Benefiting stakeholders with corporate social responsibility

The meaning and content of corporate social responsibility (CSR), maintained by companies to give back to society and create social value, have developed and changed over the years in their direction, and now the programmes reach different beneficiaries.

What simply used to be a platform of charitable or philanthropic giving to support the needy, such as old people or children who could not go to school, the sick or disabled and the arts and music, today is strictly aligned with a company’s core business and strategy, and primarily seeks to benefit its stakeholders.

“The best companies, when they try to address social or environmental issues, they make it core to their core business strategy,” says Ioannis Ioannou, assistant professor of strategy and entrepreneurship, London Business School.

In this sense, the main objective of CSR now is too look at where the company makes the largest impact on society or on the environment and how its stakeholders are affected, and create a programme with corporate governance and compliance in mind.

For example, an oil company would look for ways to reduce its large carbon footprint caused by its CO2 emissions, an apparel company could look at excessive overtime or fair wages for their workers and a bank could work on financial inclusion programmes for the community.

How does it work? Marriott International, a large hotel chain with a sizable and fast-growing presence in China, established that water is one important natural resource hotels use in great volume. Therefore, in 2010 they launched a water conservation programme in Sichuan at a value of half a million US dollars to safeguard the source of clean water, while also making steps to reduce water consumption in their hotels.