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Nature and concept of corporate social responsibility
Nature and concept of corporate social responsibility
Purpose of corporate social responsibility
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Introduction An organization’s Corporate Social Responsibility (CSR) drives them to look out for the different interests of society. Most business corporations undertake responsibility for the impact of their organizational pursuits and various activities on their customers, employees, shareholders, communities and the environment. With the high volume of general competition between different companies and organizations in varied fields, CSR has become a morally imperative commitment, more than one enforced by the law. Most organizations in the modern world willingly try to improve the general well-being of not only their employees, but also their families and the society as a whole. Being morally ethical helps an organization to become a …show more content…
As such, external social pressures to conduct business in a legal, moral and, ethical way, while helping the community around the organization is a major influence on the Code of Ethics and Business Conduct, as well as the Corporate Social Responsibility Report. In 2015, Wells Fargo unveiled their New Five-Year Corporate Social Responsibility Effort, which focuses on global economic, social, and environmental challenges over the next five years through their products and services, culture and operations, and philanthropy. As a part of this effort, Wells Fargo established its new CSR goals, including significant commitments in improving home and small business loans, community investment, operational efficiency, and corporate philanthropy, among other things, through …show more content…
The most recent reports of corporate social responsibility (CSR) of Well Fargo, is an example of how a massive bank can run an extensive sustainability program. One way in which Wells Fargo is showing its sustainability credentials is by becoming one of the more aggressive and creative lenders within the financial area. Times when banks were often hesitant to lend money to anyone, Wells Fargo claims to have invested more than US$37 billion in loans and investments within the clean technology and green building sectors, since 2012 — already crossing the company’s goal of US$30 billion in such investments by
The root of Wells Fargo’s ethical breakdown lies in the company’s overall ethical culture and climate that places too much emphasis on self-interest and on the teleopathic goal of generating the most sales
Corporate social responsibility (CSR) invaded the corporate world over the last few decades. This concept has become an essential need for competitive advantage unlike its original role as a nicety. The companies have seen the business benefit of the initiative and stakeholders have appreciated the initiative. This has led to the wide application in the firm’s operational agenda.
Wal-Mart, the corporate retail giant known for promising customers “Always low prices, Always!” has been both praised and attacked in regards of financial treatment to shareholders and stakeholders respectively. Investors that own shares of Wal-Mart are content with the company, as its decision to annually spend $7.6 billion to repurchase stock is seen as a strategic move in increasing shareholder wealth. On the other hand, Wal-Mart has received scrutiny for violating corporate social responsibility, in the waking trend of its employees earning wages below the poverty level and the impact this has on the economy.
In recent years, there has been a push for companies to look further than the traditional bottom line. While profit metrics such as net income seem to have some of the strongest reaction in the market, firms have now begun to see that their value should extend past that. As a KPMG report on corporate sustainability defined, “…corporate sustainability is defined as: ‘adopting business strategies that meet the needs of the enterprise and its stakeholders today while sustaining the resources, both human and natural, that will be needed in the future.” (pg.12) It shouldn’t be taken to mean that corporate sustainability is simply a “green”, or environmentally friendly, strategy. It encompasses more than the natural environment. Rather it creates long-term consumer and employee value by taking into consideration the social, economic, and cultural environment in which the firm operates. As more companies begin to adopt these sustainable business practices, studies are being released showing how positively significant the effects are on the firms earnings due to increased profitability and cost reductions. This paper will attempt to explain the overarching concept of sustainability, the widespread adoption of sustainable business practices, the effects on profitability for these firms, and finally the controllership function in directing this new revolution.
Commonwealth Bank of Australia is an Australia’s leading provider of integrated financial services. It is also one of the largest companies on the Australian Securities Exchanged and included in Morgan Stanley Capital Global Index. The vision of the company is to excel at securing and enhancing the financial wellbeing of people, business and communities. Commonwealth Bank of Australia know the importance to every party, they benchmark their progress against a number of leading global sustainability indices and surveys. Social Pillars
The corporate social responsibility is a commitment by a business to contribute to economic development while improving the quality of life for employees and their families’ as-well as contributing to the society. Walmart is a well-known company that offers customers the items they want and need at a low cost, with nearly 4,000 stores in the United States. According to the Fortune 500, Walmart was ranked number 1 in 2015. Just like any other superstore Walmart needs to continue the use of social responsibility by recreating a relationship between business and the community especially if they want to dominate the competition in 2016. The use of sustainability, strategic philanthropy, causing market, shared values, stakeholders and global perspective will help readers understand the purpose of social responsibilities in the corporate world.
Environment: The primary focus of corporate social responsibility is the environment. Both large and small financial institutions have a large carbon trail. Any steps they can take to reduce those trails are considered both good for the company and society as a whole.
In 2014, Bank of America established a Global CSR Committee in order to form a discussion concerning developing CSR matters raised by different stakeholders raging from advocates, regulators, and influencers. The committee works towards creating a more transparent and appropriate establishment for today’s world. In addition to that, the committee will work with different groups in order to achieve goals, such as Low Carbon Banking Group, the GWIM Environmental/Social/Governance Council, and the Global Diversity and Inclusion Council (“Bank of America Corporate,” 2013). II. BANK OF AMERICA’S FIVE CORE PRINCIPLES 1) Customer driven 2) Great place to work 3) Manage
Ethical Banking: an oxymoron or a change in banking practices required in the twenty first century? In the modern world, financial institutions are being held to strict regulation in a post Global Financial Crisis era yet financial institutions are still outlining their message of strong social responsibility. Is this all a façade or are financial institutions truly holding themselves to the strong message their claim? The pursuit of becoming a good corporate citizen and maintaining an ethical stance is becoming increasingly expensive for businesses worldwide, through issues such as sweatshops, child labour and environmental destruction. As one of Australia’s largest and most powerful financial institutions, the Australian New Zealand Bank (ANZ) stated its “committed to achieving outstanding performance and results to provide value to our shareholders, while considering the interests of employees, customers, the community and others with whom we do business” in Code of Conduct & Ethics(2013, pg. 10). ANZ’s focus on Corporate Social Responsibility (CSR) has come under fire of late due to issues relating to unethical loans and interest rate manipulation in Singapore (Yeates 2013). Banking institutions, much like many global companies, use CSR for many differing reason as a strategic ploy. From this institutions aim to create an equilibrium between the level of resources used in CSR and returns for shareholders .This paper aims to investigate and compare the level of corporate social responsibility and internal ethics in which ANZ claims it holds in high regard with its actual performance, as well look at the wider banking industry choices in relation to the application of CSR and exploring the link and benefit associated with CSR...
Companies with CSR initiatives have better access to finance in capital markets that is essential for firms to produce goods and generate profits. Earlier study by Mcguire, Sundgren and Schneeweis (1988) reports that contributions to the environment and society are an important factor when banks and institutional investors are evaluating investment opportunities. Moreover, enterprises pursuing CSR practices tend to widely publicize their socially responsible behavior and thus become more transparent and understandable. Higher levels of transparency minimize the asymmetric information between the company and investors so investors become less aware of the risks associated with the investment projects (Cheng, Ioannou, & Serafeim, 2014). Consequently, more s...
The discipline is synthesised as a corporation’s obligation to contribute to the welfare of the society as well as the organisation (Daft et al., 2010:134). Briefly, CSR encompasses corporate practices that operationalise the relationships with and impacts on stakeholders and the environment (Waddock, 2004:9). While the perspective entails voluntariness (CEC, 2001), there is an established business case for CSR.
While the concept of an individual having responsibility is commonly recognized, modern views have lead to the emerging issue of corporate responsibility. Business Directory.com defines corporate social responsibility as, “A company’s sense of responsibility towards the community and environment (both ecological and social) in which it operates. Companies express this citizenship (1) through their waste and pollution reduction processes, (2) by contributing educational and social programs, and (3) by earning adequate returns on the employed resources.” But such a concept has been much disputed since at least the 1970’s.
The sufficiency of mounting logical CSR initiatives in the telecommunication industry is reflected in the achievement of certain institutions rising from the newest financial crisis. For example, Spanish banks that operate internationally, such as Santander or BBVA, at present center their CSR initiatives on microfinance and on customers’ financial education (Pérez and Rodríguez del Bosque, 2012a). These activities are extremely matching with their corporate characters, which are leaning to the growth of the society in all countries anywhere they function by means of education, which is the mainly helpful means to donate to social development. For example, Santander’s CSR agenda is dedicated to building tough alliances with universities through the Santander Universities programme. At the sometime, these CSR orientations are correctly incorporated into the corporate strategy and add to corporate financial goals. For instance, focusing on customer financial education can widen marketable
In the changing environment, businesses need to show the responsibilities among community. There are many social problems around the world which needs attention and the society also have expectations from the companies to solve it together by using the resources in an effective way (Gigauri, 2012, pp. 207-211). Since long, most of the companies are practicing CSR to contribute to the environment and society as their broad goal. The success of the companies also depend on the community and environment as the company’s operations also have impacts on society and environment. The companies are refocusing on their CSR activities and it is the demand by the society to show the sustainability and responsibility in company’s operations and activities (Rangan , Chase, & Karim, 2015).
Once that is measured, everything from the amount of electricity that is being used to what vendors the bank is dealing with. For example, there are labourers who work in the office, the bank needs to make sure it’s coming from an ethical vendor and making sure that they’re actually paying their staff and that they have proper housing. This is our responsibility as a customer to another vendor. The bank has a huge buying power and the bank is responsible for that. That is why, companies need to adopt CSR. Giving back to the community, that’s part of the culture that the bank presents. But CSR is very separate and it needs to be conducted to make sure we don’t make the world worse off than it is, meanwhile making