Promoting Sustainable and Responsible Business in Asia and the Pacific: The Role of Government, Studies in Trade and Investment No. 72
Corporate social responsibility (CSR) is about companies operating in a manner that is sustainable, cognizant of their responsibility to the wider community in which they are located. CSR is more than simply acts of philanthropy or allocating a proportion of its earnings to worthy causes;it is strategic in nature, and is about how a business actually functions. CSR typically boils down to a set of policies within a company that seek to ensure that its actions and activities are beneficial, not only to itself and its shareholders, but also to other stakeholders, typically comprising: customers, employees, the wider community and the environment.
CSR tends to be a voluntary and self-regulating process within the firm, and should go beyond simply meeting the letter of the law on various issues, such as worker health and safety. Businesses are increasingly being held accountable in conforming to general ethical standards and international norms. The underlying principle is one of sustainability, and ensuring that a company’s activities will, at the very least, have little or no long-term, detrimental effect on the society in which it operates. Or if those activities cannot avoid having some kind of adverse impact, then seeking to mitigate or counter that impact in some way. Beyond that, companies should also be seeking to make a positive contribution to the host society, ideally harnessing their core competencies to best effect.