Corporate social responsibility is a buzz term that is often used inaccurately. One of the reasons for the confusion is that there are so many ways to go about corporate social responsibility, and there are lots of things companies can do to improve the planet. So, what exactly is it, and how do we ensure companies are actually committed to corporate social responsibility policies?
Understanding Corporate Social Responsibility
Corporate Social Responsibility (CSR) is a concept employed in the world of business to try and improve society and the environment at large. The main goal of CSR is to bring together social justice, environmental preservation, and the economic process. If a company develops a CSR strategy, it can support a multitude of parties as far as economic progress is concerned. This includes suppliers, employees, shareholders, and customers, and ensures that the company itself doesn’t have a negative ecological impact on the planet.
An example of CSR from Netflix
Prime examples of CSR typically involve charity initiatives and improved labour policies at workplaces. For instance, Netflix provides every employee with 52 weeks of paid parental leave to birth and non-birth parents. The company allows its employees to take this time at any stage of the child’s life, and it equates to 36 weeks more than the median in the tech industry. Netflix is also known to show up for social causes, such as Black Lives Matter, which could also be classed as a CSR activity.
Why is CSR important?
CSR exists to create a better world for everyone, not just those at the top of the food chain. Businesses that employ successful CSR strategies contribute positively to their local communities, interact well with their customers, and treat their employees with respect. They do all of this while helping to create a more sustainable world through their general business practices. In the corporate sector, CSR has been proven to stimulate innovation, which has helped society in myriad ways.
Holding corporations to account
Not every company stays true to its word as far as CSR is concerned. In fact, many companies create greenwashing policies that mask their bad practices. So, how do we hold such corporations to account? One of the best ways is to leverage shareholder power through activist investing. Here’s an example from JPMorgan to illustrate this point.
The global bank has a dedicated CSR programme with various goals, and sustainability is at the heart of most of its initiatives. In spite of this, research found that JPMorgan Chase is actually one of the world’s largest financiers of fossil fuels, investing more than $316 billion between the years 2016 and 2020 alone. Although the bank has pledged $2.5 trillion to combat climate change in the coming years, many see its policy as misleading. We also know that JPMorgan Chase funded TC Energy’s Coastal GasLink, which is a fracked-gas pipeline in British Colombia. The project put several at-risk fish species at even greater risk than they currently are.
As you’re probably aware, big banks don’t have to listen to everyone. But they do have to pay attention to their shareholders. That’s why Tulipshare has launched a campaign to demand that JPMorgan Chase ends its investments in fossil fuels. This is an excellent way of holding the world’s most unethical companies to account as far as their CSR strategies are concerned. This is because the desired changes come from within, and they can’t simply ignore what their shareholders are demanding of them.