Dictionary of Corporate Social Responsibility

AA 1000 is based on the AccountAbility 1000 standards that consist of AA 1000 Accountability Principles (APS), AA 1000 Assurance Standard (AS) and AA 1000 Stakeholder Engagement Standard (SES).

Initiated almost 20 years ago by Robert Kaplan and David Norton (and further developed by their Palladium Group team), Balanced Scorecard measures organizational performance in four ‘balanced’ perspectives:

First published in 1992 the Cadbury Report is a report of “The Committee of Financial Aspects of Corporate Governance” led by Sir Adrian Cadbury [1]. This report attempts to address the Corporate Governance excesses and failures of the time and sets courses for best practices in the context of Corporate Governance.

The growing importance of social responsibility activities of businesses and their growing interaction with all stakeholders in society reveals that there is an enormous amount of data to handle. Data refers to unidentified stored facts by an entity which in simple terms means information [1]. Information is basically the new piece of facts which have the potential of adding value to the business and therefore data protection is an important issue in the information age that we operate in. The protection of data is the implementation of administrative, technical, or physical measures to guard against unauthorized access to data. Many companies today gather and store data for marketing and other purposes [2]. They collect as much information as possible about their customers in the name of targeting products more effectively in order to increase their revenue. Information transparency and information protection are two requirements that are desirable in the attempt to ensure that society operate sustainably and in a socially responsible manner.

The 1992 United Nations Conference on Environment and Development, which took place in Rio de Janeiro from 3 to 14 June 1992, is more succinctly referred to as the Earth Summit. It provided an international platform for the discussion by various stakeholders of the environment and sustainable development. In all, 172 nations were represented, 108 of them by heads of state or governments. The Business Council for Sustainable Development, a group of top business executives interested in the environment, voiced business concerns. Non-governmental organizations sent about 2,400 representatives and organized a parallel event, the Global Forum, which attracted 17,000 persons. In addition, almost 10,000 journalists were present [1].

These so-called factor concepts provide a discussion basis for a more future-proof world through heightened resource efficiency. The opener was Factor Four in 1998, which acknowledged sustainability as an overriding imperative for the future and argued that at least four times as much wealth could be extracted from the existing resources [1]. Like Limits to Growth of 1972, opening a discussion about finite resources and of global interdependencies, Factor Four also is a report to the Club of Rome. It points to solutions through resource productivity as technological leitmotif.

The development of biotechnology has extended to the point of raising questions and concerns ranging from the economic gain to consumer safety and society response to environmental issues.

The Hampel Report is a report on corporate governance published in the United Kingdom in January 1998. Following the publication of the Cadbury Report in 1992 and the Greenbury Report in 1995, the Hampel Committee was established with the purpose of reviewing the implementation of the recommendations of the Cadbury and Greenbury reports. The committee itself was established in November 1995 on the initiative of Sir Sydney Lipworth, Chairman of the Financial Reporting Council, and was led by Ronnie Hampel, CEO of the International Stadia Group at this time. The Hampel Report later became part of the basis for the Combined Code.

Implementation is a basic concept that discriminates between intentions, plans and norms on one side and actual reality and outcomes on the other side: implementation is the whole process that describes what happens between intentions and outcomes. The subtitle of the basic book on this subject is most telling: “How Great Expectations in Washington Are Dashed in Oakland [2]. Applying the concept of implementation to CSR implies that statements of intent have little meaning within the realm of CSR and CSR reporting. What matters is the implementation of actions and policies. On a theoretical plane, implementation is a practical way to talk about the difference between normative and positive behavior. For example, crimes occur in companies with a strict code of ethics. Implementation teaches us that we should not be scandalized because codes of ethics are in the normative sphere while we should be looking as close to reality as possible through measures of impact and outcome. Implementation is the value that best describes the degree of influence of the managerial paradigm in the agenda setting and general discourse in modern societies. Modern societies are studied and influenced through three large scale areas of investigation or paradigms: political science, law and the managerial paradigm, including at least economics, sociology and the specific managerial sciences such as marketing, and public relations. Looking at modern societies at large and how little implementation and outcomes are taken into account, it can be realized how the managerial paradigm is squeezed between politics and law. Finally, implementation can be part of a process framework for managing and reporting about CSR. Such a framework would include attention to the disclosure of organizational issues, to individual responsibilities within the organization (ethics) and the stewardship of unaware stakeholders (“unknown” stakeholders) [1].

The Johannesburg Declaration is a result of the World Summit on Sustainable Development (WSSD)—sometimes named Earth Summit 2002—in Johannesburg, South Africa. The Johannesburg Declaration is built on the earlier declarations from the United Nations Conference on the Human Environment, Stockholm (1972) and the Earth Summit in Rio de Janeiro (Rio Declaration 1992). It includes the progress made in committing nations to sustainable development, but with a special focus on eradicating poverty and proposing new mechanisms for international cooperation and multilateralism.

KPIs can be quantitative or qualitative measures of organisational performance. The former include inputs and outputs often relating to financial data and numerical analysis such as numbers of scholarships awarded, safety records, new buildings, inoculations and emissions. By comparison, qualitative measures focus upon relationships, feedback and outcomes such as quality of life issues.

Leadership is the process of influencing others to work willingly towards an organisation’s goal to the best of their capabilities. Koontz et al. (1986) explain that “[t]he essence of leadership is followership. In other words it is the willingness of people to follow that makes a person a leader” [1].

The MacBride Principles—consisting of nine fair employment principles—are a corporate code of conduct for U.S. Companies doing business in Northern Ireland.

Natural capital is all formations of the Earth’s biosphere that provide humans with ecosystem goods and services imperative for survival and well-being. Furthermore, it is the basis for all human economic activity. So, the world's economy could be seen within the larger economy of natural resources and ecosystem services that sustain humanity. In this way, natural capital is an extension of the economic notion of capital (manufactured means of production) to goods and services relating to the natural environment. More than that, the specialists consider that the “next industrial revolution” depends on the espousal of four central strategies linked to natural capital: the conservation of resources through more effective manufacturing processes, the reuse of materials as found in natural systems, a change in values from quantity to quality, and investing in natural capital, or restoring and sustaining natural resources [1].

Occupational safety and health (OSH) is a discipline dealing with the prevention of work-related injuries and diseases as well as the protection and promotion of the health of workers. OSH aims at the improvement of working conditions and environment. Occupational health involves the promotion and maintenance of the highest degree of physical and mental health and social welfare of workers in all occupations [1].

Participation in social science refers to different mechanisms for the people to express opinions, and ideally and effectively exert influence—regarding political, economic, management or other social decisions. As opposed to autocratic ways, participation is defined as the engagement and involvement of the people or employees in the organization’s processes such as problem-solving and decision-making. When participating, employees can express their viewpoints, contributing their ideas and giving their inputs or feedback to their superiors as well as giving suggestions for improvements.

We can identify two traditions within the Quality Movement, concerned with Compliance and Empowerment.

Rainforest Action Network (RAN) is an organization founded in 1985 to work for the protection of rainforests and the human rights of those living in and around those forests. According to the RAN website, their mission statement is to campaign “for the forests, their inhabitants and the natural systems that sustain life by transforming the global marketplace through education, grassroots organizing and non-violent direct action”. Moreover, according to the same source, their “campaigns leverage public opinion and consumer pressure to turn the public stigma of environmental destruction into a business nightmare for any American company that refuses to adopt responsible environmental policies” [1].

Sanpoyoshi is a Japanese term which means “in three ways” or “for all three parties” (Sanpo) and “to be good” or “equally beneficial” (Yoshi). The term has also recently been translated into English as the “Triple Win Principle.” [1].

Considering, for example, Carroll’s influential view of corporate social responsibility (CSR) as encompassing the economic, legal, ethical, and discretionary responsibilities that a firm has to its stakeholders [1], it is not difficult to establish connections between taxation and CSR, albeit conflicting ones. From the economical perspective, the reduction of a company’s tax burden improves its profitability and increases shareholder wealth. From the society’s point of view, taxes are indispensable in supporting governmental social programs (such as education, public health care, public transport, among many others). Hence, from a broad CSR perspective, the tax strategy of a corporation can be viewed either positively or negatively.

UL Environment 880—Sustainability for Manufacturing Organizations is a sustainability standard for businesses and other organizations, focusing on their environmental and social performance. This standard is the result of the cooperation between Underwriters Laboratory, a global independent safety science company [1], with more than 100 years of expertise in creating safer living and working environments where businesses flourish. There are four other related domains—Product Safety, Life and Health, Verification Services and Knowledge Services), and GreenBiz Group, a leader in corporate sustainability media, corporate sustainability leadership and reporting [2].

There are different notions of what “value” is and means and this is deeply related to its intrinsic content and meta-disciplinary nature. One of the fundamental characteristics of value is that it presents different facets in relation to different points of view and to different contexts: in a word, its versatility. The concept of value has invested and continues to invest the interest of many scholars from different disciplines, especially for the various connotations that it may take and the complexity of its theoretical settlement. Philosophers, economists and, more recently, sociologists and psychologists have referred to “value” with very different approaches and meanings. This has caused some problems related to their lack of agreement about its meaning. A study of the literature reveals a lot of variations of the value concept, for example, in accounting literature the word “value” is often used with a meaning of “quantity”, without giving adequate space to the “quality” aspect of the same concept.

The global financial crisis which emerged in 2007 badly damaged the global economy and brought the global financial markets to their knees. Many UK Banks were heavily affected by the crisis—Northern Rock Bank collapsed in 2007, in 2008 the Royal Bank of Scotland was virtually nationalized by the Labour Government to save it from going down. The government also acquired a majority stake in Lloyds TSB Bank after Lloyds had agreed to take over Halifax Bank of Scotland. It became apparent that there were many governance related problems in these banks. As a result, Sir David Walker—the Chairman of the Walker Review Committee of Corporate Governance in the UK Banks and Financial Services Industry was asked to review governance issues in UK FTSE 100 banks and insurance companies. The Walker Committee was commissioned by the HM Treasury to conduct a review of and recommend measures to improve corporate governance in UK banks with particular regard to the issue of risk management.

X-efficiency [1] is a strand of thought that challenges the maximizing approach to economic behavior. The key maximizing approach to economic behavior is neo-classical micro-economics which assumes corporations as profit maximizers. Mainstream CSR—also known as triple bottom line reporting—embraces the micro-economic profit maximizing paradigm and it assumes the core business of corporations as fully captured in their economic bottom line and fully accounted for through their financial statements. X-efficiency allows for a non specified and non optimized rate of work effort in the core business of corporations and all other organizations. Thus is allows for a variety of outcomes of core business activity. Such outcomes appear to be less deterministic than those produced under the profit maximizing paradigm. X-efficiency measures organizational performance through benchmarking and organizational multiplicity or competition. There is no maximization, only comparison can tell what the level of effort is and what the core business outcomes can be.X-efficiency is relevant to mainstream CSR because it challenges the deterministic approach mainstream CSR takes to the economic bottom line under the profit maximizing paradigm. X-efficiency shows that the economic bottom line is not deterministic; therefore, there is freedom in the organization to obtain a viable bottom line and that freedom leads to responsibility. Such responsibility should be accounted for beyond the financial statements because X-efficiency tells us that financial statements can be obtained in many different ways. Financial statements themselves are non deterministic once profit making becomes only one of the many possibilities and combinations of outcomes from organizational activities.