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At a glance

Corporate social responsibility (CSR) is becoming an issue many businesses’ are seriously considering and adopting.

• Corporate conscience took shape with the idea of the triple bottom line (3BL, TBL).
• TBL is based on the belief companies should have a bottom line in financial aspects as well as being accountable in environmental and social areas.
• Sustainability assesses the performance and risk of companies in the same three areas as well as governance and transparency.
• Sustainable responsible investment analyses the environmental, social and ethical issues material to a company’s profitability and sustainability.
• CSR is becoming a mainstream issue with programs for maintaining Corporate Social Responsibility held globally.

Article Tags:  CSR,  corporate social responsibility,  sustainability,  corporate philanthropy,  corporate conscience,  business,  planet,  responsibility,  

Corporate conscience

Kerry Boyne

14 December 2009

At a time when many of us are trying to be responsible citizens — recycling, conserving, avoiding sweat-shop brands etc — there’s an untold story: many corporations are doing it, too. Baby boomers who were out to save the world in the 60s and 70s, and then became part of the problem in the greed-is-good 80s, are now in key positions in those same corporations they once saw as the bad guys. And some are being born again. These days, companies of all kinds see corporate social responsibility (CSR) as an important plank in their mission statements: perhaps the most important in their interface with consumers. But do their consumers even know about it?

In December 2005, for example, Westpac topped the RepuTex corporate social responsibility (CSR) ratings for the third consecutive year, the only Australian company awarded an AAA rating. Three days later, Westpac also took the top honours in the Ethical Investor Australian Sustainability Awards as Sustainable Company of the Year. Yes, a bank — one of the Big Four, too.

Except for a few mentions buried in the finance news, it barely raised a ripple. Such awards address the major issues confronting the future of our planet, yet most of us aren’t aware they exist. As news, it’s just not sexy enough. Or could it be because the major media groups themselves rate so poorly — below what's considered acceptable (A) and way below companies we think of as the bad guys?

So what does it mean for the rest of us if banking, mining, energy and even pharmaceutical companies are being acknowledged for cleaning up their act? In fact, there is a sea change happening under our noses, one that offers us as consumers power we’re barely aware of — with the potential for much more if only we would use it.

In good company

The ideas behind corporate social responsibility (CSR) are nothing new, even if the jargon is. In an article for the Brisbane Institute, Dilhan Fernando of Dilmah — winner of Swedish thinktank the Medinge Group’s 2005 Top Brands With a Conscience award — cites the phrase coined by Milton Hershey in the 19th century: “business as a matter of human service”. Hershey believed we are morally obliged to share the fruits of success. Today, his chocolate company, with 13,700 employees and revenue of over US$4 billion, continues his legacy of community involvement and philanthropy as well as having a policy of responsible cocoa growing.

Fernando recalls how his father Merrill J’s struggle to bring fairness and equity into the Sri Lankan tea industry took 30 years: “Eventually, it was Australia that gave him a go in 1988 by bringing a producer-owned brand, packed at origin — with no middlemen involved — direct to consumers.” Dilmah moulds its corporate philosophy around its Five Pillars: quality, tradition, ethics, customer and integrity. The company prides itself on its more-expensive-to-produce single-origin tea made the traditional way so profits remain in Sri Lanka and the local tea workers get a fair deal. In addition, the company has its Merrill J Fernando Charitable Foundation through which it spends large amounts of its profits on medical care, education, childcare and nutrition.

Of course, one could name any number of businesses, large and small, that have long operated responsibly and many whose very raison d’etre is based on social or green principles — or both. Until relatively recently, though, big business was pretty much a conscience-free zone. No wonder, with little pressure from investors, consumers and employees to change its wicked ways. As for governments, globalisation has meant they’re losing power over corporations rather than exerting it.