Tsiligou Athanasia is writing…

“A business that makes nothing but money is a poor business.” – Henry Ford. And before I raise more questions than I can answer, no, it does not refer to goods but to actions. So, before diving into the content of the article, I want you to imagine a company as a natural person, in other words, as a human being. Humans, as we know, have obligations. Towards themselves, towards those around them, and ultimately towards the environment. With the same logic, businesses also have obligations, and in fact, an entire science has been created around this idea, known as Corporate Social Responsibility.

Corporate Social Responsibility (CSR) is a concept as old as the history of businesses itself. It was first encountered in ancient Mesopotamia around 1700 BC, where the Code of Hammurabi condemned builders, farmers, and other professionals whose workers suffered from work-related accidents. The term “corporate social responsibility” was coined in 1953 by Bowen, a professor at the College of Commerce, University of Illinois, in a book titled “Social Responsibilities of the Businessman,” where he defined corporate social responsibility as “the obligation of businessmen to pursue those policies, to make those decisions, or to follow those lines of action which are desirable in terms of the objectives and values of our society.”

Some common ways in which companies engage in CSR include:

• Supporting philanthropic purposes through donations or voluntary efforts.
• Implementing environmentally friendly practices in the workplace.
• Providing fair wages and benefits to employees.
• Offering volunteer opportunities and community service for employees.

So, asking “Why should CSR exist?” is like asking “Why should someone engage in philanthropy?” The answer, in both cases, is crystal clear: “For the good of civilisation.” According to Porter and Kramer in their article “Strategy & Society,” they argue that “successful companies need a healthy society” and “a healthy society needs successful companies.“

As important as Corporate Social Responsibility (CSR) is for the community, it is equally valuable for a company. CSR activities can help forge a stronger bond between employees and organisations, boost morale, and help both employees and employers feel more connected to the world around them.

The CSR strategy should align with the corporate purpose and values, reflecting the uniqueness of the business and a deep commitment to creating value for stakeholders. It needs to be more holistic (as stated in the EU Green Paper), targeting both employees and the company’s culture, internal organizational mechanisms, and external societal actions. Bob Willard, in his book “The NEXT Sustainability Wave,” identifies ten factors that shape a CSR strategy: climate change, pollution/health, negative impacts of globalization, energy crisis, trust erosion. These factors create environmentally conscious consumers, activist shareholders, politicized society, additional regulations and legal constraints, and a demanding financial sector. Together, they drive businesses to promote innovation, growth, attention to their public image, creation of additional reserves and productivity, and ultimately, the creation of business value.

Until now, despite the hardships happening in the environment around us, companies have existed with a common purpose: maximizing profits. But what would happen if we added one more word to this sentence? It would change to: Maximizing sustainable profits. By “sustainable” profits, we mean those that respect the Commons—the things we all share globally: air, water, land, flora, fauna, etc. “Maximizing profits” encourages companies to exploit the Commons rather than respect them. CSR actions may require allocating resources of the business with direct impact on its financial aspects. However, in practice, the benefits that a company ultimately reaps are numerous and multidimensional, including:

• Increased sales and customer loyalty.

• Enhancement of the company’s reputation.
• Operational cost savings.
• Better financial performance.
• Organizational development.
• Increased ability to attract and retain employees.

In conclusion, it is worth emphasizing that corporate social responsibility is now necessary and will play such a significant role in the coming years that the market will reject businesses without a social purpose and mission. CSR is a strategically essential challenge; it extends beyond the philanthropic and sponsorship work of businesses, cannot be cashed in for “good reputation,” and certainly cannot be quantified. It has been regarded as the dominant component of 21st-century business and has also been defined as something akin to beauty: “It’s not easy to define, but when you see it in action, you can recognize it.”

Bibliography:

• Wayne Visser , Dirk Matten , Manfred Pohl , Nick Tolhurst, (Μάιος 2010), ‘’ Το Α έως το Ω της Εταιρικής Κοινωνικής Ευθύνης: Πλήρης Οδηγός Αναφοράς σε Έννοιες, Κώδικες και Οργανισμούς’’, Ινστιτούτο Εταιρικών Πολιτιστικών Υποθέσεων (ICCA) 

• Haski-Leventhal Debbie, Κωνσταντίνος Μανασάκης, Γεώργιος Θερίου,  (2018), ‘’ ΣΤΡΑΤΗΓΙΚΗ ΕΤΑΙΡΙΚΗ ΚΟΙΝΩΝΙΚΗ ΕΥΘΥΝΗ, Εργαλεία και Θεωρίες για Υπεύθυνη Διοίκηση’’, ΤΖΙΟΛΑ

• Πετρομανωλάκη Ευαγγελία, (2017),  ‘’Αποτελεσματική στρατηγική της επιχείρησης μέσω της εταιρικής κοινωνικής υπευθυνότητας’’, https://rb.gy/uorz5 

• Αλεξίου Μ. (2015). ‘’Εταιρική κοινωνική ευθύνη: μία διαφορετική αντίληψη στο σύγχρονο επιχειρηματικό περιβάλλον. Επιστήμη και Κοινωνία: Επιθεώρηση Πολιτικής και Ηθικής Θεωρίας’’, 19, 115–133. https://doi.org/10.12681/sas.659 

• Ελληνική Δημοκρατία Υπουργείο Ανάπτυξης και Επενδύσεων, (06/12/2018), ‘’ Εθνική Στρατηγική για την Εταιρική Κοινωνική Ευθύνη (ΕΚΕ)’’, Δελτία Τύπου, https://rb.gy/bg21d 

• Corporate social responsibility, (09/09/2009), The Economist, https://www.economist.com/news/2009/09/09/corporate-social-responsibility