Corporate Social Responsibility: An Implementation Guide for Business
What is the business case for CSR? The business case for CSR will differ from firm to firm, depending on a number of factors. These include the firm’s size, products, activities, location, suppliers, leadership and reputation (i.e., of the sector in which the firm operates). Another factor is the approach a firm takes to CSR, which can vary from being strategic and incremental on certain issues to becoming a mission-oriented CSR leader. The business case for CSR also revolves around the fact that firms that fail to engage parties affected by their activities can jeopardize their ability to create wealth for themselves and society, and increase the risk of legal or other responses. Taking into account the interests and contributions of those one affects is the basis for ethical behaviour and sound governance. CSR is essentially a strategic approach for firms to take to anticipate and address issues associated with their interactions with others and, through those interactions, succeed in their business endeavours. There is growing consensus about the connection between CSR and business success. The World Business Council for Sustainable Development (WBCSD) has noted that a coherent CSR strategy based on integrity, sound values and a long-term approach offers clear business benefits to companies and contributes to the well-being of society.
Investor recognition of CSR in the marketplace The recent progress of the socially responsible investment (SRI) movement at the domestic and international levels provides evidence that the marketplace is developing both social and environmental information and criteria to supplement the traditional financial criteria used to make investment decisions. Market indexes and professional firms now provide information to mutual funds, private equity funds, venture capital funds, commercial banks and other financial market investors about a wide range of corporate characteristics, including governance, human resource management, health and safety, environmental protection and community development. Some examples of SRI indexes are the Dow Jones Sustainability index, FTSE4GOOD 100 Index, Jantzi Social Index Canada, Innovest, Calvert CALVIN Social Index and KLD Domini 400 Index. In the U.S., nearly one dollar in every ten under professional management is involved in SRI.11
11 See “2005 Report on Socially Responsible Investing Trends in the United States,� Social Investment Forum, 2006.
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