Corporate Social Responsibility Definition
Corporate Social Responsibility (CSR) is a term for business activities addressing goals that are not purely commercial. Almost all food and grocery companies incorporate a CSR dimension.
CSR activities may be divided into two broad areas:
The UK Government promotes CSR values to business, emphasising both the social benefits and the potential business benefits of participation whilst also providing a number of incentives. The business community has also taken a strong interest in developing CSR programmes and most major UK grocery businesses now publish reports of their activities in this area.
Whilst the term “CSR” is relatively new, the principles which it describes are not. Some of the UK’s largest grocery companies have had CSR programmes in place for many decades and the social work done by Cadbury’s, Rowntrees and Northern Foods (all, coincidentally, founded by Quakers) is well-known. The Co-operative Movement, now over 160 years old, has always placed CSR at the centre of its operations.
What Is Sustainability?
‘Sustainable’ means maintainable or viable in the long term. Thus for instance, ‘harvesting’ timber by replacing every tree chopped down with a new one planted.
Sustainable Development (SD) is captured in the concept of the “triple bottom line” – the economic, environmental and social effects of a company’s activities. It recognises that a business must be financially successful to be sustainable.
The term ‘sustainable development’ has been in use for around 20 years, having first entered the consciousness of business leaders with the publication of Our Common Future, the report of the World Commission on Environment and Development. The Commission’s definition, since widely adopted, was: "Development which meets the needs of the present without compromising the ability of future generations to meet their own needs."
The grocery industry is heavily reliant upon the natural environment for the production of basic agricultural commodities. The industry is therefore heavily engaged in sustainability issues, attempting to meet consumer demands whilst simultaneously preserving and improving the environment.
For many, SD is primarily concerned with the environmental protection because economic viability is always on the company agenda. However, SD policies also touch upon social issues such as the viability of town centres and the wage rates paid to workers in developing countries.
Grocery Industry Involvement
Of the UK’s ten leading grocery suppliers, all have now established programmes embracing various aspects of CSR. Similarly, of the UK’s nine leading grocery retailers, all are active in this area in some way.
All of these companies publish information on this subject and CSR has become a regular part of corporate reporting. Some companies have now appointed specialist staff dedicated to the co-ordination of CSR activities. See each company’s website and report and accounts for more details.
Reporting standards remain rather variable however, and making direct comparisons between companies is not always easy.
The need for consistency and for impartial measurement has led to the development of a number of voluntary standards, including AA1000 (from the Institute for Social and Ethical Accountability) and ISO14001 (from International Standards Organisation).
AA1000 is in use by a number of UK grocery companies including BAT, the Co-op Group, Diageo, M&S, Musgrave and Unilever.
Financial Indices
Growing interest in CSR issues has led to the development of new financial measures, intended to inform investors of company performance in areas that are not measurable in purely financial terms. A number of award and recognition programmes have also been created.
These have the advantage of providing impartial and independent assessment of company performance, going beyond any suspicion of ‘corporate spin’. UK grocery companies feature prominently on several of the leading schemes, as shown below:
Business In The Community, Corporate Responsibility Index 2003 (latest available)
- 3rd: Unilever
- 8th J Sainsbury
- 18th: M&S
- 19th: Tesco
- 24th: Allied Domecq
- 30th: Boots
|
- 34th: Diageo
- 46th: Reckitt & Benckiser
- 49th: Cadbury’s Schweppes
- 79th: Tate & Lyle
- 82nd: Scottish & Newcastle
- 84th: Gallaher
|
Dow Jones Sustainability Index, World 2004-05 (NB: companies not ranked)
- Allied Domecq
- Boots Group
- BAT
- Cadbury Schweppes
- Compass Group
- Diageo
- GlaxoSmithKline
|
- J Sainsbury
- M&S
- Reckitt Benckiser
- SAB Miller
- Smith & Nephew
- SSL International
- Unilever
|
FTSE4GOOD UK Index, Jan 2005 (NB: Companies not ranked)
- Allied Domecq
- Arla Foods
- Body Shop
- Boots Group
- Cadbury Schweppes
- Compass Group
- Diageo
- GlaxoSmithKline
- Greggs
- J Sainsbury
|
- M&S
- Reckitt Benckiser
- Scottish & Newcastle
- Smith & Nephew
- SSL International
- Tate & Lyle
- Tesco
- Unilever
- Wolverhampton & Dudley
|
For more information on Corporate Social Responsibility, visit IGD's Sustainability section.
