Reading
 Tench & Yeomans , Corporate Social Responsibility
pp.96-111.
Corporate Social Responsibility &
Community Relations
 Why care about the community and wider society
 There are big debates whether CSR is part of altruistic
philantropy or just a cunning business ploy to increase
profits.
 Whichever school of thought you are adhereing to, it
makes good sense to engage in CSR
 Johnson & Johnsons’s chief executive officer James
Burke demonstrated that companies with a
reputation for ethics and responsibility grew at a rate
of 11,3% between 1959 and 1990, while less ethical
companies only grew by 6,3%
(Labich 1992)
 Many authors have shown that CSR contributes to a
good corporate image and reputation
CSR’s importance for the
organisation
 Peach’s pond model (1987)
Level 3: societal
Responsibility for a healthy society
Help remove/alleviate society’s ills
Impact of a
business on
its environment
Level 2: organisational
minimise neg effects
Level 1:basic
Pay taxes
Observe law
Deal fairly
Act in the spirit of the law
 Others, e.g. say that the first responsibilities are
ECONOMIC, to be profitable which is the foundation
on which everything is built, then can we move to
legal, ethical and philanthropic obligations (Carroll
1991)
 This is a step however, from economists of the past
(Milton Friedman) who said that the only
responsibilities of a company is to make money! (1970)
CSR - levels
 Today many successful & profitable companies spend
large amounts of money and time on fulfilling their
social responsibilities, whatever their reasons behind
it.
 Many quote CSR as providing a competitive advantage
 Today we have an emergence of standards in the field
to encourage good practice
Standards and guidelines
 Dow Jones Sustainability Index
 FTSE 4 Good Index
 Business in the Community’s CSR Index
 Global Reporting Initiative’s Reporting guidelines
BITC Business in the community
 PerCent standard, this is awarded as a voluntary
benchmark to companies donating at least 1% of pretax profits
 In 2004, 152 companies reported through the 1 per
cent standard, with 116 achieving it.
 Among top givers (in absolute terms) are GlaxoSmith
Kline (£114,290,400), BP (£50,123,223) Royal Bank of
Scotland (£40,100,000)
CSR versus Philanthropy
 It is important to make a distinction
 A simple def. of Philanthropy is “corporations
performig charitable actions”
 It is a short-term one way relationship, unpredictable
for the receiver
Community relations - tactics
 Tactics have to be in line with the composition of the
local communities
 Research needs to be done to find out what kind of
people live in those communities
 Then tactics can be developed that suit both the
communities and the organisation’s objectives
Tactics
 Grants to local groups (e.g. parent & toddler group,
increasing literacy in the community, that can be of
benefit to the orgnisations to, reducing crime, etc
 Equipment (donating used or new equipment for
projects, raffle prizes, sponsorship)
 Free training (e.g. keeping accounts for non-profit
organisations, computer skills to unemployed)
 Projects (e.g. maintaining local parks, wildlife projects
etc by providing manpower or money)
 Use of facilities (e.g. letting canteen or sports hall etc)
 Visitor centres (to educate community, showing that
there is nothing to hide - e.g. Sellafield, sometimes
this is even self-financing such as Whisky Distillery
tours, Cadbury’s world etc
 This can act as creating jobs and tourist attractions
which are an added bonus to local communities
 Environmental projects (cleaning up parks or rivers,
reducing pollution etc.
 Open days (good for staff & community, often popular
with kids )
 Public speaking (providing professionals for specific
courses, etc)
Example: Patagonia outdoor
clothing
 P. have found interesting ways to couple their
products’ function & the brand’s environmental
values
Patagonia
 Business insights:
Turnover: $240 million
Core service: Manufacture of high quality outdoor
and adventure sport clothing
Employees: 1,200
Mission: Build the best product, cause no
unnecessary harm and use business to inspire and
implement solutions to the environmental crisis
 Inspired by adventures climbing in Yosemite and the
Patagonian Fitz Roy mountains, Patagonia was founded
by Yvon Chouinard in 1973. The company came to
Europe in 1987 with a store in Chamonix, the birthplace
of modern mountaineering.
 Patagonia makes clear links between their products and
the environment that the products help people enjoy, and
they say their company mission statement gives them
purpose and urgency.
Patagonia’s strategy
 “Since we began making clothing, we have seen popular
rock routes become irrevocably scarred by pitons; the
fouling of local rivers and the decimation of native fish
populations. We have seen the places we loved best
ruined by unchecked and irresponsible development. We
realised that we had to begin giving back to Mother
Nature before the wilderness we loved so much was
taken away altogether.”
Patagonia’s strategy
 The companies response to this has been to pledge
at least 1% of sales (or 10% pretax profits,
whichever is greater) to the protection and
restoration of the natural environment. In 2005, this
meant donations of US$2.1 million dollars, bringing
the total since 1984 to over US$20 million.
“Big, wild & connected”
 A campaign that champions environmental causes
world-wide
 In Europe, the company champions
environmental causes relevant to Europe, such
as:
 reducing truck pollution in the Alps; restoring
salmon and other sea-run fish to the Loire and its
tributaries; and campaigning to overturn the
current ban on the sale of traditional (non-GMO)
vegetable seeds.
AVIVA - CSR programme
 “For Aviva, corporate social responsibility (CSR) means
the management of our relations with our customers,
workforce, suppliers and the community as well as the
management of our performance in respect of the
environment, human rights, health and safety, all underpinned by the adherence to rigorous standards of
business conduct.
AVIVA CSR
 Aviva believes that CSR builds value for the business
and all its stakeholders. In particular, we believe that it
motivates our staff and that it is important to growing
numbers of our customers and shareholders. We also
believe that you cannot operate within a community - be
it global or local - without taking account of its major
challenges and playing your part in meeting those
challenges”
What do they do concretely?
 In 2005 Aviva invested over £5.7 million in
community initiatives worldwide, exceeding
2004 total by over £1 million. (0.014% is
given to CSR)
 This investment includes over 24,000 hours
volunteered across the group during 2005.
Aviva's global community
investment for 2005
Aviva’s activities
 Crime prevention (e.g. Neighbourhood apprentice
scheme & Friday night football scheme)
 Youth development and education (education
centres in Turkey & India for underprivileged kids)
 Disaster relief
 Promoting health & social welfare (Free medical
checks in 10 Polish cities)
 Staff volunteering (for various activities -staff
driven)