- Jannatun Nafi

Economic responsibility initiatives involve improving the firm’s business

operation while participating in sustainable practices.
- Corporate Finance Institute

Economic responsibility is the practice of a firm backing all of its financial

decisions in its commitment to do good in the areas listed above.
- Tim Stobierski

A.3 ASSESSMENT ON THE PRACTICE OF CORPORATE SOCIAL

RESPONSIBILITY
I. WHAT IS A CSR ASSESSMENT?
A CSR assessment is an evaluation of how well a company has integrated
corporate social responsibility (CSR) into its business. By undertaking a CSR
assessment, you can better understand how your company performs in relation
to your peers and will be able to provide valuable information to your
customers and other stakeholders.

II. How is the Assessment Carried Out?

1. Assemble a CSR leadership team
Representatives from the board of directors and top management or
owners, as well as volunteers from various units within the firm affected
or involved in CSR issues.

2. Develop a working definition of CSR

This will become the basis for the rest of the assessment.

3. Identify legal requirements

An essential step is to ensure that the business already respects existing
laws (governance, taxation, labor, environment, etc.). Firms’
reputation can be quickly damaged if it is found in breach of basic
laws.

4. Review corporate documents, processes and activities

 The team should review key corporate documents, processes and
activities for actual and potential CSR applications.

5. Identify and engage key stakeholders

The team may wish to hold discussions with key external
stakeholders about CSR. Mapping interests and concerns of
stakeholders against those of the firm can reveal both opportunities
and potential problem areas.

III. BENEFITS OF CSR ASSESSMENT

1. Improving financial performance
2. Strengthening public image and brand
3. Increase in sales and customer loyalty
4. Lowers employee retention rate
5. Access to more investment and capital

IV. Some of the major areas which are considered in CSR assessment are:
1. Management practices and reporting methodology
2. Commodities/products and services
3. Environment policies and practices
4. Working conditions of employees
5. Human rights observation at all stages
6. Measures to prevent corruption and policies
7. Appropriate corporate governance

A.4 CORPORATE CITIZENSHIP AND CORPORATE PHILANTHROPY

I. CORPORATE CITIZENSHIP
- is the idea of demonstrating ethical behavior meaning it adheres to laws,
regulations, and accepted business practices in the places where a company
operates. It also describes the role of the corporation in administering
citizenship rights for individuals.

II. Difference between CSR and Corporate Citizenship

CSR CORPORATE
CITIZENSHIP
Profit for shareholders Profit and the good of
(doing well by doing society (good corporate
Motivation
good) Pragmatic citizenship) Ethical
Legitimacy Legitimacy
Firm stakeholders Civil society,
particularly the citizens
Affected Group of those countries where
production or
consumption occurs
Outcomes for firm Possible short-run Possible long-run
competitive advantage competitive advantage
 due to increased due to expanded
reputation legitimacy
Wealth maximization, Cleaner environment,
product differentiation, safer work conditions,
Outcome for affected enhanced work expanded human rights,
group environment, healthier unification of standards
communities, greater across societies
managerial discretion

Profits for shareholders (doing Profit and the good of society well by doing good)
Pragmatic (good corporate citizenship) legitimacy

III. Benefits of Corporate Citizenship

• Excellent employee-employer relations
• Improved customer relations
• Enhanced marketing
Corporate Citizenship as “The social role of business” Matten & Crane, 2003

IV. The Four Faces of Corporate Citizenship

1. Economics: Good Corporate Citizens are Profitable
Be profitable (carry their own weight or fulfill their economic responsibilities).
2. The Law: Society’s Codified Ethics
Obey the law (fulfill their legal responsibilities).
3. Going Beyond the Law: Ethics and Moral Management
Engage in ethical behavior (be responsive to their ethical responsibilities).
4. Giving Back: Philanthropy
Give back through philanthropy (engage in corporate contributions).

How a company delivers on its core values in a way that:

 Minimizes harm.
 Maximizes benefit.
 Is accountable and responsive to key stakeholders.
 Supports strong financial results.

V. Stages of Corporate Citizenship

1. Elementary
citizenship activity is episodic and its programs are undeveloped
2. Engaged
top management often wakes up to society’s increasing expectations and
begins to adopt a new outlook on the company’s role and responsibilities.
3. Innovative
During this stage of development, a company moves forward in two ways:
1) broadening its agenda by embracing a more comprehensive concept of
citizenship
 2) deepening its involvement as a top leader and assuming more of
a stewardship role
4. Integrated
This is when a company has fully blended with activities and processes
involved in corporate social responsibility. The Integrated Stage is to progress,
in Greiner terms, from coordination to collaboration in driving citizenship
efforts.
5. Transforming
This is the stage an organization has fully grasp what corporate citizenship
entails, the standards and processes involved. Finally, firms at this stage
seldom operate solo in the social and environmental realm.

VI. WHAT IS CORPORATE PHILANTROPY?

 Activities which companies voluntarily initiate that aim to manage their impact
on society.
 Typically, corporate philanthropic activities include monetary investments,
donations of products or services, in-kind donations, employee volunteer
programs and any other business arrangements which aim to support a
social cause.

* There are a variety of methods in which companies can engage in corporate

philanthropy, depending on their particular industry, size, investment capabilities
and more. It's important to note, though, that corporate philanthropy differs from
corporate social responsibility (CSR), in that CSR is typically incorporated into a
company's actual practices and functions as a business.

VII. DIFFERENT TYPES OF CORPORATE PHILANTROPY

 Matching gifts are a popular type of corporate philanthropy effort. In
matching gift programs, companies will donate the same amount of money to a
nonprofit or community organization that other stakeholders do.
 In volunteer grant programs, companies usually contribute monetary
donations to nonprofits and community organizations that match
stakeholders' volunteer contributions.
 These programs usually employ a particular hour-to-donation formula which
companies use to calculate the amount of their contributions after
stakeholders have completed their volunteer hours.
 In employee grant programs, companies usually award monetary grants to
organizations selected by employees.
 Community grant programs typically allow nonprofit or community
organizations to apply for funding from a company
 Community works programs refer to those initiatives in which companies
donate specific products, services or infrastructure to local communities.
 Scholarship and fellowship programs are some of the most common
corporate philanthropy initiatives, as they're typically straightforward
endeavors that seek to financially support promising community leaders,
students and other individuals.
 Volunteer support initiatives typically entail companies donating employee
time to support nonprofit or community organizations. Sometimes, companies
will partner with organizations to provide specialized support aligned with their
unique abilities.
 Corporate sponsorship is a standard type of philanthropic initiative in which
companies provide financial support to nonprofit or community organizations
which help further their particular mission.
VIII. BENEFITS OF CORPORATE PHILANTROPY
 Giving back to your community is a good thing to do.
 Philanthropy programs can improve a company's public reputation.
 Company sales can increase due to philanthropic efforts.
 Customers may become more loyal to company products.
 Philanthropic companies attract more talented candidates.

IX. STEPS IN CREATING A PHILANTROPY PROGRAM

1. Find a team member to spearhead the program.
2. Select a method of philanthropy that aligns with your organization's mission.
3. Locate and set aside funding for the program.
4. Draft a comprehensive plan of execution.
5. Create a marketing plan to promote your giving.
6. Keep track of program metrics and review them regularly to maximize the
impact of your program.