Requirements of the Companies

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Michael Hopkins (2005) defines Corporate Social Responsibility as “CSR is concerned with treating the stakeholders of the firm ethically or in a responsible manner. ‘Ethically or responsible’ means, treating key stakeholders in a manner deemed acceptable in civilised societies. Social includes economic and environmental responsibility.

Stakeholders exist both within a firm and outside. The wider aim of social responsibility is to create higher and higher standards of living, while preserving the profitability of the corporation, for peoples both within and outside the corporation”The expectations of the UK Government in respect of the CSR of the companies are laid down as “The government sees CSR as the business contribution to our sustainable development goals. Essentially it is about how business takes account of its economic, social and environmental impacts in the way it operates – maximizing the benefits and minimising the downsides. ” UK Government (2004) According to Organsation for Economic Cooperation and Development OECD (2003): CSR is behaviour by businesses over and above legal requirements, voluntarily adopted because businesses deem it to be in their long term interestCSR is intrinsically linked to the concept of sustainable development: businesses need to integrate the economic, social and environmental impact in their operations CSR is not an optional ‘addon’ to business core activities — but about the way in which businesses are managed Davis, (1975) also defines Corporate Social Responsibility as a consequence of and an obligation following from the unprecedented increase of firms’ social power (as tax payers, recruiters, etc.

) and that failure to balance social power with social responsibility may ultimately result in the loss of this power and a subsequent decline of the firm.Another school of thought sees social responsibility as a contractual obligation firms have towards society. It is society in the first place that has permitted firms to use both natural and human resources and has given them the right to perform their productive functions and to attain their power status (Donaldson, 1983). As a result, society has an implicit social contract with the firm.Thus, in return for the right to exploit resources in the production process, society has a claim on the firm and the right to control it.

With the introduction of more and more legislative pressures on the companies the pressure on them for meeting the reporting requirements has been constantly increasing. “The triple bottom line consisting of Environmental, Social and Economic responsibilities is becoming an imperative. Environmental and social responsibility should beat at the heart of every business leader” Anita Roddick, BodyShopThe dimensions of CSR include the internal aspects, external aspects, accountability of the firms in this respect and the responsibility of corporate citizenship. The internal aspects cover the written policies on non-discrimination in the workplace, statements on equal opportunities, working hours and wage structures, and protection of human rights. The External aspects include the company policies on labour standards, restrictions on child labour, health, safety and environmental aspects and commitments to local community and policies on business ethics and fair trade.While the accountability relates to the reporting on the CSR and/or the sustainable development, Corporate Citizenship places the responsibility for evolving programmes that address and provide solutions for CSR issues on a voluntary basis.

7. 0 Pressures on the Companies on CSR Compliances: The governments and the European Union have started applying economic and legislative pressures on the companies to comply with their CSR obligations. The Final Report of the European Policy .

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