Corporate Social Responsibility is a management concept whereby companies integrate social and environmental concerns in their business operations and interactions with their stakeholders.
CSR is generally understood as being the way through which a company achieves a balance of economic, environmental and social imperatives (“Triple-Bottom-Line- Approach”), while at the same time addressing the expectations of shareholders and stakeholders.
In this sense it is important to draw a distinction between CSR, which can be a strategic business management concept, and charity, sponsorships or philanthropy.
Even though the latter can also make a valuable contribution to poverty reduction, will directly enhance the reputation of a company and strengthen its brand, the concept of CSR clearly goes beyond that.
Promoting the uptake of CSR amongst SMEs requires approaches that fit the respective needs and capacities of these businesses, and do not adversely affect their economic viability.
UNIDO based its CSR programme on the Triple Bottom Line (TBL) Approach, which has proven to be a successful tool for SMEs in the developing countries to assist them in meeting social and environmental standards without compromising their competitiveness.
The TBL approach is used as a framework for measuring and reporting corporate performance against economic, social and environmental performance.
It is an attempt to align private enterprises to the goal of sustainable global development by providing them with a more comprehensive set of working objectives than just profit alone.
The perspective taken is that for an organization to be sustainable, it must be financially secure, minimize (or ideally eliminate) its negative environmental impacts and act in conformity with societal expectations.
Key CSR issues: environmental management, eco-efficiency, responsible sourcing, stakeholder engagement, labour standards and working conditions, employee and community relations, social equity, gender balance, human rights, good governance, and anti-corruption measures.
A properly implemented CSR concept can bring along a variety of competitive advantages, such as enhanced access to capital and markets, increased sales and profits, operational cost savings, improved productivity and quality, efficient human resource base, improved brand image and reputation, enhanced customer loyalty, better decision making and risk management processes.
Corporate social responsibility for market integration
In recent years, increasing attention has been given to the concept of Corporate Social Responsibility (CSR), defined in terms of the responsiveness of businesses to stakeholders’ legal, ethical, social and environmental expectations.
CSR has generally been a pragmatic response to consumer and civil society pressures. These have mainly been focused on trans-national corporations (TNCs) serving markets in the North, but often operating in countries in the South.
Accusations by governments and civil society of environmental pollution, human rights abuses and exploitation of labour in supply chains, have pressured companies to become more environmentally and socially responsible.
However, the business community has also quickly recognized the strategic value of being more responsible and is beginning to align products and business relationships, in particular through their supply chains, accordingly.
Ensuring that CSR supports, and does not undermine, the development of small and medium-sized enterprises (SMEs) in developing countries is crucial to meeting the goal of improving the impact of business on society.
SMEs make up more than 90% of all businesses worldwide and are essential to the ‘path out of poverty’ for many developing countries.
If CSR demands are protectionist, culturally…