Corporate Social Responsibility

This page was last modified on 31-10-2016

Corporate Social Responsibility (CSR) is based on a voluntary change to a sustainable responsible behavior towards other economic players, the environment and society in general.

CSR is the application of sustainable development principles by businesses and aims at establishing a link between the corporate world and the society.

To businesses, becoming socially responsible means integrating social and environmental issues into their day-to-day management and interactions with third parties.

Who is concerned

The CSR approach can be adopted by any business, whatever its size or sector of activity provided their business management is aware of the challenges in order to:

  • ensure the sustainable development of the business;
  • increase customer satisfaction and loyalty;
  • take action to ensure cohesion with local communities and the public authorities.

The main business departments involved in the implementation of a CSR concept are:

  • the management: by integrating CSR into the company strategy;
  • the human resources (HR): through recruitment, management and the development of human resources;
  • the purchasing department: through the selection of suppliers and subcontractors and the way in which the business collaborates with them;
  • the quality department: via their choice and monitoring of existing standards;
  • the operations department: by being aware of the impact of the business on the environment and on society, their control of waste management and investment in renewable energies, etc.;
  • the marketing and public relations department: by communicating the business's commitment externally.

Prerequisites

To be viable in the long term, a CSR approach must:

  • be backed by the determination of the business head or management and be integrated into business operations;
  • incorporate the values of the business;
  • gain the support of the staff of the business;
  • be regularly communicated internally and externally;
  • be receptive to the employees and various contacts of the business in order to respond to the needs they express.

How to proceed

CSR action levels

Businesses can have a CSR approach on 3 levels.

Level 1 - Regulatory compliance

First of all, a company is required to respect the regulations in force in the country where it operates, in particular with regard to environmental protection, health and safety of workers, clients or neighbours.

This level is deemed to be non negotiable and it is the conditio sine qua non for the company's investment in CSR.

Level 2 - Compliance with optional standards

The business may then choose to go beyond the legal obligations by respecting nonobligatory standards which in many cases were implemented by the company itself.

For example, it may concern the provision of child care services for its employees or the respect of environmental standards.

Level 3 - Philantropic approach

A company can increase its efforts to improve the well-being of their workers through philanthropic involvement.

At this level for instance, the company could develop corporate sponsorships or support their workers' voluntary activities.

CSR - Implementation steps

Businesses can select their own approach in order to be recognised for their social responsibility. They may, for example, proceed as follows:

Step 1 - Analysis

The business must first:

  • deeply reflect on its corporate values which could then be formalised in a charter or a code;
  • carry out an analysis of the situation concerning the strengths and weaknesses as well as the external opportunities and threats for the business ('SWOT' analysis - Strengths, Weaknesses, Opportunities and Threats).

Step 2 - Implementation

Once the analysis is completed, the company can proceed with the development of a concept or actions based on strategic choices in order to put in place suitable tools which shall ensure the continuity of the selected approach, the involvement of the various departments within the company and the empowerment of HR.

Step 3 - Follow-up and control

In a third step, it is important to implement tracking/monitoring tools, such as an inhouse reference guide and/or adherence to the standards defined.

Step 4 - Communication

Finally, the company should efficiently communicate its CSR approach, both internally as well as externally to their stakeholders (e.g. by publishing a sustainable business management report).

Advantages of a CSR approach

Businesses that have adopted CSR will benefit on several levels:

  • economically: good reputation, stand out from the competition and benefit from a better image with clients, investors and banks;
  • financially: energy savings, less waste production, cost reduction, improvement of business performance;
  • performance: anticipation of constraints, better risk assessment and management of responsibilities;
  • socially: the company gains a better image on the employment market, employee motivation, better relationships on management-worker level;
  • in environmental terms: less negative impact on the environment;
  • societally: by contributing to sustainable development.

Examples of socially responsible initiatives in economic terms

  • rigorous and transparent management through the use of management tools and/or quality systems;
  • quality assurance programmes including the implementation of new standards;
  • control of the production chain and involvement of partners/suppliers in the production phases;
  • selection of business partners who respect social, ecological and economic standards in their supply chains;
  • set up and maintenance of mutually beneficial quality-based relationships with suppliers, subcontractors and consumers;
  • set up of knowledge management projects such as supporting innovation and involving various economic agents (for example: public operators in education and research, skills centres, etc.).

Examples of socially responsible initiatives in social terms

  • promotion of social cohesion within the business by combating all forms of discrimination in recruitment, remuneration and the development of female and male staff;
  • promotion of well-being at work (e.g.: ergonomic offices, gym, football club, childcare services such as creches in the workplace);
  • implementation of measures promoting the work-life balance (e.g.: part-time working, flexible working hours adapted to the individual needs of employees and their families, possibility of taking a 'sabbatical');
  • improvement and monitoring of working conditions (health and safety at work);
  • promotion of diversity through the integration of different groups (nationalities, age, gender, minorities, disabled);
  • investment in staff training and development of vocational training;
  • taking into account the employees' individual needs (e.g.: career plan, understanding work requirements and pressure, motivation depending on the employee's personality);
  • motivation of employees by introducing innovative work possibilities (e.g.: teleworking).

Examples of socially responsible initiatives in environmental terms

  • selection of partners, providers and subcontractors based on environmental criteria;
  • ecological production (responsible use of electricity and primary resources, reduction of polluting emissions, etc.);
  • motivation of employees to travel to work with environmentally friendly means of transport (e.g.: making bicycles available to employees, providing tickets for public transport);
  • control of the consumption of energy, water and raw materials;
  • reduction of waste production (ex.: email signature line with a message encouraging people not to print each email) and recycling measures (e.g.: putting up selective waste sorting bins);
  • use of ecological materials and processes in the production chain;
  • support measures in favour of regional suppliers and subcontractors in order to reduce transport distances and hence greenhouse gas emissions;
  • undertaking regular measurements and audits to ensure that the targets have been achieved and to suggest improvements in terms of environmental performance.

Examples of socially responsible initiatives in societal terms

  • participation in solidarity action programmes, sponsorship and support in the form of material support, human resources and know-how;
  • encouragement of employees to support to the civil society;
  • response to social problems through philanthropic activities in order to overcome deficiencies in society;
  • by creating or cooperating with initiatives or foundations to raise public awareness concerning sustainable development;
  • by supporting socio-economic projects with the business name/label;
  • by communicating its commitment, disseminating its good practices to the public and serving as an example to others.

Norms and standards associated with CSR and sustainable development

The establishment can decide to comply with several norms and standards in order to integrate CSR into its strategy, management and operations by:

  • setting up benchmarking and using an external tool;
  • ensuring an integrated and sustainable approach;
  • adhering to a recognised standard;
  • measuring itself against a 'benchmark';
  • positioning itself officially in relation to other businesses;
  • gaining external recognition in order to access certain markets.

Various reference standards are used to formalise the procedures for continuous improvement of the overall performance of businesses such as:

  • reference guides that take stakeholders into account, e.g. the standards AA 1000 and ISO 9004 and SA 8000:
  • management systems such as the European management standard for environmental audits EMAS (Eco-Management and Audit Scheme), the standards ISO 9000, 9001 and 9004: 2000, the OHSAS 18 001 guide (Occupational Health and Safety Assessment Series), the international environmental certification ISO 14001, etc.

In Luxembourg, there are several labels and charters which enable businesses to show their commitment to CSR:

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