Target Social Responsibility

This report summarizes the results of a review of Target Corporation’s sense of social responsibility as discerned by examining three areas: ethics, social responsibility, and environmental sustainability practices. It presents an overview of Target’s historical and ongoing corporate social responsibility (CSR) efforts, and an evaluation of Target’s CSR efforts based on the corporation's policy, performance stated objectives, key performance measures, and select peers. The report includes recommendations for improvement as well as measures for evaluating improvement. The sources of Target’s policy and performance results are its corporate governance documents and corporate reporting.

Keywords: Target, Target Corp., corporate social responsibility,

CSR, ethics, environmental sustainability, social responsibility, retailer, big-box store

This paper provides the results of the review of Target’s CSR. It answers four principal questions in summary form and makes recommendations for improvement. The first question and its answer relates to a definition of CSR, explains Target’s policy and identifies linkages of policy to strategy as reflected in corporate objectives. The second provides an overview of Target’s CSR efforts both past and present. The third evaluates Target’s CSR efforts using Target’s stated objectives, considers the correlation with key performance measures, and compares Target with select members of its peer group. The fourth question and its answer, consider what Target can accomplish to improve its CSR practices, with the answer taking the form of recommendations for improvement.
Corporate Social Responsibility
At a minimum, a corporation produces goods or services while employing people and resources in order to maximize profits and shareholder directives (Lau & Johnson, 2012). The Merriam-Webster dictionary defines society as “a community, nation, or broad grouping of people having common traditions, institutions, and collective activities and interests.” For an individual, being socially responsible runs the gamut of “do no harm” to dedicating 100% of their time and money to a cause which seeks to benefit society. For instance, most people understand the need to get along with one another and, at a minimum, follow the “do no harm” doctrine (Hartman, DesJardin & MacDonald, 2008). Consequently, failure to do so has appalling outcomes, the best example being the Holocaust.
As Johnson (2003) describes, by its sheer existence, companies participate within society in a variety of ways. For example, they provide individuals with a purpose and pay them for their labor. Many corporations utilize resources which benefit other companies who also participate in society. Additionally, they produce a product or service that fulfills a need for individuals or other enterprises. Therefore, it stands to reason that corporations also have social responsibilities, the same as individuals.
“A standard definition of CSR is that it is about sacrificing profits in the social interest. For there to be a sacrifice, the firm must go beyond its legal and contractual obligations, on a voluntary basis” (Benabou & Tirole, 2010). Accordingly, the extent to which a corporation might seek to fulfill its social responsibility may include policies to ensure the impact on the environment is minimal, providing a safe and ethical workplace, and supporting charitable causes such as the arts (Benabou & Tirole, 2010).
Target’s Corporate Social Responsibility
Target’s CSR efforts began in 1946 when they started donating 5% of all its profits to various charities and to its stores’ respective communities (Rogers, 2015).

This trend still endures to this era with its impact on various areas. For that reason, the company has been escalating and documenting its CSR endeavors for the past several years, progressively increasing its strengths to offset any weakness (Lougee & Wallace, 2008). Target’s policy and practices related to ethics, social responsibility, and environmental sustainability provide an opportunity to get an indication of how it determines and fulfills such obligations, as well as the company’s voluntary self-reporting and corporate communications include a substantial amount of material that can be

evaluated.
Ethics
The Chairman and CEO established expectations for the conduct of employees at Target in a signed message published in its Business Conduct Guide and co-signed by the Risk and Compliance Officer. Any apprehension that the guide may not apply to everyone is allayed by the “About the Guide” section which states it applies to “every one of us, at every level, in every location, from our newest cart attendant to our board members” (Target, 2016, p 4). Also, the guide focuses on integrity and high ethical standards as part of the organization’s culture. Additionally, the guide identifies that doing “the right thing the right ways” as a foundational belief of the company and emphasizes that it remains a standard for the Target team (Target, 2016, pp 2, 5). The guide also provides direction for Target team members in attaining answers to questions or additional information, get help with related resources, and how to communicate with the risk and compliance team (Target, 2016, p 7). According to Target (2015), its CSR Report also expresses a commitment to compliance and ethics and encourages the 24-hour anonymous reporting of ethical concerns via an “integrity hotline” to a dedicated corporate compliance and ethics team (p 39). An internal ethics and integrity website, www.TargetIntergrityHotline.com, is referred to as a source for additional resources and method of confidential reporting at twenty places in the guide (Target, 2015, pp 7, 9-11, 21-25, 32-33). Additionally, the site is also referred to in the CSR report (Target, 2015, p 33). In summary, a written code of ethics and standards is in place, as well as a system of confidential reporting (Target, 2016, pp 4, 7; Target, 2015, p 33).
Social Responsibility
Target’s management believes it can “fuel Target’s growth, improve people’s lives and make a sustainable difference in the world” (Target, 2015, p 2). Accordingly, Target’s (2015) CSR report emphasizes its sense of community, stewardship, and responsibility by focusing on such areas as wellness (of guests, team members, and communities), sustainability of its products and business operations, inclusiveness, and community investment (p 2). Furthermore, Target’s management states its “performance as a company is intrinsically linked to the health and vitality of the communities” where its team lives and works (Target, 2015, p 1). For that reason, Target contributes 5% of its profits back to local communities and has done so for seventy years (Target, 2015, p 1). In its 2015 CSR report, Target reported on the progress towards achieving its twenty corporate social responsibility goals it established in 2010. Progress was presented in easy to read graphics spread over seven pages of the forty-five-page report with goals for the future under development and to be released (Target, 2015, pp 4-10, 10).
Evidence of Target self-evaluating it's social responsibility performance may be inferred from the bookkeeping associated with its philanthropic donations to local communities, metrics associated with CSR goals, Target’s Sustainable Product Index [developed in 2013], and its section of the CSR based on the Global Reporting Initiative (GRI) G4 Index standard. Neither the latter section’s length at 14 pages nor its details are insignificant (Target, 2014; Target, 2015, pp 30-43; GRI, n.d.).
Environmental Sustainability
In its 2013 Corporate Responsibility report, Target identified the five primary organizational activities in its value chain as: “design, produce, ship, sell, and use & reuse” (Target, 2013, p 9).

As part of its discussion of sustainability in that report, Target identified four commitments to sustainability: “sustainable living, sustainable products, smart development, and efficient operations” (Target, 2013, p 13).Sustainability is part of Target’s corporate social responsibility strategy, as demonstrated by ten of its twenty corporate social responsibility goals being bound to sustainability. Two examples of these goals are, “increase ENERGY STAR® certifications” and “reduce waste” (Target, 2015, pp 4-5). As a result, Target introduced its Sustainable Product Index in 2013 “to help establish a common language, definition, and process for qualifying what makes a product more sustainable” (Target,

n.d.b).
Target’s business practices include working with the National Resources Defense Council (NRDC), Sustainable Apparel Coalition (SAC), and the World Resources Institute (WRI). Target is partnering with the NRDC on the NRDC’s Clean by Design Initiative to reduce manufacturing’s environmental effects. Additionally, Target was a founding member of the SAC, which developed the Higg Index as an environmental and social sustainability self-assessment standard. As a result, Target uses the Higg Index as part of its vendors’ annual scorecards and is working with SAC members on the launch of the Higgs Index 2.0. Target also partnered with the WRI as one of the road test companies of WRI’s sustainability, Strengths, Weaknesses, Opportunities and Threats (sSWOT) framework, which aids in the evaluation of sustainability efforts. (Target, n.d.a; Metzger, Putt del Pino, Prowitt, & Goodward, 2012, p 3)