p5 Corporate Social Responsibility 1.4

Definition: Voluntary action taken by company to address the ethical, social and environmental impacts of its business and concerns of its principle stakeholders - Institute of Business Ethics

Sustainablity - action of today that do not have a detrimental impact on the generations to come

CSR models

ESG factors - Environmental, Social and Governance - current model

SEE triple bottom line - Social Environmental and Economic - reporting on these factors

Business operate transparently - rapid developements in technology allow decision to be disemminated widely and instantly and subject to public scrutiny

changing society - stakeholders increassingly aware and challenging and investors more interested in ethical issues wiith growth social responsible investment funds

regulation and legislation - Sarbanes Oxley demands code for ethics for CEO and CFO> bribery ACT - corruption laws introduced - companies ACT requires consider action on wider stakeholders not just shareholders

Government pressue to tackle climate change and improve society e.g. unemployment problems

Incident highlight impact on reputation

Ethical polices developed as part of risk management approach to protect reputation and ethics means to increase competitive advantage

Increased globalisation and tranparency of supply chain - growing concern re social injustice, diversity, environmental sustainability

Reputational risks

• Damage to reputation - years to build impact on stakeholder value fro failure to understand their interests. 
• potential prosecutivon or imprisonment of directors e.g. corporate  manslaugher e.g. BARING lack of segregation of duties, inapproapriate trading with huge losses. 6.5 yr jail.

Financial risk

• - from failure to attact invetors who exclude from portfoliosof socially responsible investment funds
• Financial penalities for not acting ethically - Barclay £290m for LIBOR fixing

Market risk - Loss of market share to more environmentally friendly producers and products

Legal risk - action by stakeholdes affected by organisations or its staff - expensive and damages reputation e.e. health and safety issues. NOW Ilegal beh in phone hacking

Operational risk - disruption to corporate projects by activist potenitla for financial loss and dameage to reputation e.g. TESCO lack of accountablity in supply chain untested 

Overview - stating what policy is for and background

Purpose of policy - stressing employees and customer's expectations on fair business practice

Scope - who it applies to to ensue no misundestanding

Statement of expectation from Board to sent tone at top - on expectation of rights and wrongs

Enforcement - results of actions contradictory to policy

Implementation - clarify who is responsible and where concerns can be raised

Review frequency, Owner and Monitored

WORKPLACE LEGISLATION MAY INCLUDE

• diversity and equal opportunities
• harrasssment/bullying and discrimination
• T&D opps/open and honesty in comms
• flexible working 
• compliance with H&S/ employee representation, whistle blowing and privacy

Tesco and horsemeat- improved transparence regarding supply chain:

• simplified - shorted journey to table
• transparency on details to be published on supply chair
• use of suppliers closer to operations e.g.British produce
• build better relations with British farmers
• testing of more products - publish no.