SHRM-CP / SHRM-SCP Certification Exam: Workplace - Corporate Social Responsibility (CSR)

Functional Area 14—Corporate Social Responsibility
Here is SHRM’s BoCK definition: “Corporate Social Responsibility (CSR) represents the organization’s commitment to operate in an ethical and sustainable manner by engaging in activities that promote and support philanthropy, transparency, sustainability and ethically sound governance practices.”
As an HR professional, your role is to help the organization and its employees to integrate corporate social responsibility (CSR) into the everyday business activities of the organization. CSR reflects how the organization integrates and aligns with its communities as a helping hand for sustaining economic prosperity, social equity, and environmental protection.

Key Concepts
- Approaches to community inclusion and engagement (e.g., representation on community boards, joint community projects, employee volunteerism)
- Creating shared value (e.g., definition, best practices)
- Developing CSR-related volunteer programs (e.g., recruiting and organizing participants)
- Organizational philosophies and policies (e.g., development, integration into the organization)
- Principles of corporate citizenship and governance
- Steps for corporate philanthropy and charitable giving (e.g., selecting recipients, types, donation amounts)

The following are the proficiency indicators that SHRM has identified as key concepts:


The Ever-Changing and Growing CSR
HR can no longer see CSR as an isolated defensive or tactical action. CSR is now seen as a comprehensive strategic initiative for the organization, aligned with business strategy. CSR now has a global reach and impact, enriching and broadening its communities and beyond. As cultural and political landscapes and opinion shift, so does the need for CSR in an organization.

Is Sustainability the New CSR?
Sustainability practice is in every aspect of doing business today and needs to be ingrained in an organization’s culture, becoming an ongoing process and way of doing business. Sustainability is a key focus for many organizations as government and regulatory pressures, societal demands, and even climate change have increased its demands on companies. For organizations, this means a conscious way of doing business and how it impacts their communities, employees, and environments. In addition, businesses must assess social and environmental risks and opportunities with their business decisions. This approach is referred to as the triple bottom line, which is the simultaneous delivery of positive results for people, the planet, and profit. Sustainability, such as environmental stewardship, workplace responsibility, human rights protection, and good corporate citizenship, are increasingly part of an organization’s social legitimacy. The HR function is critical to achieving success in a sustainability-driven organization.

Redefining Sustainability
Sustainability and the associated accountability efforts within sustainability (behavior that is cognizant of depleting resources that the organization is intertwined with) have also become front and center for CSR. Time, labor, and finances are where HR is involved with the design or implementation of programs. An example of a program would be re-entry into the workforce by former stay-at-home parents. “Green initiatives” along with “environmental footprints” are now prime attention grabbers within CSR. HR departments reducing their paper printing needs by converting to online paperless activities such as employment and benefit forms, employee handbooks, and newsletters are green initiatives. Creation of a paid-time-off volunteerism policy for employees is another popular initiative in CSR.

Today’s CSR
Corporate social responsibility involves keeping a watchful eye within the organization’s communities, including local, national, and even international. CSR strives to enhance the organization’s reputation. Strategic relationship and behaviors are elements involved in CSR activities such as being a member of the Chamber of Commerce or sponsoring a local nonprofit fundraiser creating a corporate citizenship. Multiple departments may have responsibility, yet HR is typically the department primarily at the core, absent an organization’s official CSR or public relations department.

Forces Shaping Today’s CSR
The external forces that typically drive goals and objectives in CSR can be better understood by looking at this Figure.

Figure Corporate responsibility

According to McKinsey & Company, when identifying the goals and objectives for CSR, it is ideal to use the same analysis tools as used with strategic planning to identify the long-term investment and involvement for the organization.

Creating a CSR Strategy

As mentioned, the CSR of an organization needs to be carefully aligned with the organization’s business goals and strategies. As with all strategy initiatives, careful planning must be undertaken. Research into frameworks and existing benchmarks should be involved, and so should the reports of CSR initiatives.

Frameworks, Guidelines, and Examples
Gaining a clear perspective of the work is the best starting point for developing a CSR strategy. There are several international organizations that have provided frameworks and templates, along with guidance for organizations.
- Global Reporting Initiatives’ G4 guidelines
- The United Nations Global Compact that developed a broad statement of principles on which a CSR strategy can be based
- The International Organization for Standardization and the Social Accountability International (SA) that created standards addressing specific sustainability issues and social responsibilities
The most widely accepted frameworks and guidelines are briefly described next. Although this are a good starting point to develop your organization’s CSR strategy, be sure to tailor them to your organization’s industry and unique environments. Review your CSR annually and benchmark against other like organizations.
 

OECD Guidelines for Multinational Enterprises   The Guidelines for Multinational Enterprises established in 1976 by the Organisation for Economic Co-operation and Development (OECD) is one of the first to address corporate governance.

Since 1976 the guidelines have had many revisions; 2008 saw the most recent version, which covered the following:
- Transparency governance and disclosure
- Environment
- Consumer interests
- Workforce relations
- Bribery
- Science and technology application and access
 

United Nations Global Compact   Introduced in 2000, the United Nations Global Compact has ten principles addressing human rights, labor, environmental, and anticorruption issues. When an organization commits to uphold these principles, it also agrees to annually report on the progress, including specific actions taken.
 

The UN Global Compact’s Ten Principles
Human Rights
Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights.
Principle 2: Make sure they are not complicit in human rights abuses.
Labor
Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining.
Principle 4: Eliminate all forms of forced and compulsory labor.
Principle 5: Abolish child labor.
Principle 6: Eliminate discrimination in respect to employment and occupation.
Environment
Principle 7: Businesses are asked to support a precautionary approach to environmental challenges.
Principle 8: Undertake initiatives to promote greater environmental responsibility.
Principle 9: Encourage the development and diffusion of environmentally friendly technologies.
Anti-Corruption
Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery.
Caux Principles   The Caux Round Table (CRT) principles believe that the world business community should play an important role in improving economic and social conditions. In 1986, a network of business leaders from Japan, Europe, and the United States (aka the Caux Round Table) began meeting because of mounting trade tensions. In 1994 they developed and formalized a set of international business standards based on the values of human dignity and working together for the common good. These became known as the Caux principles, which was one of the earliest employer-led efforts for an international code of ethics. The key Caux principles58 are as follows:
- Principle 1: Respect stakeholders beyond shareholders. Contribute value to society and act with honesty and fairness toward customers, suppliers, competitors, employees, and the community.
- Principle 2: Contribute to economic, social, and environmental development. Maintain investments in the community and its economy that support the environment and social well-being as well as organizational income.
- Principle 3: Build trust by going beyond the letter of the law. Know the spirit and intent of the law and abide by them rather than just the letter of the law.
- Principle 4: Respect rules and conventions. Respect local cultures and traditions everywhere the organization operates.
- Principle 5: Support responsible globalization. Perhaps the most controversial of the Caux principles, this calls for reforming domestic rules and regulations where they impinge global commerce. It supports open and fair multilateral trade.
- Principle 6: Respect the environment. Protect environmental needs while conducting business so the next generations will have the advantage of a secure planet.
- Principle 7: Avoid illicit activities. Corruption of all kinds, bribery, money laundering, drug trafficking, human trafficking, and other illegal and illicit activities are not condoned.
 

ISO 26000   

The ISO is the world’s largest developer of voluntary international standards. ISO 26000 is the international standard developed to help organizations effectively assess and address those social responsibilities that are relevant and significant to their mission and vision; operations and processes; customers, employees, communities, and other stakeholders; and the environment. ISO 26000 provides guidance on key themes of social responsibility across a wide spectrum of topics; it’s a quality standard, though not a certification. The principles have social and environmental responsibility and guidance for action/implementation.

ISO 26000 addresses seven core subjects of social responsibility as shown in this fiigure:

Figure      The seven core subjects of ISO 26000, “Social Responsibility”
 

SA8000   Social Accountability International (SAI) is the international nongovernmental organization that created SA8000. SA8000 is an auditable certification standard that encourages organizations to develop, maintain, and apply socially acceptable practices in the workplace. It is one of the first certification standards (1997), focusing on human rights and labor relationship, that provides process and performance criteria. It is based on both United Nations and International Labor Organization (ILO) standards.

Close to 2,500 facilities with approximately 1.5 million employees around the globe have adopted SA8000. It is frequently used as a tool for ensuring human rights in extended supply chains (aka slave labor). It not only focuses on standards of performance but also on systems that need to be in place for management.

In the latest version as of June 2014, nine key areas are the focus of SA8000.
- Human rights and labor relations
- Child labor
- Forced or compulsory labor
- Health and safety
- Freedom of association and right to collective bargaining
- Discrimination
- Disciplinary practices
- Working hours
- Remuneration
- Management systems
 

GRI G4 Sustainability Reporting Guidelines   

The Global Reporting Initiative (GRI) G4 Sustainability Guidelines are the universally accepted standard for global reporting or a company’s sustainability effort and progress. The main goal is for organizations to identify and report on what GRI terms mertial aspects that are significant to a business’s economic, environmental, and social impacts that influence the decisions of its stakeholders.

The guidelines are divided into two parts.
- Reporting Principles and Standard Disclosures (criteria for preparing the sustainability reporting)
- Implementation Manual (explanations for applying the principles for the reporting)
GRI has other supplementary guidelines, listed here:
- Assistance with G4 efforts
- Guidelines for specific business sectors such as oil and gas, financial services, food processing, media, and so on
- Interactive guides that are online for assisting with specific concerns and issues such as risk management and supply chain
- A sustainability disclosure database providing URL links to corporate CSR reports and scorecards

The G4 list is organized into categories, as shown here:
KPMG Survey of Corporate Responsibility Reporting   KPMG has been tracking the trends in corporate responsibility reporting since 1993. KPMG provides a detailed examination of what is being reported and the quality of the reporting. KPMG reporting is helpful with the following:
- Identifying areas that organizations need to address and how to report and measure on the results and outcomes.
- Providing support in making the business case for a sustainability strategy for an organization. This section of the reporting has interviews with industry leaders who discuss how to best maximize the value of sustainability.
You can find more information on KPMG reporting surveys at www.kpmg.com.

Philanthropy and Volunteerism
Corporate philanthropy has been around for decades and was typically the influence of senior management within a corporation. Although corporate philanthropic activities such as monetary donations, percentage of sale, and cooperative programs are still widely in existence, the tide has shifted to a more strategic focus on donations, one that affiliates with the organization’s relevant business or branding. A good example of this is the cosmetic company Avon, which is widely known as a corporate sponsor for breast cancer research. The company’s customer base is relevant to the majority of affected individuals with breast cancer, women.

Employee Volunteerism
An aspect of CSR is employee volunteerism. It has been growing in popularity in organizations and for good reason. Volunteerism can positively impact employee engagement. Surveys have indicated that when employees frequently participate in company-sponsored volunteer programs, then they are more likely to feel a strong connection and sense of belong at work, which is good for retention. While volunteering sounds like a win-win for everyone, in practice there can be some pitfalls that HR professionals need to be aware of. Chief among them is ensuring that the activities are truly voluntary, especially if the employer is not paying employees to participate.
A great risk for employers centers around the Fair Labor Standards Act (FLSA). An employer can’t require an employee to “volunteer.” As an example, let’s say a company organizes a disaster relief effort for a community recently hit by a hurricane and asks for employees to volunteer to help hand out water and blankets or provide meals. If getting involved is truly voluntary, then that is perfectly fine. But once it’s required of any employee, the employee is no longer a volunteer, and it’s considered time on the payroll clock. Companies sometimes get so caught up in pushing employees to get involved that they cross this line even though their intentions were for the good of all.
Another related risk for for-profit companies is that there is no such thing as “volunteering” for a for-profit company. If the company “suffers or permits” an employee to work, the employee has to be paid at least minimum wage under FLSA. This issue has shown up recently related to the use of unpaid interns.
Organizations need a program and policy around volunteerism so employees and management completely tow the FLSA line and understand what can and should not be expected of the workforce. Without a policy, there can be misunderstandings and ill-will on the part of employees. Having a policy or process helps to clarify expectations.