Corporate social responsibility (CSR) is a strategic tool that enables companies to improve their competitiveness and develop their businesses. The key issue is understanding what CSR means in practice and how to demonstrate it. Although compliance with laws and international standards is the starting point in this respect, stakeholders increasingly require that companies fulfill their responsibilities as extensively as possible.
Aalto PRO helps firms to build socially, ecologically and economically sustainable businesses. Leading experts from Aalto University and other top universities in the discipline, as well as some of the business world’s key companies, are at our disposal. We organized our first environmental training program in 2004 and it is just renewed to cover responsibility more broadly.
Responsible business is a strategic tool
A survey by the Association for Finnish Work indicates that 88 per cent of Finns appreciate companies that benefit society through their business activities. More than 60 percent of people state that they try to include an ethical dimension in their choices as often as possible.
Corporate social responsibility (CSR) is an increasingly important success factor for businesses."
CSR is a strategic tool that enables companies to increase their competitiveness, meet the challenges of sustainable development and develop their businesses. It is an increasingly important success factor, whose various areas complement one another. The key issue is understanding what CSR means to a business in practice, and how to demonstrate it.
Although compliance with laws and international standards is the starting point in this respect, stakeholders increasingly require that companies fulfill their economic, social and environmental responsibilities as extensively as possible.
Companies are solving global challenges
Corporate social responsibility (CSR) is also essential from the point of view of society. Companies are playing a key role in meeting global economic and social challenges, and solving environmental problems. For example, the best way of handling the mitigation of and adaptation to climate change, scarcity of resources and promotion of the circular economy is to invest in new, environmental-friendly technologies. In the best case scenario, CSR is directly reflected in people's everyday lives and the state of the environment.
Responsible companies are desired partners
Responsible values make companies into reliable and desirable partners. Making choices that build a sustainable future is vital to both businesses and society. The earlier the stage at which a business is built on a sustainable basis, the more stable its future will appear.
CSR is integral to the business competencies of a successful company. A socially responsible company works in the most sustainable manner possible and reconciles its goals and expectations with those of its stakeholders. Regardless of its size and sector, any company can harness corporate social responsibility as a strategic competitive advantage, by responding to the challenge of sustainable development. CSR is also part of good leadership.
Competitiveness and corporate social responsibility (CSR)
CSR fosters innovation, enhances risk management, enables sustainable growth and helps to safeguard a business's long-term prospects. A company needs to operate in an ecologically, socially and economically sustainable manner to be profitable, competitive, dynamic and prosperous in the long term. A company of this kind continuously improves its resource efficiency and minimizes the negative environmental impacts of its operations. It behaves responsibly towards its stakeholders, while its motivated and continuously evolving personnel are a source of strength.
CSR is being evaluated from an ever more holistic and comprehensive perspective. Environmental impacts are being examined across the entire lifecycle, from product development to recycling. Subcontractors are also coming under the spotlight in terms of supply chain responsibility.
CSR provides a competitive edge when a company offers something that competitors do not and exceeds statutory requirements. It is the best starting point for finding new business opportunities: more and more companies are growing their business by creating shared value, i.e. by innovating to build profitable solutions which solve societal problems.
Corporate social responsibility (CSR) begins with management
CSR concerns the entire organization. It should also be considered in terms of a company’s performance and strategy and put into practice in business activities. That is why those managing CSR issues need a strong line of communication with all parts of the company and senior management must understand the importance of the issue.
Instead of corporate social responsibility, we often refer to sustainable development, which is a broader concept. CSR has traditionally been viewed as addressing social and economic issues, as well as the environment.
Supply chain responsibility
In a global networked business, corporate social responsibility does not stop at the door of your own organization. A responsible company is also aware of the working conditions of its subcontractors and makes decisions on the basis of such information. Account should therefore be taken of CSR throughout a company’s supply chain. This is about identifying opportunities as well as minimizing risks. Within supply chains, properly designed social and environmental responsibility measures can be a source of competitiveness and cost savings, as well as improving a firm’s corporate image.
As supply chains grow, stakeholders are applying mounting pressure for CSR to be exercised across entire chains. Such pressure has a particular focus on social responsibility issues, such as the use of child labor. Social responsibility is also becoming a focus area as environmental legislation approaches the point of maturity. Although international agreements have been reached on social responsibility, compliance with them is voluntary.
Supply chain responsibility is being embodied in issues such as green purchasing criteria, various standards and regulations, and legislation, life cycle management, material choices and CSR certificates.
Social responsibility indicators and reporting
When developing an organization's activities – whether quality, environmental performance or corporate security – it is important to define indicators for core processes, evaluate various cause and effect relationships and analyze the results for decision-making purposes. An environmental accounting function helps organizations to report on the environmental burden they create and enables operational reviews with regard to environmental performance.