Corporate Social Responsibility Essay Example for Free

Corporate Social Responsibility Essay Corporate social responsibility (CSR) is the idea that businesses conduct business practices for the social good while they pursue economic goals. It refers to operating a business in such a manner that all social environmental impacts that are created are then accounted for. Both market and nonmarket stakeholders expect businesses to be socially responsible. (Business and Society) It is a commitment to developing policies that integrate responsible business practices into daily operations, and to report on the progress made toward the implementation of these practices. (As you sow, 2011) So why is this so important? Some see this work as charity, philanthropy, or an allocation of resources that could better be donated by shareowners themselves, but to us, it is a vital investment in our future, essential to our top-line and bottom-line business success. Dunn, Hewlett Packard Senior Vice President for Global Citizenship Richard Murphy references a study, done in 2003 of buyer/supplier relationships, in his article â€Å"why doing good is good for business.† The study found a strong correlation between trust and procurement costs. The least trusted buyers in the study incurred procurement costs that were five times higher than the cost of most trusted buyers.† This statement alone shoes the value of social responsibility and how it now only impacts consumers views on the company but the relationships firms foster with suppliers. It is simply good for business. Throughout this report we will evaluate the importance of CSR and how it affects the firm and the impact the firm has on the community from and environmental perspective. A study performed in 2003, by researchers at the university of Iowa, evaluating the relationship between corporate social responsibility and firm performance; concluded â€Å"Corporate virtue, in the form of social responsibility and, to a lesser extent, environm ental responsibility is likely to pay off.† 1 After all it green is the color of money. It pays to go green this day in age. Going Green: Environmental Considerations Deseret Digital Media, also referred to as DDM, is an online internet conglomerate in the intermountain west. Being a media company, I’m sure much like others, environmental consideration are certainly a thought but not highly acted upon due to the â€Å"minimal† impact that online media has to the environment. While DDM has a strong company mission and culture, in which they excel and positively impact the community, they do little in means of protecting the environment. They are constantly in the public eye in their operation area due to their user base which leads me to believe that going â€Å"green† would only be a beneficial think for business. be good for business. Mark Orlitzky, Frank Schmidt, and Sara Rynes, â€Å"Corporate Social and Financial Performance: A Meta-analysis,† Organization Studies, 2003, pp. 403–41. Also investigating this issue are Marc Orlitzky and John D. Benjamin, â€Å"Corporate Social Performance and Firm Risk: A Meta-analytic Review,† Business Society, 2001, pp. 369–96; and for a contrarian view see Idris Mootee, â€Å"The Impact of Corporate Social Responsibility—From Creating Customer Goodwill to Influencing Social Standards,† Futurelab, blog.futurelab.net/2008/12. ENVIRONMENTAL CONSIDERATIONS We only have one earth, and one ecosystem. We each need to do our due diligence in protecting that ecosystem. Understanding the earth’s carrying capacity, how fast resources are being used and what we are doing to change that, can only positively affect our world ecosystem. Damaging any part of the ecosystem in one area can affect others in other parts of the world. (Lawrence Weber, 2010) Now human activity affects three major forms of natural resources; water, air and land. (Lawrence Weber, 2010) Deseret Digital Media can actively improve business practices and protocols to reduce the company’s impact on the usage of those three natural resources. Areas of impact below include but are not limited to: Water Resources: 3% of the water on earth is actually fresh. Only about one-tenth of 1 percent of the Earth’s water is in lakes, rivers, and accessible underground supplies, and thus available for human use. Water is, of course, renewable: Moisture evaporates from the oceans and returns to Earth as freshwater precipitation, replenishing used stocks. But in many areas, humans are using up or polluting water faster than it can be replaced or naturally purified, threatening people and businesses that depend on it. Humans are consuming/using water faster than it can be replaced or naturally purified, threatening those who depend on it. (Lawrence Weber, 2010) ï‚ § Considerations: DDM currently does nothing to maintain their water consumption. Currently the only consumption that is taking place is human usage by means of drinking water and restroom usage. Might not seem like a significant amount of consumption however; simple math, 100 employees x 64 ounces of drinking water = 6,400 ounces of water a day. While drinking water should not be regulated there are other ways to regulate water usage. ï‚ § Recommendations: A very simple concept used in all places, the restroom, can minimize water consumption quite significantly. Reducing the amount of usage by installing flushometeres. The current standard specifies that flushometers use no more than 1.6 gpf, though many manufacturers are shooting for 0.8 gpf (3 liters) 2. Urinals are also improving: The U.S. Department of Energys standards for urinals are currently at 1 gpf (3.8 liters)3. An important water-saving feature of commercial flushometers is that they can be designed to let users push a handle in one direction for liquid waste and another direction for solid waste. The latter would trigger a full flush while the former would trigger a partial flush. This dual-flush technology is becoming common other parts of the developed world, including the U.K. and Australia, though it has yet to become as popular in the United States. With wider use of these features, water efficiency is expected to improve for all toilet types. (Cancio, 2009) Air Pollutants/Energy Consumption: According to the American Lung Association (ALA) an estimate in 2008 reported that 125 million Americans, or 42 percent of the population, were breathing unsafe air for at least part of each year. (Lawrence Weber, 2010) This has to do with the pollutants that are being emitted into the air we are forced to breath. A major contributor the unsafe air and even more concerning; a major factor of Global Warming is the burning of fossil fuels that releases carbon dioxide. Not only do fossil fuels affect the air they also account for a huge percentage of the world’s energy source. 85% of the energy in the United States comes from fossil fuels by way of combustion of coal, oil and natural gas. (Lawrence Weber, 2010) Kohler. Power Lite Technology. (accessed December 11, 2009)http://www.us.kohler.com/tech/products/why_powerlite.jsp U.S. Department of Energy. Best Management Practice: Toilets and Urinals. Federal Energy Management Program. July 2009. (accessed December 16, 2009)http://www1.eere.energy.gov/femp/program/waterefficiency_bmp6.html Unfortunately the unlike water fossil fuels are nonrenewable energy sources. Even more concerning is that for every one barrel discovered for every three or four consumed. ((Lawrence Weber, 2010) 10) ï‚ § Considerations: When it comes to air pollution DDM luckily doesn’t have to worry about it as much, as say, a manufacturing facility. What needs to be considered more in depth is the amount of energy being used on daily basis. Being an internet company and hosting six websites 24/7, requires multiple servers and in turn a high consumption of energy. Along with traveling from coast to coast and using fossil fuel resources there are a few small â€Å"green† concepts that can be applied to reduce the amount energy being used. Deseret Digital Media has mentioned upgrading the hosting servers to protect the sensitive content, as well as, an energy saver. Recommendations: Something as simple as encouraging each employee to put their computers in an energy saving mode, turning computers in sleep mode or shut down when leaving for the evening. Updating IT equipment, and using energy saving light bulbs, are small changes that can make a sustainable difference. Land Waste: The United States produces an astonishing amount of solid waste, adding up to almost five pounds per person per day. Of this, 46 percent is recycled, composted, or incinerated, and the rest ends up in municipal landfills4. (Lawrence Weber, 2010) ï‚ § Considerations: While 46% is quite a large percentage there is more that can be done to protect the environment. Currently DDM has a small recycling program that is not widely publicized. While it is a great concept more needs to be done in order to encourage employees to use such programs. ï‚ § Recommendations: While having a small recycling program is a great concept more needs to be done encouraging employees. Posting flyers around the office, ensuring everyone is aware of the recyclable materials. DDM has numerous soda fountains throughout the building for their employees. Currently the drinking cups provided are Styrofoam that get thrown away regularly. Offering employees reusable hard plastic cups will help reduce the company’s carbon footprint and the amount of waste that is admitted into local landfills. ETICAL LEADERSHIP CONSIDERATIONS In simple terms what are ethics and how do they play a role in business? Ethics is a conception of right and wrong conduct. It tells us whether our behavior is moral or immoral and deals with fundamental human relationships—how we think and behave toward others and how we want them to think and behave toward us. Ethical principles are guides to moral behavior. (Lawrence Weber, 2010) Business ethics derive from the same moral compass. This generalized human trait is applicable to business and their ethical ideas and behavior within an organization. All areas of business, accounting, marketing and IT have to follow a certain standard of ethical considerations in operations. For this report in particular we will focus of ethical leadership and how they play a role in our green effort, with regards to social responsibility. Institutionalizing a code of ethics and ethical safeguards are grounds for encouraging environmental ethical performance. Institutionalizing a code of ethics encourages our employees to align with the company’s â€Å"green† mission (an articulation of our goals) and our societal obligations. By creating a strong code of ethics we are establishing expected behaviors among employees. Environmental Protection Agency, â€Å"Municipal Solid Waste in the United States: 2007 Facts and Figures,† www.epa.gov/epawaste. ethical behavior is extremely important because it will help to ensure that employees have predefined expectations of in office behavior and guidelines to follow in all functional areas of operation, as well as the companies green efforts. In the first line of the written mission statement form Deseret Digital Media (2012) it states, â€Å"The mission of Deseret Digital Media is to become the trusted digital voice in all of the markets we reach. This goal is part of our broader corporate mission to become â€Å"trusted voices of light and knowledge, reaching hundreds of millions people.†Ã¢â‚¬  They are trying to accomplish what any company is hoping to do as well, be a trusted place to come to for your product, service or information. To develop a strong presence in the market by adhering to the green policy suggested above, DDM can have a much greater impact on their local market. As much as it pays to be green, ethics pays as well. Below review the ethical leadership recommendations for each environmental issue discussed above. Water Resources: The water conservation suggestion presented above is a little bit more detailed and requires many parts in order to implement. To start management will need to get with building maintenance and even determine if this is possible to make such a change to the plumbing. From there the implementation process will take some time and patience leaving many toilets out of commission for a time. After the conversion process has been completed a company meeting will need to be held regarding how the new toilet process will work. It wont need to be in depth just a quick overview is needed and the importance and positive impact it will have on the community. Air Pollutants/Energy Consumption: With the recommendation above: Something as simple as encouraging each employee to put their computers in an energy saving mode, turning computers in sleep mode or shut down when leaving for the evening. Updating IT equipment, and using energy saving light bulbs, are small changes that can make a sustainable difference. A lot can be done by management’s actions. If management isn’t shutting down at the end of the night, and we have outdated equipment what makes employees inclined to want to save our resources. Leading by example and have management place their computers in an energy saving mode and sending a interoffice memo encouraging employees to do the same thing will definitely help reduce the amount of energy being consumed by DDM in a daily basis. As for updating the servers to be more energy efficient DDM is one step ahead of the game. They VP of Technology realized what an impact that would make and this suggestion is currently in process. Land Water: Since DDM has a tiny recycling program with limited recycling stations it would be suggested that management offer individual recycling bins to be stationed at each individuals workstation. This way it is more accessible/convenient for employees to recycle certain materials as opposed to throwing them into a waste bin, which will eventually be deposited into one of the nations landfills. This small step can mean great things for reducing the company’s carbon footprint. We want to accomplish just that by allowing consumers to feel safe buying our product and letting their children play with it. Their stakeholders are those who use media on a daily basis, while ours are children and parents of children who buy/use our toy collections. â€Å"All Deseret Media Companies are owned by The Church of Jesus Christ of Latter-day Saints. That ownership comes with a significant amount of trust and an expectation that we will align our actions to honor our owner. We want to work hard to demonstrate that we value our users and our marketplaces as well. To paraphrase the founder of largest the social media network in the world, We don’t create communities, they already exist. We know we have to earn the trust of the communities and individuals who choose to use our products. We are not perfect, but we want you to know that Deseret Digital is always working†¦Ã¢â‚¬  (Deseret Digital, 2012) We need to align our actions much like Deseret Digital Media is order to grow a successful business and maintain employee and customer satisfaction. MEASURING SUSTAINABILITY TRIPLE BOTTOM LINE Now that we have a solid suggestion for the implementation of our green movement, we need to ensure that it â€Å"makes sense† for the company. Not only in a socially responsible manner but also from a fiscal stand point. A common and effective way to measure environmental impact compared to the company’s financials is known as Triple Bottom Line Accounting (TBL). Triple Bottom Line is a concept that was first coined by John Elkington of SustainAbility in 1994, and it referred to the interrelated goals of economic prosperity, environmental quality, and social justice. He developed the TBL concept in context of the growing concern centered around sustainability. TBL added the social dimension to the corporate sustainability framework which had previously focused mostly on businesses’ environmental impacts. The next year, SustainAbility developed the 3P (People, Planet, Profits) formulation of the TBL. Elkingtons 1997 book, Cannibals with Forks: The Triple Bottom Line of 21st Century Business, helped launch the concept of the TBL among corporate leaders. (McNulty , 2012) The TBL concept provided a means of incorporating sustainability concerns within the traditional accounting framework familiar to and accepted by corporate managers. While there is no universally accepted means of practicing TBL accounting and reporting, the TBL framework is widespread in the business world. A 2008 survey by KPMG of the 250 largest companies in the world found that nearly 80 % of them issued corporate sustainability reports and that the large majority (77 %) of the companies reporting did so using the TBL standards developed by the Global Reporting Ini tiative (GRI). (McNulty , 2012) This concept enables the organization to effectively assess sustainability movements and performance. Furthermore the metrics provide managers with feedback to make more informed decision and displays a picture for employees to see exactly hoe their green efforts contribute to corporate sustainability goals. When making a decision to use the TBL the Global Reporting Initiative (GRI) is a great way to benchmark performance indicators for all three aspects; people, planet, and profits. The â€Å"people† component of the TBL refers to the social aspects of the an organization’s activites and impacts. In short it is meant to gauge the organizations impacts on and relations with its own employees, its suppliers and contractors, the communities within which the organization operates, and the organizations customers or clients. (McNulty , 2012) Since this is much harder to determine the social impact the ‘people’ component is slightly less developed so we aren’t going to focus too much on that. Compare to the ‘people’ aspect, with the â€Å"planet† component it is easier to measure environmental impacts. (McNulty , 2012) There are many metrics that contribute to the performance indicators used in the GRI. For the purposes of corporate sustainability, the Profits component of the TBL takes a broader view of an organizations economic impacts and evaluates the activities and impacts of a firm with respect to a wider array of stakeholders than just the firms owners. (McNulty , 2012) Below is an example of TBL principles: PowerStar, an electric utility company, is considering making an investment in a new power plant and is evaluating several options that use different technologies and would be located at different appropriate sites. The technologies being considered use different fuels and require different capital and labor inputs for construction and ongoing operations. In the past, PowerStar focused primarily on the financial returns associated with the different options. The firm has now adopted the TBL framework and is using a project evaluation matrix. This matrix evaluates how projects can be evaluated and trade-offs identified in terms of economic, social, and environmental impacts.