Corporate Social Responsibility & Elkington's Triple Bottom Line (Cambridge (CIE) A Level Business)

An Introduction to Corporate Social Responsibility

• Corporate Social Responsibility (CSR) refers to the concept that businesses have a responsibility to consider and positively impact society beyond their economic interests

• It is a framework through which companies voluntarily integrate social and environmental concerns into their business operations and interactions with stakeholders

Corporate social responsibility goals can be focused on a range of different stakeholders

• CSR involves taking into account the impact of business activities on various stakeholders, including employees, customers, communities, the environment, and society at large

• CSR goes beyond legal compliance and strives for companies to actively contribute to sustainable development and societal well-being
   

Examples of Socially Responsible Activities 

Reasons for Implementing CSR

• Business set ethical or socially responsible objectives for a range of sound commercial reasons
  

Business Reasons for Implementing CSR

The Impact of Implementing CSR

• Businesses that choose to adopt socially responsible principles usually attract long-term loyalty from employees and customers and may find that their approach provides a useful competitive advantage
  
  

• They are also likely to receive the support of the local community and local government, especially if they share their aims
  

• Suppliers and competitors of socially responsible businesses often change their approach to ensure that they do not lose sales to more ethical rivals
  

• Taking a socially responsible approach costs more and may reduce the overall level of profits if the business is not able to raise their prices to compensate
  
  

  • Japanese fashion retailer Uniqlo has tried to move towards an eco-friendly strategy in recent years, focusing on technologies that make the production of new clothing from recycled materials possible

    • The business has invested significant sums in energy-efficient production facilities and now supports the campaign to safeguard the islands and coastal regions of Japan’s threatened Seto Inland Sea

Elkington's Triple Bottom Line

• The Triple Bottom Line model highlights that business performance may be measured in a number of ways in relation to

  • Its finances

  • Its environmental impact

  • How socially responsible it is in relation to employees
    

• Elkington argued that only a company that was measuring performance in all three areas of people, profit and planet was considering the full costs of its activities

  • If all these areas are measured, business owners and employees are likely to pay attention to them and change their behaviour accordingly,  rather than just focusing on profit

  • As a result, sustainability both within the business and, if adopted widely, across the economy as a whole, should be improved
    

Diagram: Elkington's Triple Bottom Line

Elkington's Triple Bottom Line model suggests that businesses should consider their impact on people and the environment alongside financial metrics to fully understand their performance