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IBEC | the Irish Business and Employers Confederation

EUROPEAN AND SOCIAL POLICY DIVISION

CORPORATESOCIAL RESPONSIBILITY


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table of contents

FOREWORD ........................................................................................1

1. INTRODUCTION ........................................................................................2

2. EVOLUTION OF CSR.................................................................................4

International activities..................................................................4

1940s-1960s ................... ....................... ...................... .....................4

1960s-1970s......................................................................................4

1980s ...................... ...................... ....................... ...................... .........5

1990s ...................... ...................... ....................... ...................... .........5

21st Century................ ....................... ...................... ....................... ..6

European Activities ..................... ....................... ...................... ......6

European Commission...................................................................7

European Multi-Stakeholder Forum (EMF) ...................... ........8

3. WHAT IS CORPORATE SOCIAL RESPONSIBILITY?..............................9

Defining CSR ...................... ...................... ....................... .................9

Principles of CSR............................................................................10

Individual components of CSR ...................... ....................... .....10

4. BUSINESS CASE FOR CORPORATE SOCIAL RESPONSIBILITY.......12

Corporate Governance ...................... ...................... .....................12

Competitive Advantage..................... ...................... ....................13Corporate Reputation...................................................................13

Investment ...................... ...................... ....................... ...................13

Improving Relationships with Stakeholders ...................... ....13

Cost/Benefit Analysis....... ...................... ....................... ...............14

Positive Public Image....................................................................14

5. INTERNATIONAL INSTRUMENTS AND INITIATIVES ON CSR........15

Governmental and intergovernmental initiatives.......... ......15

Business-led initiatives................................................................18

NGO-led initiatives ...................... ....................... ...................... ...20

6. CSR CASE STUDIES .......................................................................23

IBM Ireland .................... ....................... ...................... ....................23

Vodafone Ireland...........................................................................25

INTEL Ireland .................... ....................... ...................... .................27

Allianz Ireland................................................................................29

7. CONCLUSION.................................................................................31

8. GLOSSARY OF TERMS...................................................................32

9. BIBLIOGRAPHY.............................................................................33

Report Author:

Catherine MaguireSocial Policy Executive

European & Social Policy Division

Telephone: (01) 605 1692

Email: [email protected]

Web: www.ibec.ie

Information Restriction: This informationis issued for information purposes onlyand is restricted to staff of IBEC and topersons in member companies authorisedto receive same. Except for normal reviewpurposes,no part of this report may bereproduced or transmitted in any form orby any means, electronic or mechanical,including photocopying, recording, or byany information storage or retrievalsystem without the prior permission of

the publishers. Copyright IBEC.


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FOREWORD

CORPORATE SOCIAL RESPONSIBILITY

Corporate Social responsibility or CSR as it is known is an important issue for

modern business. The rapid growth of globalisation and the development of

more multi-cultural societies means that the business environment has changed

for everyone.This change brings with it new challenges for companies of everysize and sector.

One of the challenges for Irish business is to understand what CSR is and what it

means for them.There are a range of reports,standards, recommendations and

norms published throughout the world and the various buzz words and acronyms

cause intense confusion. In this publication IBEC seeks to explain in a clear and

unambiguous way what CSR is, where it has come from and to give some practical Irish examples of

good practice in the area. We also explain the various initiatives and where they fit in.

We know that many Irish businesses are engaged in CSR activities,some without using the CSR label.The CSR

concept is a formalisation of social,environmental and ethical practice.Through such a formalisation manycompanies are actively communicating to shareholders, Government, customers, employees and the broader

community about their business values and about how they are contributing to society as a whole.There is no

universal definition of CSR but there is general acceptance that it involves voluntary initiatives and activities by

business.The flexibility of CSR is one of its most attractive features meaning that it can be adapted to suit

individual company size or sector.

Responsible Business is one of IBEC's top policy priorities in our Strategy 2002 - 2005.CSR has an important role to

play in promoting responsible business and we hope that this publication will be of practical assistance to

companies, to stimulate the CSR debate in their business and to help them in devising a suitable strategy to achieve

their aims.The CSR debate will continue, here in Ireland, at European level and Internationally too through the

various institutions currently taking an active interest in this topic. It is important for Irish business to be informedand to participate fully in these debates.

I would like to say a special thank you for the important contribution made to this report by IBEC's CSR Working

Group and also to Vodafone, Allianz,IBM and Intel who kindly assisted us by providing interesting case studies

which give us some practical insights into their approach to CSR.

Maria Cronin

IBEC Director of EU and Social Policy

1


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IBEC 2004 3

and supply chains operate to the same standards

as those the organisation imposes upon itself;

developing measurement systems to monitor

and report on the companys performance against

relevant CSR objectives; and

ensuring the company is not inadvertentlyexposing itself to risk through the poor

management of environmental or social issues

Business in the Community UK (2004, p4) identified

other challenges,such as redundancy and human

rights, ranging from:how companies should behave

when making people redundant to whether they

should enter markets in countries that have poor

human-rights records. These are just some of the

topics that arise in any debate on CSR. If a company

decides to formalise an existing practice or tocommence a new initiative there is also the eventual

challenge of developing its own standard of

performance or choosing between the plethora of

tools and initiatives that are available (see Section 5

for further information on initiatives).

Given the wide variety of issues involved in CSR, this

report aims to provide the reader with a clear picture

of what is involved. The subject is introduced through

a description of the evolution of CSR and a history of

the activities in this area over the past 64 years, witha particular and practical focus on the most recent

developments. The principles that provide a basic

understanding of CSR and its individual aspects are

presented in Section Three. Section Four examines

the business case for CSR and a compendium of 25

CSR instruments and initiatives are explained in

Section Five. A variety of Irish and international case

studies are provided in Section Six, and conclusions

drawn from the report are presented in Section

Seven. Finally, Section Eight provides the reader with

a glossary of terms.


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international activities

As previously mentioned, the origins of CSR can be

traced back to the practices of paternalistic firms

operating in the 18th and 19th centuries. These earlier

forms of CSR were, in the main, nationally inspired

and did not generally incorporate transnational

activities. The international dimensions of activities

inspiring modern CSR did not truly emerge until the

globalisation of business in the 20th century. As the

main driving force behind the creation of modern

CSR, globalisation created new cross-boundary

business structures and operations, increased the

power held by business and consequently created aninternational impetus for the creation of new order in

areas such as labour, the environment, economics,

the community, finance and trade.

1940s-1960s

Following World War 2, governments around the

world agreed that there was a need for international

institutions to be established to create a new type of

international order.(ISO, 2004, p5) The InternationalLabour Organisation (ILO), the United Nations (UN),

the International Monetary Fund (IMF), the World

Trade Organisation (WTO) and the International

Organisation for Standardisation (ISO) were all

established to realise this goal. The establishment of

these institutions formed an infrastructure for global

rule-making through which modern CSR emerged

(ISO, 2004, p7).The goals set by these institutions

with regard to human rights, economics, poverty,

social dialogue, environmental protection, democracy

and trade liberalisation, many of which still apply

today,created a series of guidelines for businesses

and governments to observe,and created a

framework for the emergence of NGOs. The ISO

(2004, p7) also suggests that the concept of CSR hasbecome more prominent as a result of the fact that

the above objectives have not yet been achieved.

1960s-1970s

During the 1960s and 1970s, public concern increased

about the long-term effects of pollution on the

environment and the activities of international

corporations in foreign countries. Friends of the Earth,

Greenpeace,World Wildlife Fund and Amnesty

International, among other environmental and social

NGOs, were founded to campaign against

environmental degradation and the abuse of human

rights, and to lobby governments and business to

take action on these issues.These organisations

played an instrumental role in the development of

legislation, standards and the promotion of social,

environmental,economic and other CSR-related

issues (ISO, 2004). Governments responded to the

NGO campaigns and, in addition to nationalactivities, in 1972 a UN environment programme was

established following a conference on the human

environment. A number of environmental treaties

were also developed.

The alleged abuse of human rights by some

multinational companies operating in developing

countries started to attract increasing attention from

the media and the general public during this period.

While governments put pressure on abusing regimes,

parent companies either individually, or in

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2. EVOLUTION OF CSR



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conjunction with other companies, began to

proactively address this issue. One of the first joint

business activities was the endorsement of the

Global Sullivan Principles by a number of companies

who wanted to adopt a stance against the South

African apartheid regime (See Section Five for further

information on these principles).

In addition to heightened awareness amongst the

public regarding the environmental and human

rights practices and activities of multinationals, the

ability of some of these large companies to influence

the landscape within which they operated became a

cause for concern. The OECD Guidelines for

Multinational Enterprises in 1976 and the universally

applicable ILO Tripartite Declaration concerning

Multinational Enterprises and Social Policy in 1977

emerged as a result of this development.

1980s

The 1980s saw the continued development of new

CSR concepts, a surge in activities relating to CSR and

consumer boycotts of certain milk substitute and

petrol products. Alongside this, foreign direct

investment (FDI) and the environment became more

prominent with the emergence of concepts such as

sustainable development (ie, environment, economicand social issues) and corporate ethics. In 1981 the UN

Environmental Programme (UNEP), the International

Union for Conservation of Nature and Natural

Resources (IUCN) and the WWF published the World

Conservation Strategy that established the first

principles and guidelines for conservation and

sustainable development. (This was followed in 1991

by Caring for the Earthwhich set a blueprint for

implementation of the World Conservation Strategy)

(ISO, 2004). In 1982, the United Nations Charter for

Nature was passed and in 1987, a UN Montreal

protocol to phase out the use of ozone depleting

chemicals was signed by 24 countries. In addition, the

UN Brundtland Commission published its report

during this period, Our Common Future, which

developed significant interest in the new concept of

sustainable development.

As international competition for FDI increased in the

1980s, the World Bank encouraged all countries to

develop policies in this area as well as on

privatisation,deregulation, and trade liberalisation

(ISO, 2004). Socially responsible business practices

emerged alongside the development of these

policies. Also during this period, individual aspects of

CSR started to be treated on a collective basis and the

concepts of corporate ethics and reporting emerged

as a result.

1990s

During the 1990s CSR continued to evolve. Increased

attention was given to the CSR-related concepts of

sustainable development,corporate ethics and fair

trade. CSR also emerged as a concept within its own

right. Governments organised a series of world

meetings and conferences to examine this new

concept. This led to the establishment of a range of

working groups,committees, research teams and in

some cases, international laws, agreements anddeclarations. For example, conventions and a

Business Council for Sustainable Development

emerged as a result of the UN Earth Summit in 1992,

and governments pledged to work for full

employment, with quality jobs and respect for the

relevant ILO Conventions (ISO, 2004, p12) at the UN

World Summit for Social Development in 1995.The

Fourth World Conference on Women, also in 1995,

adopted declarations and action plans that called

upon business to address specific social problems.

Corporate ethics emerged as a mainstream business

issue in the 1990s for two main reasons. Firstly, NGOs

and the public made increasing demands on business

for greater accountability and transparency of

practices. Secondly, stringent legislation in the form

of statutory corporate governance standards was

implemented as a direct response to a number of

very high profile corporate scandals in the US. In

addition to the statutory standards,supplementalvoluntary standards,such as the Global Reporting

Initiative (GRI), were developed by a group of

companies and institutions.

The purpose of the standard was to develop and

disseminate globally applicable sustainability

guidelines for reporting on the economic,

environmental and social dimensions of activities,

products or services (See Section Five for further

information on this initiative).

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A range of other tools, codes and standards on every

aspect of CSR were also produced during this period

by business groups,governments and newly

established NGOs (see Section Five). As interest in fair

trade grew, the Ethical Trading Initiative, the Fair

Labour Association, Social Accountability

International and the Fair Trade LabellingOrganisation were set up. Pressure was put on

business during this period to prove that it was

acting responsibility by endorsing and committing

itself to various codes and standards. New

partnerships and dialogue between companies and

their stakeholders were also developed during this

period and that helped in the exchange of new ideas.

21st century

Today, as CSR is becoming recognised as a

mainstream business issue,more tools,codes and

standards continue to be developed. In July 2000, the

UN Global Compact was launched as a voluntary

corporate citizenship initiative for business to

embrace, support and enact a set of core values in

the areas of human rights, labour standards and

environmental practices. Also in 2000, the ILO

published a revision of its Tripartite Declaration of

Principles concerning Multinational organisations

and Social Policy, and the OECD completed a revision

of its Guidelines for Multinational Enterprises. The

UN Sub-Commission on the Promotion and

Protection of Human Rights established a working

group that produced text for Norms on the

Responsibilities of Transnational Corporations and

Other Business Enterprises with Regard to Human

Rights in 2004. This is currently under consideration

and the Office of the High Commissioner for Human

Rights is consulting with all relevant parties. A report

will be presented to the Commission in the 2005session. Finally, in relation to the development of

modern CSR, the importance of the role of the private

sector in contributing to sustainable development

was emphasised at the UN World Summit on

Sustainable Development. Also, in the summer of

2004, the ISO decided to develop a guidance

document on social responsibility (See Section Five

for more information on these tools).

european activities

While CSR continues to evolve and gather momentum

internationally, the Lisbon Summit proved to be the

starting point for the EU debate on CSR. The Manifesto

of Enterprises against Social Exclusion launched by the

President of the European Commission, Jacques Delors,and a group of European companies in 1995 was the

first European-level activity relating directly to CSR. A

European Business Network called CSR Europe was

created on foot of this and was charged with the

promotion of business-to-business dialogue and

exchange of best practices on CSR-related issues.

CSR was then put at the top of the political agenda in

2000 at the European Council in Lisbon. EU Heads of

State and government made a special appeal to

companies sense of social responsibility regardingbest practices for lifelong learning, work organisation,

equal opportunities, social exclusion and sustainable

development. European companies reacted by

acknowledging their social responsibility in a position

paper by the European employers body, UNICE, which

was released later on that year. Entitled Releasing

Europes Employment Potential: Companiesviews on

European Social Policy beyond 2000, the paper

stressed that European companies see themselves as

an integral part of society, and while they consider

profits to be the main goal of the company, it is not itsonly raison dtre. The role of CSR in addressing the

employment and social consequences of economic

and market integration and in adapting working

conditions to the new economy was emphasised at

the European Council in Nice.

In 2001, the role of government in the CSR debate was

alluded to by the European Council in Goteborg. The

Council referred to the involvement of public

authorities in the Sustainable Development Strategy

for Europe as (having) a key role in encouraging aframework to ensure that businesses integrate

environmental and social considerations into their

activities Business should be encouraged to take a

proactive approach to sustainable development in

their operations both within the EU and

elsewhere.(EU Commission, 2001, p6) In addition, in

the Commissions reflections on the White Paper on

Governance in the European Union, they stated that

Corporate Social Responsibility has important

implications for all economic and social actors as well

as for the public authorities, who should take them

into account in determining their own actions.

(EU Commission, 2001)

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european commission

In response to the calls for action, the EU produced a

Green Paper in 2001 called Promoting a European

Framework for Corporate Social Responsibility. The

paper was drawn up to encourage discussion and

views from all the main stakeholders about how tobuild a partnership for the development of a new

framework for the promotion of corporate social

responsibility. (EU Commission, 2001, p24) The

Commission received more than 250 responses but

significant differences were expressed.They were as

follows (EU Commission, 2002, p5):

Enterprises stressed the voluntary nature of CSR, its

integration in the sustainable development context

and that its content should be developed at global

level. Enterprises emphasised there would not beone-size-fits-all solutions. In the view of businesses,

attempts to regulate CSR at EU level would be

counterproductive, because this would stifle

creativity and innovation among enterprises which

drive the successful development of CSR, and could

lead to conflicting priorities for enterprises operating

in different geographical areas.

Trade unions and civil society organisations

emphasised that voluntary initiatives are not

sufficient to protect workers and citizensrights.They advocated a regulatory framework establishing

minimum standards and ensuring a level playing

field. They also insisted that in order to be credible,

CSR practices could not be developed, implemented

and evaluated unilaterally by businesses,but rather

with the involvement of relevant stakeholders. They

also asked for effective mechanisms to ensure a

companys accountability for its social and

environmental impact.

Investors stressed the need to improve disclosureand transparency of companies practices, rating

agenciesmethodology and investment management

of SRI (socially responsible investment) funds and

pension funds.

Consumers organisations underlined the importance

of trustworthy and complete information about the

ethical, social and environmental conditions in which

goods and services are produced and traded to guide

them in their purchase choices.

The European Council, in its Resolution of 3 December

2001,stressed that a European approach to CSR could

complement existing measures at local and national

level, imparting to them an added value, in order to

contribute to the development of CSR. The Council

mentioned that CSR can contribute not only to

encouraging a high level of social cohesion,environmental protection and respect for

fundamental rights, but also to improving

competitiveness in all types of business, from SMEs

to multinationals, and in all sectors of activity.

The Economic and Social Committee highlighted that

the principles of voluntary action and environmental,

economic and social sustainability, together with

guidance from international organisationsexisting

agreements should form a point of reference for

further European initiatives in support of companiesefforts to act in a socially responsible way.

The Committee of the Regions saw the possibility of

providing a framework for raising awareness,

promoting responsible principles and assisting

businesses and public authorities in incorporating

CSR in their activities at European level.

The European Parliament proposed to mainstream

CSR in all areas of EU competence, in particular

regional and social funding, and to create an EU,

multi-stakeholder CSR platform. It called for triple

bottom line reporting by companies on their social

and environmental performance.

In 2002, the Commission presented an EU strategy to

promote CSR, following on the Green Paper

produced in the previous year. Taking all relevant

views into account the Commission proposed to

build its strategy around six principles:

1. recognition of the voluntary nature of CSR;

2. the need for credibility and transparency ofCSR practices;

3. a focus on activities where community

involvement adds value;

4. a balanced and comprehensive approach to CSR,

including economic,social and environmental

issues as well as consumer interests;

5. attention to the needs and characteristics of SMEs;

6. support and compatibility with existing

international agreements and instruments (ILO

core labour standards, OECD guidelines for

multinational enterprises etc.).

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There was a general consensus that the EU should

develop a coherent, balanced and flexible approach to

CSR, encompassing all the relevant issues.There was

also agreement that the approach the Commission

took should concentrate on building on existing

initiatives,act as a catalyst for disseminating

information (awareness raising, exchange of goodpractices, research etc), promote transparency

(through disclosure policies) and credibility of CSR

practices. In addition,there was a general consensus

that dialogue between companies and stakeholders

should be encouraged, and CSR should be integrated

into all EU policies. In addition EU policies should

encourage CSR which should be used to promote

fundamental human and social rights in third world

countries, notably through international organisations

such as the ILO, OECD and also the WTO.

The launch of a Multi-Stakeholder Forum on CSR at

the EU level was one of the main commitments made

by the Commission to achieve its strategic goals.This

commitment was made as the Commission was of

the view thatthe involvement of all affected

stakeholders is key to ensuring acceptance and

credibility of CSR and better compliance with its

principles.(EU Commission, 2002,p22)

european multi-stakeholder forum (emf)

The EMF was launch in October 2002 and it was

charged by the Commission to foster corporate

social responsibility, the CSR EMF shall promote

innovation, transparency and convergence of CSR

practices and instruments through:

Improving knowledge about the relationship

between CSR and sustainable development

(including its impact on competitiveness,socialcohesion and environmental protection) by

facilitating the exchange of experience and good

practices and bringing together existing CSR

instruments and initiatives, with a special emphasis

on SME specific aspects;

Exploring the appropriateness of establishing

common guiding principles for CSR practices and

instruments, taking into account existing EU

initiatives and legislation and internationally agreed

instruments such as OECD Guidelines for

Multinational Enterprises, Council of Europe Social

Charter, ILO core labour conventions and the

International Bill of Human Rights.

The Forum comprised the social partners, business

networks and NGOs. Other EU institutions, in

addition to some other organisations active in the

field of CSR, attended with observer status. The

European Commission chaired the Forum. A

co-ordination committee with representatives from

ETUC (European Trade Union),UNICE, CSR Europe,

Green GB and NGOs co-ordinated the work of the

European Multi-Stakeholder Forum.They also

established and participated in working groups for

four thematic roundtables (see below), and

negotiated the final Forum Report. IBEC tracked this

development and participated in a UNICE CSRWorking Group which was established to gather the

viewpoints of all business organisations around

Europe about CSR and the discussions in the Forum.

This objective was achieved through four

roundtables, which focused on four key themes1:

1. improving knowledge of CSR;

2. fostering CSR among SMEs;

3. diversity, convergence and transparency of CSR

practices and tools;4. development aspects of CSR.

The roundtables completed their work in April 2004

and each produced a report summarising its

activities. A final forum report containing the results

and recommendations of the EMF as well as the

outcomes from each individual roundtable was

submitted to the Commission at the end of June

2004.The EMF concluded the report by inviting the

Commission together with stakeholders, to convene

an initial shared review in two years time of progressmade in relation to the Forums recommendations,

and of the trends, developments and innovations in

CSR. (EMF, 2004, p18)

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1. Competitiveness, social cohesion,environmental protection, the consumer dimension and the international dimension, including human rights,democratisation and conflict prevention aspects, were also taken into account, as crosscutting issues, by all the roundtables.


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defining csr

Corporate Social Responsibility (CSR) is a fluid

concept and can be described as an amalgamation

of a wide range of interests and activities. As a topic

it is still evolving and it covers a broad range of

issues such as the environment, community

involvement, human rights, diversity, employee

well-being, corporate governance, stakeholder

dialogue and involvement, advertising, supply

chain management, health and safety etc.The

nature, content and degree of complexity of CSR is

also largely company specific and, as it is strongly

linked to developments in society, the meaning andactivities associated with it will change over time.

Consequently, a single, internationally agreed

definition does not exist, nor does agreement on the

range of activities that should be considered as part

of CSR. The following are the broad definitions used

by the main institutions:

The European Commission Green Paper on CSR

attempts to define it as a concept whereby

companies integrate social and environmental

concerns in their business operations and in theirinteractions with their stakeholders on a voluntary

basis. (EU Commission,2002, p7)

The United Nations Conference on Trade and

Development (UNCTAD) defines CSR as

how business enterprises relate to,and impactupon, a societys needs and goals. All societal groups

are expected to perform certain roles and functions

that can change over time with a societys

evolution(UNCTAD, 1999, p1).

The International Organisation of Employers (IOE)

defines CSR as initiatives by companies voluntarily

integrating social and environmental concerns in

their business operations and in their interaction

with their shareholders. (IOE,2003)

Business in the Community Ireland defines CSR as

a complex term but can be summed up in the

concept of sustainable competitive profit

achieving marketplace success with a minimum

effect on the environment and a maximum positive

affect on each company stakeholder. In addition

CSR is about an organisation using its resources to

combat social exclusion and contribute to social

cohesion and recognising the benefits on corporate

reputation in doing so.

Terminology,and a varied use of language also

contribute to the confusion surrounding CSR.

Corporate social responsibility, social responsibility,

corporate responsibility and corporate citizenship

are the four main terms that are used. Despite

the appearance of a varied focus between these

terms, the objectives of each are, ultimately, the

same. CSR incorporates all aspects of the

terminology referred to above.

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principles of csr

As previously mentioned, the terms used to describe

CSR can vary. Nonetheless, attempts have been made

at identifying the principles of CSR. The participants

in the European Multi-Stakeholder Forum developed

a basic definition of the principles that they believeconstitute CSR.They are as follows: (European Multi-

Stakeholder Forum report, 2004, p3)

CSR is the voluntary integration of environmental

and social considerations into business operations,

over and above legal requirements and contractual

obligations.CSR is about going beyond these, not

replacing or avoiding them.

The commitment of management in driving

CSR forward is essential.

CSR is about the core business activities of a

company, and while companies are there to make

profits, an approach that integrates environmental

and social considerations and is based on dialogue

with stakeholders is likely to contribute to the

long-term sustainability of business in society.

CSR is one means amongst many for achieving

economic, social and environmental progress,

and for integrating these concerns into

business practice.

The dialogue with relevant stakeholders adds

value to the development of companiesCSR

practices and tools. As employees are an integral

part of a company, it is important to pay particular

attention to the role of employees and their

representatives and dialogue with them.

CSR is complementary to other approaches of

ensuring high environmental and social

performance: there are limits to CSR, and it alone

cannot be expected to ensure environmental and

social improvement, and that it should not be used

to shift public responsibilities to companies.

CSR is an ongoing learning process for companies

and stakeholders. The development of tools and

practices is work in progress. Companies need to

consider their approach carefully and choose tools

that suit their needs and respond well to

stakeholders expectations. They need to refine

and develop their approach over time, responding

to changing circumstances and expectations.Scope for flexibility, innovation and refinement

are important for successful CSR.

Convergence of CSR practices and tools is

occurring on a market-led basis through voluntary

bottom-up and multi-stakeholder approaches, and

other drivers,and that this can achieve quality and

a good balance between comparability,

consistency and flexibility.

Companies taking a CSR approach, as well as other

organisations, benefit from communicating about

these activities in a transparent and meaningful

way. There are different ways in which this can be

achieved, of which reporting is one. A companys

response to the transparency challenge will depend

on its activities,capacity and the needs of its

stakeholders, which may be difficult to reconcile.

The environmental, social and economic

impacts of a companys activities up and down

its supply chain, as well as in its own operations,

need consideration.

When operating in developing countries and/or

in situations of weak governance, companies

need to take into account the different context

and challenges, including poverty,conflicts,

environment and health issues.

individual componentsof csrThere are a wide variety of CSR activities in which a

company can engage.Those measures which are

adopted can vary, depending on a number of factors

such as the size of the company or the countries in

which it operates. Pressure by Governments, NGOs

and trade unions can also influence the direction the

company eventually decides to take on CSR. Tools and

initiatives can provide companies with some

guidance as to how to approach this topic and

formalise their CSR activities, and some of them can

also provide external verification/certification of CSR

activities if desired.

Even though the list is broad,the following model

designed by Business in the Community UK (2000),

provides an example of the some of the issues that a

formal CSR policy can address.

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the issues

workplace

Equal opportunities

Workforce diversityWork-life balance

Training and life-long learning

Health and safety

Human Rights

community

Impact of local operations onthe community

Measurement of employee time,management costs, cash andresources donated

Business investment in the community

environment

Environmental management

Impact on environment of coreproducts and services

Emissions to air, land and water

Use of natural resources

Transport impacts

marketplace

Positive/negative impacts on society

of core products and servicesIssues around buying and selling,

pricing etc

Supply chain influence

Customer and supplier complaints

Goods for vulnerable consumers

Advertising and consumer rights

Cause-related marketing (donatingportion of profits from certain product/service revenues to social causes)

Source: Winning with Integrity,Business in the CommunityUK 2000 sourced in A Step by Step Guide to IntegratingCorporate Social Responsibility across your Business


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A strong business case exists for CSR and, over the

past few years, it has emerged as one of the most

important tactics for business survival. It is

acknowledged in research and best practice that thelong-term profits of a company largely depend on

the planning and activities for the future

sustainability of that company. It is also well

documented that there is a direct correlation

between the social, environmental and ethical

practices of a business and sustainability.

Consequently, employers are increasingly recognising

the value of CSR and are reviewing and formalising

their CSR activities to maintain their long-term

prospects and competitiveness in the marketplace.There are a variety of internal and external business

drivers behind CSR that contribute to the well-being

of a business and some of them are listed below.

They have been divided into seven categories in

the model below.

corporate governance

Corporate governance requires compliance with all

relevant laws as a matter of course(as) legal

obligations are requirements, which if not honoured

may result in the company being unable to function

legitimately. (IBEC, 2001, p10) While corporate

governance may be focused on companies statutory

requirements, it also provides a backdrop for CSR, as

it encourages responsible business behaviour as well.

A companys awareness of the impact of its

operations on all of its stakeholders, and a

consequent pursuit of responsible practices, lies at

the heart of CSR.Therefore corporate governancehas an indirect impact and can encourage the

growth of CSR activities in a business.

IBEC 2004

4. BUSINESS CASE FOR CORPORATESOCIAL RESPONSIBILITY


CSR

CorporateGovernance Competitive

Advantage

PositivePR image

Improving relationshipswith stakeholdersCost Benefit

Analysis

Investment

Increased ConsumerConfidence

Factors influencing the business case for Corporate Social Responsibility


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competitive advantage

CSR can provide a competitive advantage to a

company, as it can help to meet the emerging

demands of consumers, prospective employees and

investors. Increasingly, companies need to integrate

corporate ethics into their production and marketingmethods and supply chains to remain competitive

and differentiate themselves from their competitors.

Consumers are now purchasing products that are

developed in a way that accords with the values they

hold. The importance of values to the purchasing

power of consumers is evident in the substantial

growth of companies such as the Body Shop and Fair

Trade that integrate CSR into their business through

their supply chain processes and procedures, and

their marketing campaigns.

With the growth of information technology,

highly skilled prospective employees are able to

access a substantial amount of information about

a company quickly and easily through the Internet.

The ethics of a company and the considerations

given by that company to the community and

environment in which it operates can influence the

decision of that person whether or not to apply for

a job with that company.

It has been reported that CSR can decrease long-termrisk for companies, while also enhancing their

reputations. Risk management and reputation

influence investor relations and can increase the

chances of attracting new investors to a company.

Enhanced corporate reputation also affects other

areas of the business (see below).

corporate reputation

The impact of business on society has never beenscrutinised more critically than today. The high profile

corporate scandals of the 1980s and 1990s damaged

public confidence in business and corporate

reputation is now recognised as a valuable

commodity to business. Generally speaking, more

and more companies are now required by their

shareholders to produce social/sustainable reports

alongside their annual reports. In addition, NGOs and

the wider public are now more dubious about the

activities of companies operating in foreign

jurisdictions and as a consequence, they are

monitoring their activities more closely.

The corporate reputation of a company can also

influence brand integrity.Research by Interbrand

found that 96% of Coca Colas stock market value is

in intangibles such as reputation, knowledge and the

brand. (and). Interbrand predict .the intangible

valuation of companies represented by brands will

rise to 45% by 2010. (Grayson et al, 2001)

CSR can help to enhance the reputation of a business

among all its stakeholders by formalising the

activities that the business is conducting in the area

and providing a communications medium that can

be used to promote those activities.

investment

In recent years there has been a growing recognition

that for business to be successful it must have

stability and continuity with its key stakeholders.

The profit margin is no longer the sole indicator of

a lucrative company, as sustainable business has

emerged as another indicator of a good investment.

Investors and analysts are expecting more detailed

information to be provided by the company on non-

financial aspects so they can consider the triple

bottom line and longer-term risk issues of reputation

and risk management.

improving relationshipswith stakeholders

A better working relationship with the community,

shareholders, employees etc., can be a result of

focusing the business on CSR.The integration of

the concept and the language into the day-to-day

exchanges between these parties can help to

increase stakeholdersawareness of the values

of the business and the importance of the linkswith all interested parties.This can result in the

attraction and retention of skilled employees,

increased community support for the business,

increased investment in the company and more

positive publicity.

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cost/benefit analysis

CSR is quite intangible and can, thus, be difficult to

cost. Nonetheless, tangible measurement indicators

can include costs associated with recycling and the

cost to the business of recruitment and retention.

Many businesses have reported that they haveexperienced reduced costs as a result of reducing,

reusing and recycling products.

In addition to the above, if an employee likes where

they work and the values of the company reflect

their own, they will be more likely to remain, thereby

reducing staff turnover and recruitment costs.

positive public image

Increased media attention on abuses of corporate

power has helped to raise public awareness of

corporate behaviour. While CSR is not just a public

relations exercise, the internal and external

promotion of CSR activities can increase the positive

reputation of a business as well as enhancing

communication.The understanding by the media

and other parties about the values of the business

and how it operates can also be increased through

the promotion of CSR activities.

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governmental andintergovernmental

initiatives

OECD GUIDELINES FOR MULTINATIONAL ENTERPRISES

The Guidelines for Multinational Enterprises

(MNEs) are recommendations addressed by 36

Governments (including Ireland) to multinational

enterprises operating in, and from, their countries.

They provide voluntary principles and standards for

responsible business conduct consistent with

applicable laws, and in areas such as product safety,environment,employment and industrial relations,

supply chain responsibilities,science and technology,

taxation and competition.The guidelines aim to

ensure that the operations of these enterprises are

in harmony with government policies, to strengthen

the basis of mutual confidence between enterprises

and the societies in which they operate, to help

improve the foreign investment climate and to

enhance the contribution to sustainable

development made by multinational

enterprises.(OECD, 2000,p 15) Governments of the

36 adhering countries have established a system of

national contact points to promote the observance

of the guidelines by multinational enterprises and

to act as a forum for the discussion of all matters

relating to those guidelines.

The guidelines are part of a broader instrument the

OECD Declaration on International Investment and

Multinational Enterprises.The Declaration promotes

a comprehensive and balanced approach for

governments fair management of FDI and for

corporate responsibility. Even though the guidelines

are directly aimed at multinational enterprises,

they state that domestic enterprises and SMEs

should be subject to the same expectations inrespect of their conduct wherever the guidelines

are relevant (OECD, 2000).

Further information on the OECD Guidelines

for Multinational Enterprises can be found on

www.oecd.org

ILO TRIPARTITE DECLARATION OF PRINCIPLES

CONCERNING MULTINATIONAL ENTERPRISES

AND SOCIAL POLICY

The Tripartite Declaration of Principles Concerning

Multinational Enterprises and Social Policy was

adopted by the ILO in response to concerns about the

activities and conduct of MNEs in host countries.The

aim of the Declaration is to encourage the positive

contribution which multinational enterprises can

make to economic and social progress and to

minimise and resolve the difficulties to which their

various operations may give rise, taking into account

the United Nations resolutions advocating the

establishment of a New International Economic

Order.(ILO, 2001, p2).The principles are voluntary and

were developed to offer guidance to MNEs,

governments,and employers and workers

organisations in such areas as employment, training,

conditions of work and life and industrial relations.

The Declaration reiterates that the principles are a

guide, and are commended to governments,

employers and workers organisations of home and

host countries and to the multinational enterprise

IBEC 2004

5. INTERNATIONAL INSTRUMENTSAND INITIATIVES ON CSR



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itself.A number of international labour conventions

and recommendations reinforce the provisions of the

Declaration and it is made clear that its provisions

shall not limit or otherwise affect obligations arising

out of any ILO convention (ILO, 2001).

Periodic surveys are conducted to monitor the effect

given to the Declaration by MNEs, governments,and

employersand workers organisations. A summary

and analysis of the replies received are submitted to

the ILO Governing Body for discussion. In the event of

a disagreement over the application of the

Declaration, the parties, using a procedure instituted

in1981, may submit a request to the ILO for an

interpretation of the meaning of its provisions (ILO,

2001). The ILO is of the view that this instrument

provides social policy guidelines in a sensitive and

highly complex area of activities. Adherence to theDeclaration by all concerned would contribute to a

climate more conducive to economic growth and

social development.(ILO, 2001, p5).

Further information on the ILO Tripartite Declaration

of Principles Concerning Multinational Enterprises

and Social Policy can be found on www.ilo.org

THE UN GLOBAL COMPACT

The Global Compact is a voluntary UN initiative by

the UN Secretary-General, Kofi Annan, thatinvites

business to play a role in building the missing social

infrastructure of the new global economy by

improving their own corporate practices.(Annan,

2003) The lead UN agencies involved are the ILO, the

UNEP and the UN High Commissioner for Human

Rights (UNHCHR). The United Nations Development

Programme (UNDP) is also involved in assisting the

agencies in developing country-specific responses

and activities (IOE, 2003). The UN aims to advancecorporate citizenship through this initiative by the

identification and dissemination of good practice

in four areas - human rights, labour, the

environment and corruption.

Launched in January 1999, the Compact is intended

to realise its objectives through promoting the

integration of 10 key principles into the strategies

and operations of private business around the world

and consequently,stimulating action in support of

UN goals. Nine principles were drawn from the

Universal Declaration of Human Rights, the ILO

Fundamental Principles and Rights at Work, the Rio

Declaration on Environment and Development and

the UN Convention against Corruption. During the

first Global Compact Leaders Summit,held on 24

June 2004 at UN Headquarters in New York, the

Secretary-General announced the addition of a tenthprinciple on corruption.The 10 principles are finite

and cannot be extended unilaterally. For more

information see www.unglobalcompact.org):

The Global Compact is not a regulatory instrument

linked with external monitoring or auditing of

company activities. It relies on public accountability,

transparency and for companies to demonstrate to

their employees and communities how they are

being responsible corporate citizens instead (IOE,

2003). By signing up to the Global Compact, acompany states that it is prepared to work towards

the achievement of the objectives of the Global

Compact and to maintain the momentum of

improvement. Companies are also encouraged to

exchange information about the initiatives they used

to translate the Compact and its principles into

business strategies and operations.

Further information on the Global Compact can be

found on www.unglobalcompact.org

UNITED NATIONS (DRAFT) BUSINESS NORMS ON THE

RESPONSIBILITY OF TRANSNATIONAL COMPANIES

The United Nations (Draft) Business Norms on the

Responsibility of Transnational Companies were

adopted by the UN Sub-Commission on the

Promotion and Protection of Human Rights on 13

August 2003. In April 2004, they were then

submitted to the full United Nations Commission on

Human Rights for preliminary consideration. At the60th session on 20 April 2004, the Commission

decided unanimously not to adopt the draft norms as

a legal text and not to permit monitoring of them.

Instead, it requested the Office of the High

Commissioner to compile a report setting out the

scope and legal status of existing initiatives and

standards relating to the responsibility of

transnational corporations and related business

enterprises for consideration by the Commission at

its April 2005 session. The High Commissioner is

currently consulting with stakeholders (including

companies and employersassociations) to hear their

views on these issues.

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The draft norms suggest various social,

environmental and economic obligations for

transnational companies, based mostly on existing

human rights and labour standards. However, it has

been suggested that the norms propose to make

private business, including individuals within a

corporation, liable for human rights violations. Thenorms (www.un.org) specify that:

Businesses must ensure that their impact does

not contribute a violation or work against the

realisation of human rights (including civil, political,

economic, social and cultural rights). Obligations

extend to the security of persons,core labour rights,

legal compliance, curbing corruption, consumer

protection, environmental protection and operations

in conflict zones.

Businesses should establish internal structures and

contract clauses to ensure compliance, and will be

obliged to provide reparations to any party affected

by non-compliance.

States maintain the primary responsibility to protect

and promote international human rights, and shall

create the necessary legal and administrative

framework to ensure implementation.

A compliance-monitoring unit should be established,

possibly by the United Nations.

Further information on the United Nations (Draft)

Business Norms on the Responsibility of Transnational

Companies can be found on www.un.org

UNITED NATIONS ENVIRONMENT PROGRAMME

FINANCIAL INITIATIVE (UNEP FI) STATEMENT ON THE

ENVIRONMENT AND SUSTAINABLE DEVELOPMENT

The UNEP FI was founded by the UN Economics andTrade Unit in 1992 (revised May 1997) to engage

financial institutions in dialogue on sustainable

development. UNEP FI comprises the Financial

Institutions Initiative (FII), for the banking sector, and

the Insurance Industry Initiative (III), for insurers, re-

insurers,pension funds and asset management

concerns.The UNEP FI statement on the environment

and sustainable development commits all signatories

to the integration of environmental considerations

into all aspects of their operations.

UNEP FI and the Global Reporting Initiative (GRI)

have co-convened a working group to complete a

GRI Financial Services Sector Supplement

(Environmental Performance) for the International

Finance Sector. An indicator will be developed to

allow companies to measure the impacts of financial

sector products and services on the environment.This product will be produced after a period of public

consultation in 2004. Guidelines on the needs of

financial institutions in developing countries and

transition economies are also due to be completed

by the end of 2004.

Further information on the UNEP FI initiatives on the

environment and sustainable development can be

found on www.unepfi.net/fii/

US - UK VOLUNTARY PRINCIPLES ON SECURITY

AND HUMAN RIGHTS

In 2000, representatives from the US Department of

State, the UK Foreign and Commonwealth Office; oil,

mining and energy companies, and human rights,

workers and corporate responsibility groups,

developed a set of Voluntary Principles on Security

and Human Rights.These principles are designed to

provide practical guidance to strengthen human

rights in company security arrangements in theextractive (ie, mining) sector. They also form the basis

for a global standard for the sector. The principles are

the first set of guidelines of their sort for this sector.

They address three areas:

1. risk assessment;

2 relations with public security;

3. relations with private security.

Participants involved in this initiative include

Human Rights First, Human Rights Watch,Amnesty

International, International Alert, Chevron,Texaco,

Freeport McMoran, Conoco, Shell, BP, Rio Tinto, Fund

for Peace, Council on Economic Priorities, Business

for Social Responsibility, the International Business

Leaders Forum and the International Federation of

Chemical, Mine and General WorkersUnions.

Further information on the US - UK voluntary

principles on security and human rights can be

found on www.fco.gov.uk

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INTERNATIONAL ORGANIZATION FOR

STANDARDIZATION (ISO) INTERNATIONAL

STANDARD FOR SOCIAL RESPONSIBILITY

The ISO senior management committee decided at

the end of June 2004 to develop an international

standard on social responsibility (SR).The objective is

to produce a guidance document, written in plain

language which is understandable and useable by

non-specialists.Currently, the standard is not

intended to be used in certification or as a

specification document against which conformity is

assessed.

To develop the SR standard, ISO is setting up a new

working group, which will answer directly to ISO's

Technical Management Board (TMB) that oversees

the activities of the organisation's 186 standards-

developing technical subcommittees. ISO formed a

task force to propose the terms of reference and

operating processes for the working group for

consideration at the TMB meeting in September

2004. Following this, the TMB prepared a formal

proposal that ISO undertake the preparation of an

international standard giving guidance on social

responsibility. Member bodies have been invited to

vote on the proposal by 7 January 2005. ISO has

assigned the leadership of the working group that

will develop an international standard to the nationalstandards institutes of Brazil (ABNT) and Sweden

(SIS). It is expected that the standard will be

completed for publication in 2007.

Further information on the ISO Standard for

Social Responsibility can be found on www.iso.org

business-led initiatives

BUSINESS IN THE COMMUNITY (BITC)

Business in the Community Ireland specialises in

corporate responsibility and community involvement.

The overall mission of the organisation is to harness

the power of Irish business to maximise its positive

impact on all its stakeholders. In relation to CSR,

some of the services provided to member companies

include measurement and reporting of their CSR

activities. The organisation also works with public

bodies and the non-governmental sector lobbyingand advocating the benefits of social partnership and

corporate responsibility.

Business in the Community Ireland addresses

corporate responsibility in the workplace,

marketplace, community and environment through

its Corporate Responsibility Policy and Practice

Division. This service promotes the integration of

socially responsible business practices in its member

companies, by supporting them in recognising theextent of their impact on all their stakeholders.

Business in the Community has produced a number of

publications on CSR.They include: A Guide to

Integrating Corporate Social Responsibility Across Your

Business,Winning with Integrity: A guide to social

responsibility Business Impact Task Force. The

organisation has funded studies to highlight

examples of socially responsible policies and practices

in companies of all sizes and sectors in Ireland.

Further information on Business in the Community

Ireland can be found on www.bitc.ie

A Corporate Responsibility Index was launched

by a consortium of 700 companies in the UK arm

of Business in the Community. The index was

launched in response to an identified need on the

part of companies for reliable and standardised

information that would enable a company's

performance to be compared with its competitors.

The Index is a benchmarking tool that evaluates

and compares responsible business behaviour,

corporate responsibility strategy, the integration

of this strategy into the business, the management

of corporate responsibility within the organisation

and performance in a range of social and

environmental impact areas.

Further information on the Corporate Responsibility

Index can be found on www.bitc.org.uk

CAUX PRINCIPLES FOR BUSINESS

The Caux principles were established in 1994 by a

network of business leaders from Japan, Europe and

North America. They provide a guide to companies

to develop,re-examine, implement and monitor

their own internal principles. The key principles

covered include the responsibilities of business, its

economic and societal impact, behaviour, respect

for rules, support for multilateral trade,respect

for the environment,and avoidance of illicit

operations. The general principles can be found on

www.cauxroundtable.org

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THE ETHICAL TRADING INITIATIVE (ETI)

This was established in September 1998 in the UK

and is a formation of companies, NGOs and trade

union organisations.The ETI seeks to promote respect

for the rights of workers producing for the UK

markets and help improve their working conditions

by developing and encouraging the use of widely

endorsed standards, embodied in codes of conduct,

and monitoring and auditing methods.

The ETI has developed a basic code of labour practice

and accompanying principles of implementation for

company performance.Both of these tools were

negotiated and agreed by the founding trade union,

NGO and corporate members of ETI.The code

contains nine clauses that reflect the most relevant

ILO standards with respect to labour practices. When

companies join ETI, they commit to implementing

the code in their supply chains and reporting

annually on their progress in doing so.

Further information on the ETI can be found on

www.ethicaltrade.org

FAIR LABOR ASSOCIATION (FLA)

The Fair Labor Association is a non-profit

organisation established in the US in November1998 (amended October 2001) by the Apparel

Industry Partnership comprising companies,

NGOs and educational institutions. The FLA

Charter has created an industry-wide workplace

code of conduct and monitoring system that

hold companies publicly accountable for their labour

practices.The FLA will accredit the independent

monitors, certify that companies are in compliance

with the code of conduct, and serve as a source

of information for the public.

Further information on the Fair Labor Association

can be found on www.fairlabor.org

WORLD ECONOMIC FORUM (WEF)/CEOS GLOBAL

CORPORATE CITIZENSHIP: THE LEADERSHIP

CHALLENGE FOR CEOS AND BOARDS

A joint statement and framework for action was

issued by the WEF and a number of CEOs in 2002. It

recommends a Framework for Action to be used by

business leaders to develop a strategy for managing

a companys impact on society and its relationships

with stakeholders.The framework contains a

template for a leadership process within companies

and is intended to be complementary to the various

voluntary corporate citizenship principles and

guidelines that have been developed in specific areas.

In most cases, it will include elements of good

corporate governance and ethics; responsibility for

people; responsibility for environmental impact and a

broader contribution to development.

Further information on the World Economic Forum /

CEOs global corporate citizenship challenge can be

found on www.weforum.org

GLOBAL SULLIVAN PRINCIPLES OF

SOCIAL RESPONSIBILITY

In 1977, Reverend Leon Howard Sullivan, the first black

member of the board of the General Motors

Corporation, secured GMs support in the

development of the Sullivan Principles, a code of

conduct for American businesses operating in South

Africa. Reverend Leon Sullivan worked with

multinational enterprises and NGOs to encourage

companies to work towards economic, social and

political justice in all their operations. These

principles were widened for universal application in

1999, and include human rights, equal opportunity,

worker treatment,child labour, forced labour, abuse,

freedom of association, compensation for basicneeds, health and safety, fair competition,community

development, and promotion of principles with

suppliers and contractors. More information on the

Global Sullivan Principals can be found at

www.globalsullivanprincipals.org

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WORLD-WIDE RESPONSIBLE APPAREL

PRODUCTION PRINCIPLES (WRAP)

The American Apparel and Footwear Association

established these principles in 1998 to be core

standards for production facilities participating in

the WRAP Certification Programme.The certification

programme was established to independently

monitor and certify compliance with the socially

responsible global standards for manufacturing,

and ensure that sewn products are produced under

lawful, humane and ethical conditions. Following

the completion of a self-assessment questionnaire,

an accredited independent monitor is employed

to conduct a company audit as part of the overall

compliance-monitoring phase. More detailed

information is available on www.wrapapparel.org

INTERNATIONAL COUNCIL OF TOY INDUSTRIES (ICTI)

The International Council of Toy Industries

launched an ethical auditing initiative in 2002,

called the CARE programme, to independently

monitor manufacturing practices among all

toy manufacturers in a number of areas including

fair pay, decent working conditions, employee

health and safety standards and child labour.

The auditing process was developed by the ToyIndustry Association of the United States (TIA)

and the Toy Industries of Europe (TIE), tested in

China, and then turned over to ICTI.The overall

objective of the initiative is to create a single,

efficient and coherent system for factories that

will have the endorsement of the worlds retailers

and consumers,ensuring that there is uniformity

of standards and auditing practices, as well as

total transparency. The process entails site

inspections to establish if factories are complying

with the code of business conduct of the ICTI.

Since the advent of ethical auditing, an agreement

has been reached on guidelines, and six independent

auditing firms have been chosen to conduct the

work. An oversight committee is to be established to

monitor toy factory compliance with the industrys

code of business practice

Further information on the International Council of

Toy Industries can be found on www.toy-icti.org

ngo-led initiatives

ACCOUNTABILITY 1000

The AccountAbility 1000 framework was adopted in

November 1999 (revised 2002) by the Institute ofSocial and Ethical AccountAbility to improve

accountability and performance by learning through

stakeholder involvement. It is focused on securing

the quality of social and ethical accounting, auditing

and reporting. It does not prescribe what should be

reported on, rather the manner in which it should be

conducted. It is a foundation standard and, as such,

can be used to underpin the quality of specialised

accountability standards and as a stand-alone system

for managing and communicating social and ethical

accountability and performance.

The AA1000 Framework is supported by a series of

specialist modules (AA1000 Series).

Further information on Accountability 1000 can

be found on www.accountability.org.uk

AMNESTY INTERNATIONAL HUMAN RIGHTS

GUIDELINES FOR COMPANIES

Established in September 1998 by the Amnesty

International UK Business Group, these guidelines

comprise an introductory set of human rights

principles and are based on international standards.

They were developed to assist companies in

situations where they must tackle and manage

human rights violations or the potential for such

violations. The key principles covered include; human

rights, security, community engagement,freedom

from discrimination, freedom from slavery, health

and safety,and security management in general.

The guidelines also encourage companies to

promote these standards externally to their

contractors, suppliers or partners and they provide

suggestions to companies on how to promote

human rights internally.

Further information on Amnesty Internationals

human rights guidelines for companies can be

found on www.amnesty.org

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CERES PRINCIPLES

These principles were established in 1989 by over 80

NGOs, environmental, investor and advocacy groups.

The principles establish an environmental ethical

standard, with criteria by which investors and others

can evaluate and review the environmental

performance of companies. Companies that endorse

these principles make a promise to go voluntarily

beyond the requirements of the law, and publicly

assert their belief that corporations have a

responsibility for the environment.

Ceres has also developed a North American/

Canadian Sustainability Reporting Awards

Programme with the Association of Chartered

Certified Accountants (ACCA).The awards

programme rewards best practice in reporting on

sustainability, environmental and social issues and

provides guidance to other entities that are

publishing or intend to publish sustainability reports.

Further information on the Ceres Principles and

Sustainability Reporting Awards Programme can be

found on www.ceres.org

GLOBAL REPORTING INITIATIVE (GRI)

The Global Reporting Initiative was adopted in 1997(revised in June 2000 and again in September 2002)

and is an official collaborating centre of UNEP. The

initiative also works in conjunction with the Global

Compact. It is a partnership comprising NGOs,

corporations, government representatives,

accounting organisations, academics and business

associations. The GRI began as a project of the US

environmental organisation (CERES) and is a

voluntary initiative dedicated to developing and

disseminating globally applicable sustainability

reporting guidelines.The aim of the guidelines is to

provide an internal vehicle for evaluating the

consistency between the organisations economic,

environmental and social policy and its actual

performance. The GRI has developed a series of

reporting principles to achieve this aim. More

information is available at www.globalreporting.org

Social performance indicators for financial

institutions have been set out in a supplement to

the GRI guidelines on sustainability reporting.

The finance supplement suggests that banks and

insurance companies should report on what they are

doing to improve access to financial services for

disadvantaged populations and SMEs, reduce debts

for developing countries, and offer products likely to

appeal to ethical investors. The GRI guidelines also

propose that independent assurance can help to

enhance the credibility of a sustainability report.

Further information on the Global Reporting

Initiative can be found on www.globalreporting.org

ICFTU/ITS BASIC CODE OF LABOUR PRACTICE

This Code was established in 1997 by the

International Confederation of Free Trade

Unions/International Trade Secretariats. The code

aims to promote international standards and the

inclusion of a list of minimum standards addressing

trade union rights and labour practices in codes of

conduct. This basic code is designed to assist any

trade union organisation in negotiations with

companies on labour practice and in working with

NGOs on campaigns involving codes of conduct.

Further information on the ICFTU/ITS basic code of

labour practice can be found on www.itcilo.it

TCCR PRINCIPLES FOR GLOBAL CORPORATE

RESPONSIBILITY: BENCH MARKS FOR MEASURING

BUSINESS PERFORMANCE

These principles were established in 1993 by a

nondenominational alliance of religious groups

the Taskforce on the Churches and Corporate

Responsibility in Britain, the United States and

Canada. The principles are suggested as a means

of developing and monitoring corporate codes of

conduct, particularly when managing relations with

stakeholder bodies and they are also offered to NGOs

(www.web.net/~tccr/benchmarks)

The Principles of Global Responsibility: Bench

Marks for Measuring Business Performance

(referred to as Bench marks) was first published in

1995. The framework was assessed by church

groups, private industry, labour organisations,

womens groups and NGOs, and revised and

re-published. In 1998, the updated text was released

in Canada and internationally.

Further information on the TCCR Principles can be

found on www.web.net/~tccr/benchmarks

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SOCIAL ACCOUNTABILITY 8000 (SA 8000)

Social Accountability International is a US-based non-

profit organisation that aims to improve workplace

conditions through the expansion and further

development of an international workplace standard,

SA8000, and its associated verification system.

Published in 1997 (revised in 2001) by Social

Accountability International, SA8000 has been

developed as a means for retailers, brand companies,

suppliers and other organisations to maintain just

and decent working conditions throughout the

supply chain. (www.sa-intl.org)

Further information on Social Accountability 8000

can be found on www.sa-intl.org

SOCIAL VENTURE NETWORK (SVN) STANDARDS

OF CORPORATE SOCIAL RESPONSIBILITY

The SVN Standards were established in 1999 by

US and European business and social entrepreneurs

and NGOs. Under this initiative, companies are

encouraged to choose parts of a compendium that

they can use to improve social performance and

make continuous improvements that can be applied

to their overall strategies.The standards are not an

implementation model but they describe the

important aspects of CSR, suggest practices and

measures that other companies have used to

measure their social responsibility practices and

they highlight resources for additional information.

The SVN standards are based on nine topics. There

are three general topics: ethics, accountability and

governance- and six topics related to each

stakeholder group;investors, employees,business

partners, customers, community and environment.

Within each standard, the information is organised

into principles, practices, measures and resources.

Further information on the Social Venture Network

Standards of corporate social responsibility can be

found on www.svn.org

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IBEC 2004

ibm ireland

IBM, the information technology company, started

operations in Ireland in 1956. IBM employs in the

region of 3,600 people across all of its operations in

Ireland, making it one of the largest multinational

employers in the country. In addition to a growing

sales and services business serving Irish customers,

IBM has an extensive technology campus and

manufacturing facility based in Mulhuddart on the

outskirts of Dublin, a software development

laboratory, a large telesales and telemarketing centre,

an international financial services solutions centre

and a corporate treasury centre.

AIMS AND OBJECTIVES OF ENGAGING IN CSR

IBMs global CSR Report 2003 What is the value

of a company?and forthcoming 2004 CSR report,

outline and measure IBMs CSR leadership,

innovations and commitments from1913 to the

present day and beyond. Being seen as a great

employer, a trusted corporate citizen and a valued

member of the community have always been

priorities for IBM.This CSR commitment has been

delivered with the same level of passion that isapplied to client service or product innovation. IBM

has many examples of how it constantly strives to

ensure the best possible social and human outcomes

for its employees in the workplace, members of the

wider local and national community (especially those

in more disadvantaged circumstances), for the

environment,and for its clients, suppliers and

business partners in the marketplace.

CSR PROVISIONS AND INITIATIVES IN IBM

In addition to IBMs global corporate instruction on

CSR, each of the pillars of CSR is also guided by a

specific global policy. Among them are corporatepolicies on quality, workforce diversity and

environmental affairs and corporate instructions on

community relations. In turn, every IBM employee is

also required to sign up regularly to the current

Business Conduct guidelines and IBM has a Corporate

Citizen Committee.The Committee comprises 10 Vice

Presidents from across the company. In 2004, the

Committee is focussing on the publication of the IBM

2004 CSR Report as well as participation in the

Global Leadership Network for Corporate Citizenship,which IBM initiated in 2003 and which involves 10

worldwide corporate members and two research

partners. In Ireland, IBM is an active, corporate

founding member of Business in the Community

Ireland B2B (business to business) CSR organisation.

Every IBM facility is actively involved in a wide

programme of CSR activities. Listed below are some

recent examples of CSR best practice and new

initiatives in Ireland.

A strategic, long-term community relationsprogramme that has contributed over $2m/1.6m

in the past 5 years, including the IBM On-Demand

Community Volunteer programme for employees

and retirees established in November 2003. The

IBM KidSmart Early Learning Programme, in

operation since 2000 and the Wired for Learning

schools partnership with the Department of

Education and Science which has been in existence

since 1998,among others.

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6. CSR CASE STUDIES



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Environmental affairs projects include participation

in IBMs worldwide ISO 14001 registration, 2004 site

projects for enhanced access and mobility project for

people with disabilities. As a member of Repak, IBM

recycles 72.6% of all non-hazardous waste at the IBM

Technology Campus, which is well in excess of the

national requirement for recycling of 25% ofpackaging waste.

IBM has a number of workplace diversity and well-

being programmes in place. They include an IBM-

supported childcare facility, various flexible working

options, participation by Irish employees at the first

IBM Europe Gay, Lesbian, Bisexual and Transgender

Empowerment Conference in May 2004 and the

launch of a Diversity Council in Ireland in April 2004.

With regard to the market place, IBM Ireland

participates in the companys worldwide ISO 9901;

2001 quality management system registration. In

addition, a research project on the supply chain,

involving UCD and American universities, has been

initiated as well as customer satisfaction initiatives

and other activities

ATTITUDES AND COMMUNICATION

As part of the IBMs active commitment to being a

leading corporate citizen, the company, both inIreland, and worldwide,has built up a long-standing

reputation for CSR best practice and continuous

innovation. A key element of its strategy is

partnership with all stakeholders. In Ireland, recent

positive recognition which has been a source of pride

to employees has come in the form of:

the Chambers of Commerce Ireland

Presidents Awards for CSR in 2004: citation

and shortlisted for major CSR award to be

announced in November; Guinness Living Dublin Awards 2003: overall

winner and winner of the Business in the

Community category;

Repak 2003 recycling awards: finalists for Best

Company for Best Practice;

CSR Award 2003 from North-side

Partnership (Dublin), recognising in particular

IBMs local contribution to support the

re-training of the unemployed;

Best Companies to Work For 2003:

Excellence in Gender Equality Award.

IBM now issues an annual, global CSR Report that is

available online and in hard copy (online only from

2004) to all internal and external stakeholders.

Within IBM, all employees can access on demand,

up-to-date global and local policy information and

news from across all the CSR disciplines on its

extensive internal intranet. Outside of IBM, thecompany uses the Internet and public relations to

announce major initiatives or news. The company

also participates in business-to-business networks

such as those established by Business in the

Community Ireland (BITC) and has submitted CSR

best practice case studies to publications in 2003

and 2004. IBM also shares its CSR experience at

seminars and conferences such as with the National

Standards Authority of Ireland (NSAI) in November

2003 and the European Conference Boards CSR

meeting in Dublin in June 2004.

EVALUATION AND FUTURE IMPROVEMENTS

IBMs annual global CSR Report uses a number of

CSR measurements, including the Global Reporting

Initiative (GRI) (See Section 5 of this report for an

explanation of the GRI). On the ground, each CSR

discipline and programme features a combination of

measurements, targets and evaluation. The

expansion of existing programmes, modifications

to processes or the introduction of new initiatives isdetermined by feedback from IBMs bi-monthly

anonymous Global Pulseemployee survey that

targets 5% of employees. In addition, information

from customer feedback mechanisms,ongoing

supply chain research, and independent research

evaluations of community and schools programmes

is used. Aggressive recycling targets in addition to

external certifications are also pursued.

Moving forward into 2005, IBM aims to sustain and

develop all projects within its communityprogramme and introduce new ones. It plans to

include even more three-to-six-year-olds from

disadvantaged backgrounds this year in the IBM

KidSmart Early Learning programme.The company

plans to exceed its

csr ireland01 csr

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