Countries / Territories

Corporate Social Responsibility

  • More than tick marks on a checklist


    "A business that makes nothing but money is a poor business” – Henry Ford

    The world is getting richer, healthier, better educated, better connected, and people are living longer. Yet half the world is potentially unstable with the gap between the rich and poor widening. Improved decision making as individuals, groups, nations, institutions and companies can bring positive results and multiply benefits for the society. In this millennium which is characterized by exponential growth, technological achievements that seem like science-fiction, if economic gains fail to reach most sections of the population, or is at the detriment of the vulnerable and disadvantaged, it puts to question the very basis of such growth.

    The Millennium Development Goals (MDGs) are the most successful global anti-poverty push in history. It is for this reason, the United Nations Millennium Campaign, which started in 2002, supports and inspires people from around the world to take action in support of the Millennium Development Goals. The MDGs represent a partnership between all nations to create an environment — at the national and global levels alike — which is conducive to development and the elimination of poverty. Combined efforts of all, governments, civil society organizations and the private sector are important to reduce poverty, improve well-being and environmental sustainability. The Sustainable Development Goals, currently under negotiation at the United Nations under the post-2015 development agenda are intended to guide priorities both for the development needed in the developing countries and for the sustainability transition needed throughout the world over the next 15 years. Among other requirements, it has been mandated that the goals should achieve an appropriate balance between the economic, social and environmental dimensions of sustainable development.

    In this context, the UN Global Compact (www.unglobalcompact.org) is a strategic policy initiative for businesses that are committed to aligning their operations and strategies with ten universally accepted principles in the areas of human rights, labour, environment and anti-corruption. By doing so, business, as a primary driver of globalization, can help ensure that markets, commerce, technology and finance advance in ways that simultaneously benefit economies and societies through long-term “value creation”.

    Competitiveness and corporate social responsibility are linked

    With this increasing realization that the gains from economic development need to reduce inequalities and play a key role in social development and poverty reduction, the performance of an organization in relation to the society in which it operates and to its impact on the environment has become a critical part of measuring its overall performance and its ability to continue operations effectively. Due to the global nature of trade, improved connectivity and advancements in communications and technologies, there is high awareness and realization, specially among customers in advanced economies who want to know not only the quality and safety of the products or services they are buying, but also who are supplying these, how they are operating. In particular, with the challenges of global warming and climate change and the need for social accountability, customers need to be reassured as regards the impact of the supplier on the environment and on society at large.

    People and organizations are socially responsible if they behave ethically and with sensitivity toward social, cultural, economic and environmental issues. Social responsibility helps individuals, organizations and governments have a positive impact on development, business and society with a positive contribution to bottom-line results. Creating shared value, not just for profit per se is foreseen to drive the next wave of innovation growth in the global economy.

    A Gallup MetaSurvey on employee engagement finds 90% of employees are looking for a higher purpose at work.

    Every enterprise is located within a socio-economic context where returns from human ingenuity, innovation, reputation, trust, credibility, and other intangible assets accrue results. For small and medium-sized enterprises (SMEs), which are traditionally closer to their clients and more ingrained within the communities in which they operate, ethical practices, minimizing environmental impact, and ensuring fair and transparent processes beneficial to all stakeholders can be a significant competitive edge. SMEs often function responsibly and beneficially, but do not know how to use the potential of responsibility to their advantage! There exist a number of firms, that enjoy the good will and trust of the communities in which these firms are rooted, stemming from good practices of the firm and benefits to those communities.

    Research based on the responses of 173 business executives from companies with between 100 and 5,000 employees in the United States, finds that making a difference in the community is the top reason for SMEs owners to start a business. [1]

    To many small enterprises, specially in developing countries, which are faced with the day-to-day challenges of running their business and overcoming operational constraints, the concept and ideas related to social responsibility may seem far-fetched. Related efforts may seem primarily linked to brand and image building activities of larger firms, or those from countries, who can afford the related resources. However, social responsibility of organizations is more than a “fashionable” concept or an intent for posturing. It is an orientation and a set of practices that an organization adopts as part of its overall strategy to perform its mission effectively while maximizing returns for the society at large, an approach of responsible competitiveness.

    ISO 26000 defines social responsibility as “the responsibility of an organization for the impact of its decisions and activities on society and the environment, through transparent and ethical behaviour that:


    • is consistent with sustainable development and the welfare of society;
    • takes into account the expectations of stakeholders;
    • is in compliance with applicable law and consistent with international norms and behaviour; and
    • is integrated throughout the organization and practice in its relationships.

    “ISO 26000: 2010, Guidance on Social Responsibility” is a first attempt to harmonise the socially responsible behaviour of enterprises at international level. It is to be noted that ISO 26000 is neither a “management system standard” nor a “management standard”. It is not for certification, contractual or regulatory use. ISO 26000 is a “guidance standard” that offers orientation and recommendations on how to enhance responsible behaviour towards society.

    The ITC Export Quality bulletin No. 90 gives a clear overview of ISO 26000 and social responsibility.

    Everyone benefits from a better world

    The potential benefits from operating in a socially responsible manner include:

    • Competitive edge: Strengthens an organization’s value proposition vis-à-vis competitors.
    • Risk management: Better decision making, knowledge of risks, and risk management.
    • Savings: From increased efficiency of resource allocation, decreased waste, and reuse of by-products.
    • Respect, trust and strong reputation: Helps establish a good relationship with companies, governments, the media, suppliers, peers, customers and the community.
    • Loyalty: Ability to attract and retain workers or members, customers, clients or users.
    • Engagement: Maintenance of employees’ morale, commitment and productivity.
    • Positive stakeholder relationships: Harmonizing the views of investors, owners, donors, sponsors and the financial community.
    • Reliability: Reliability and fairness in transactions, fair trade, and absence of corruption.
    • Improved viability: Long-term viability through sustainable natural resources and environmental services.

    To understand more about ISO 26000, consult ITC’s Quality for Trade Bulletin: An Introduction to Social Responsibility available here.

    [1]Source: BusinessNewsDaily, Small Business Owners See Value of Social Responsibility, David Mielach, April 10, 2013.