The involvement of communities in the development and delivery of CSR policies
Peace Research | (01 July 2015)
Executive Summary 1
Literature Review 2
Intial Findings 7
Secondary Formulation & Complementary Plans 8
Sector Based Reports 10
Kumaraswamy, Ana Maria
Newton, Eleanor Kate
Patel, Mustufa Kamal
ABF–Associated British Foods
BA- British Airways
BP- British Petroleum
CSR–Corporate Social Responsibility
EY- Ernst & Young
GSK–Glaxo Smith Kline
HSBC–Hong Kong Shanghai Banking Corporation
JP Morgan Chase Co.–John Pierpont Morgan Chase Co.
KPMG–Klynveld, Peat, Marwick, Goerdeler.
RBS– Royal Bank of Scotland.
Executive Summary Corporate Social Responsibility or CSR, commonly regarded as a mere by-product of modern corporate system and a tertiary concern for corporations, has proven to be an interesting field of study in recent times. This research focuses on the bottom-up aspect of CSR by assessing the extent and effect of the involvement of local communities in the development and delivery of the CSR policies.
The primary motivation for the Richardson Institute and Maslaha in the commissioning of this joint project was to assess the extent of the bilateral relations that may or may not exist amongst the communities and the corporations through their engagement in the businesses’ CSR policies. Though there is an existing abundance of literature and analysis on the subject of CSR, in the academic and popular sphere, they are highly focused on the effects of the specific CSR policies on the corporations and communities. Rarely do they ever dwell into the technical aspects of formulation and implementation of these CSR policies. Even less so often do they pay attention to the objective of this research, the role of community involvement in these formulation and implementation processes. The assessment of these technical relations are important as they have the potential of providing us with valuable insights into the particular effect of community involvement on the results of the various socio-political processes that develop through the consolidation of the expertise of different sectors.
One such process which is of particular interest is that of social mobility. By assessing the extent of community involvement one may be able to assess the effect of community involvement on the social mobility of various sectors of the society. This may occur either through the inclusion and development of devices and schemes that would help achieve the objectives of the various community sectors, but also through simply gaining and increasing their leverage in the social edifice. Thus any research focusing on community engagement is especially of interest to grassroots organisations such as Maslaha as it helps them to gauge the social situation and allot their resources efficiently and effectively so as to achieve the best possible results. The motivation for this research was also quite topical due to current political environment, wherein in the wake of the rise of extremist groups such as ISIS abroad, one has seen a move towards extremist tendencies amongst the British Muslim youth and severe disenfranchisement from the mainstream society. The research may also prove to be useful for the various corporations as an additional variable into their CSR policy equation so as to secure traditional aims such as shareholder value and media representation amongst the public. However, it may also serve a useful tool when formulating their expansionary policies in other departments as the research may provide valuable insight into the reactionary and incentive mechanisms present in various local communities, which the corporations may be able to harness to achieve mutual benefits using CSR policy tools. As such it can be seen that the successful conduct of this project may prove to be a useful resource for many stakeholders; corporations, communities, research organisations, governments alike.
Literature Review Before engaging with the specific methodology that we were to use in conducting this largely practical and primary project, it was essential that we carry out a primary literature review in order to gain a working knowledge of approaching CSR from a research rather than overly academic capacity. However, it became apparent early on that this discipline within the social sciences was both highly contested and overly theoretical due to a focus on providing a theoretical definition to what is a markedly fluid and non-homogenous corporation-societal relationship. As outlined by Schick et. al.:
‘Though voluminous, the corporate social responsibility literature is vague, ambiguous and contradictory. The rest is a lack of clarity that is apt to leave even the most well intentioned companies confused and uncertain about what actions are required of ''socially responsible'' firms’[Con85]
Indeed academics criticised the lack of a clear, universally applicable definition provided for CSR numerous times:
‘Sparked by a relatively simple idea- corporations have obligations to society that extend eying mere profit making activities, scholars have struggled to achieve a clear paradigm- let alone a common language to guide the conversation. For example, Carroll (1999) reviews and discusses over 25 different conceptual definitions of CSR within the academic literature. The variety of definition leads to confusion regarding how CSR is operationalised and measured’ [God07]
This ambiguity was particularly problematic when attempting to approach as specific as CSR approach as Maslaha was interested in, community involvement, as opposed to the numerous definitions provided for general top down corporate initiatives. As such the group made the decision within an early design session to front the set of questions the corporations to be investigated would receive with asking companies what they defined CSR to be, or how they approached community involvement in order to provide a comparative element to our research and analysis. This methodological approach to assess companies on a case by case rather than essentialised policy based entry point was further guided by the effective conclusion made by Godfrey et al:
‘Our agenda for future research on CSR began with a funded entail assertion, CSR activity is not one comprehensive activity but rather a collective name for many different activities’ [God07]
Specifically, this workable framework to approaching research into CSR was useful in informing the group of the importance of moving beyond a simplistic analysis of CSR policies themselves, but encouraged the group to ask more conclusive questions such as the extent to which the corporations impact up the communities in which the policies are carried out, and the degree to which the community is itself involved in the policy making process.
Despite extensive primary research and literature review, it was proved to be extremely difficult for us to ground our project in any owing to the distinctive nature of the project.
Methodology Primary Directions The methodology for the project was largely influenced by the directions and the intended project goals that we received from our liaison atMaslaha, Ms. Sarah Hobbs, Senior Project Manager, in view of the organisation’s larger objectives. Sarah outlined Maslaha’s area of interest and the perceived means and goals for this project. Firstly it was reiterated that the main objective of the project was not to research the top-down CSR initiatives of individual corporations but to assess the extent and effect of community engagement in the formulation and implementation processes on the CSR policy outcomes. This analytical objective had a knock on effect on our methodology as it was made clear that the project was to be carried out largely through primary research mechanisms. This was mainly a result of the distinct nature of our primary focus. Throughout our process of literature review we faced a running theme that though there was abundant literature available through reports from the corporations themselves and other independent research bodies on the effects of the CSR policies of the community, there was rarely any light being shed upon the role of community involvement in the formulation of these policies. Thus it was mandated that the project were to be carried out as a primary research. We were also provided with a primary list of corporations of interest by Maslaha.
Formulation Following the directions from Maslaha we began the formulation of the methodology. In order to be make our project temporally feasible while at the same time representative of the larger British corporate industry, we added and removed certain corporations from the original list provided by Maslaha. The final list of the corporations studied are as below.
Automotive Sector:Jaguar/ Land Rover, Rolls Royce
Banking Sector: Ernst & Young, JP Morgan, HSBC, KPMG, RBS,
Consumer Goods Sector: Associated British Foods, John Lewis, Tesco
Pharmaceutical Sector: Boots, GSK
Services Sector: British Airways (BA), Clifford Chance, Laing O’Rourke, Post Office
Social Enterprises & Misc.:British Petroleum (BP), City Gateway, Google
The requirement of primary research mandated that we personally contacted the respective CSR personnel at the various corporations. We decided that we would do so by initially contacting them online through emails or contact forms available on the websites of the corporations. To establish this initial contact we also formulated an email template. Though primarily aimed at request permission to hold meetings either in person, through phone or skype it also included other aspects such as introductions to the Richardson institute and Maslaha, an overview of the project and its objectives, sample questions that they may be asked during the interview, data protection clause etc. The email template could be found in Appendix A
The next step in our project was to formulate a questionnaire that would help us better investigate and research the objectives of the project. These questions covered a diverse area of inquiries, from the definition of CSR according to various corporations to the various effects on their corporate structure through the implementation of these CSR policies. A detailed explanation of this questionnaire could be found in Appendix B. Thus the methodology was carefully designed to be as conducive as possible to collecting relevant data within the allotted period of time.
Primary Approval- Ethical Considerations As the research was to be conducted through interpersonal interviews via telephone and / or Skype, in addition to email correspondence, the proposal and our questions then needed to be approved by the Richardson Institute. This was carried out in order to ensure the project fulfilled the Richardson Institute’s ethical guidelines and requirements; specifically regarding data protection. Once this was approved and all relevant consent forms attached to the initial approach draft emails, the project was ready to be started.
Secondary Approval- Project Objectives Once the methodology for project was finalised, the group decided to seek further approval from Maslaha, in order to ensure the project was meeting the requirements of the initial research proposal. Some changes were made in terms of the length of the report as Sarah informed the group that the research would be published as an online document. This enabled the group to decide on the tone and audience the report would be engaging with to more accessible and informative rather than overtly formal or academic. Finally, a deadline for the report was set for the 30th April 2015.
The various stages of our methodology formulation process are explained in the flowchart below (page 6).
Execution Contact Phase Following the finalisation of our methodology we began the execution phase of our project. In order to provide an analytical and temporal structure to our research, we divided and contacted the nineteen primary corporations of interest through the following sub-groups.
Sarah & Eleanor - HSBC, KPMG, RBS, JP Morgan, Ernst & Young, Clifford Chance.
Panagiota & Alexandra - Google, BA, John Lewis, Tesco, Laing O'Rourke, Royal Mail
Ana & Mustufa - Associated British Foods, Boots, BP, GSK, Rolls-Royce, Jaguar/ Land Rover and City Gateway.
We utilised the websites of various corporations as our primary sources of contacts. Though most of corporations had an accessible and approachable contact mechanism to their CSR teams and policies, we did face certain technical difficulties while gaining access and contacting some, namely, Associated British Foods and Boots.
Having completed our initial approach either through emails or telephones, we provided the CSR teams a reply period of two weeks. Within these two weeks our approaches did receive replies from the CSR teams of the following companies: HSBC, Ernst & Young, JP Morgan Chase, and BP. However, none of them were able to provide us an interview, stating reasons such as “......we receive hundreds of requests to complete questionnaires or surveys. Our policy is to decline these requests and therefore I am unable to assist you on this occasion.” - BP UK Social & Community Affairs. Following the unproductive nature of these replies and having not received any correspondence for any other companies than those mentioned above, we extended our reply period by another two weeks owing to the fact that the contact phase coincided with the Easter vacation period. This may not have given the CSR teams the opportunity to engage with the correspondence emails. However, after a combined reply period of one month, the CSR teams of majority of the corporations failed to either approve or deny our requests.
Thus the research group faced an investigative hurdle, in that of all the initial corporations that were contacted through their respective CSR teams contacted, majority of the CSR teams either.
a) Failed to respond to our correspondence in the assigned period of one month.
b) Redirected us to their corporate performance web-areas and annual reports or,
c) Responded to questions of their choice from the list, for example only providing an answer to the first question; ‘please outline your CSR approach’.
The main reasons cited were an overload of similar requests being received.
Initial Findings Despite the unsuccessful endeavour of establishing contact and securing an opportunity to conduct interpersonal interviews, the response pattern portrayed by these corporations has revealed certain themes and has helped us construct certain hypothesis.
1) Corporations which have been alleged of having a negative representation in the popular media, historically and recently, have been more proactive in their correspondence than those who are considered socially acceptable. For example BP responded within 5 days compared to John Lewis which replied to the initial contact email after 6 weeks.
2) Corporations which have a global and local orientation had a more accessible and approachable contact mechanism than those with a national focus. We were unable to establish initial contact with national corporations such Associated British Foods and Boots due to an inadequate and inefficient contact mechanism.
3) Despite having an independent CSR team, primarily, corporations have declined our request to participate in the interpersonal study and have directed us to the publicly available reports and data.
4) Corporations and business that are popularly perceived to be more receptive to such research initiatives were less likely to participate. For example, social enterprises such as City Gateway did not respond to the initial contact email.
Secondary Formulation & Complementary Plans Our initial approach, undoubtedly, was able to retrieve significant information that enabled us to construct certain important hypothesis based upon the observed themes. However, we were not able to prove the validity of these hypothesis as they did not have any substantial basis. Hence the research group was obliged to reassess the status of our research parameters and criteria of company selection, and make a joint decision on how to conduct the project further. The section below illustrates the various plans that we were able to formulate and then submit to Maslaha for their approval following the reassessment of the project. These contingency plans are not be seen as alternatives to our initial methodology but as possible additional research plans that complement our initial findings.
Adopting a bottom-up approach by contacting the local and regional offices of the large multinational corporations, rather than contacting the CSR teams at the headquarters, so as to maximize the possibility of establishing contact.
Approaching corporations (multinational or local level) with more focused and/or specific questions, i.e. disseminating the specific interests of Maslaha; to look at a specific issue (radicalisation) or community (ethnic minorities, regions, class and/or profession etc.)
Contacting smaller corporations such as local business and social enterprises who may have the time, resources and interests to participate in the research initiatives and contribute towards the project aims
Conducting our research based upon the existing data and analysis dedicated to CSR and made available by the corporation through their annual reports and websites.
However this reassessment process touched upon various aspects of the project, including the trade-off between primary project aims and the feasibility of conducting further research, based upon these aims. As Maslaha had provided us with a list of corporations consisting mainly of large national and multinational corporations, we decided that changing the focus to a more local or lower level in the corporate structure so as to enhance the possibility of attaining some level of correspondence would be diverging from the fundamental research proposal.
Where companies didn’t respond, we decided that we undoubtedly have to examine the reasons behind this lack of response. The silence itself raises several pertinent questions. For example, keeping the nature and purpose of our research in mind -notably the underlying questions regarding why companies engage with CSR- the reluctance to engage with the research institute in itself reveals a potential dichotomy between the prominence given to CSR from a media relations perspective and the willingness to dedicate an equivalent amount of time and resources to engaging with initiatives and research that offer no such immediate or direct public relations and reputational benefits.
Also, in line with ensuring our methodology is ethically sound, both preceding and antecedent to the completion of our research, it was imperative that Richardson Institute refrained from automatically labelling non-responders as anti-CSR/ uncooperative etc. Rather we intended to examine a range of possible explanations with the intention of providing a comprehensive analysis. Within this analysis we aim to evaluate our methodology and research approach to ensure future research proves more fruitful. Rather than solely focussing on the possible reasons for non-participation, we persevered to take a balanced approach when evaluating our progress so far, and err on the side of caution in our assumptions. For instance, it has been clear from our preliminary research and initial finding that corporations have invested time and resources into producing comprehensive CSR reports and/or web-areas. This has clearly had an impact on the willingness of the companies contacted to participate in further research. Regardless of how we interpret this, it has certainly been useful in guiding our adapted methodology.
Thus this rigorous process of reassessment in light of our initial responses or the lack thereof, led us as well as Maslaha to conclude that the approach that should prove to be most conductive and could help improve and complement the initial research and findings would be to by conduct further research based upon the existing data and analysis already made available by the initial corporations of interest through their annual reports and websites.
Sector Based Reports As seen above the resultant outcome of the reassessment process yielded that to complement our existing findings we must conduct further research on the CSR outlook of the initial corporations using any credible data and analyses available through reports on public access and open data schemes. Though there wasn’t a specific and stringent criteria or focus used during the formulation of these reports, they were broadly analysed using analysed using the primary sector based approach, so as to not only to provide a structure to the report but also to allow us to discern any observations and themes that may arise. Below are the subsequent findings that proved to be of most relevance to the primary project aims as well as of most interest to the research group.
Automotive Sector The first sector that the research group investigated was the automotive sector that included two British multinationals, Rolls Royce and Jaguar/Land Rover (A joint venture owned by the Indian Tata industries since 2008). A clear commonality amongst the two companies of interest is that their CSR policy was driven primarily by environmental and sustainability objectives as compared to the community focus of other sectors. This is perhaps due to the corporations’ nature as car manufacturers, they are often criticised for their environmental impacts due to their large CO2 emissions resulting from the manufacturing process and from the resulting vehicles themselves. This results in a clear prioritisation of time, money and energy to redress reputational concerns by both businesses, particularly within the context of increasing apprehensions surrounding climate change. For example with Jaguar/ Land-Rover being named 'Responsible Business of the Year 2013' by Business in the Community as a clear indicator of the scale of the corporations’ efforts regarding consumer perceptions of its sustainability ratings. [JLR14]
Where the companies are more directly involved within communities, engagement is largely 'top-down' and work-force led, rather than grass roots or community driven. In particular, both companies encourage their employees to carry out volunteering and charitable activities. Jaguar/ Land-Rover outlines in its annual CSR Report 2014 this as a highly successful approach with some 20% of its workforce having volunteered some 63,417 hours in 2014 alone. Likewise, in 2013, Rolls-Royce actively encouraged employee led charitable work, establishing a scheme which enabled staff to make tax free donations through payroll to their chosen charities in the UK and North America.[Rol13] This provides a forum for employee led decisions regarding the communities helped rather than assigning a few given charities to which all donations are given. Thus producing an arguably fairer and more appealing scheme to workers and communities alike. This charitable emphasis reflects the prioritisation of providing to charities within the two countries in which the organisations are based, reflecting perhaps a more local than international scale of community involvement. Notably, this provided a sharp contrast to the banking groups which, while having low level office based charity events, prioritised international scale charities through either donations or targeted company policies.
However, Jaguar/ Land-Rover, reflective perhaps of its more inclusive consumer base than the high end luxury vehicles produced by Rolls-Royce, is also beginning to develop its international community focused CSR approach as the company develops following its amalgamation in 2008. A particular stand out strategy is their 'Road to 2020' initiative which aims to reach almost 12 million people around the world by 2020. [JLR14]
Within this more global CSR policy, the company work with a range of carefully selected third party experts such as the International Federation Red Cross and Red Crescent societies, the Born Free Foundation and Climate Care to create the right opportunities for those 12 million people and to make a positive change in their lives [JLR14]with projects selected through four key areas of community involvement: education, technology and design, humanitarian/ health initiatives and the environment. In working with outside agencies and importantly CSR experts, the corporations’ approach thus reflects a clear consideration of the needs of the specific communities involved and the sustainability of the policies themselves, thus providing a particularly effective and goal orientated CSR strategy.
Indeed through such a framework, both businesses’ CSR strategies reflects an increasing aspiration to reach international scale in its education focused policies. Originating in the UK for example, Jaguar/ Land-Rover’s successful 'Inspiring Tomorrow's Engineers' scheme trained some 328,000 young people in Britain in 2013 alone. As the company expands overseas, it has resulted in the launch of the scheme in Brazil[JLR14]. At the local level, the company has proven particularly effective in improving diversity and access to training for young adults as a clear target group; with 'over 3000 Jaguar/ Land-Rover employees benefitted from masters level education since the technical accreditation scheme launched in 2010, resulting in a calculated return of investment of 20%'[JLR14]. This focus on calculated returns is particularly interesting as it reflects a clear business driven motivation behind CSR based largely on training and recruitment. Nonetheless this reflects a real commitment to using the skills and area of expertise of the company to engage with the community, albeit it is a less holistic approach than often expected of charity driven CSR policies.
Similarly, Rolls-Royce place a particular emphasis on training and educating future engineers for the business, but also in providing its technical expertise to improve education of the sciences, maths and engineering subjects. This is of particular importance as funding for these subjects has become particularly limited in the UK within the context of the Financial Crash since 2008. The scheme aims to reach some 6 million students in the UK, Germany and North America, reflecting a focus on the key countries from which it recruits employees: 'we recognise that talented engineers are the key to our future. We actively work with schools and universities to increase interest and encourage diversity amongst those taking science, technology, engineering and maths (STEM) subjects'[Rol13]
Banking Sector The third group of Maslaha was tasked to research the CSR of several international banks. Our methodology was again was restricted as all of the banking groups contacted (JP Morgan and Ernst Young, KPMG UK, HSBC and RBS) declined the approach of the Richardson Institute (RIIP) due to factors including: receiving a high volume of similar research questions, expressing that all of the information the organisation has is already available via developed web area or for undisclosed reasons for those organisation which provided no email correspondence/ response.
As such, this report is based on research gathered from each company’s CSR web-areas and Annual Reports which provide key programme descriptions and empirical measurements on the achievements the company has made both in that year but also since their CSR programmes began as the key way in which companies represent and analyse the progress they have made. In a comparative analysis, we concluded that the banking groups provided some of the most developed and sophisticated CSR online spaces and reports, perhaps due to the nature of banks as international organisations, but also taking into consideration the role of the Global Financial Crash (2008) in which many governments and bodies placed the blame on international bankers themselves, as a way to recover a positive relationship between banks and the community and thus a positive PR image.
“We must be clear – trust between business and society is substantially broken. It needs to be repaired and rebuilt urgently if we are to achieve sustainable economic and social recovery.” [Cor15]
All of the banking groups identified the scale of their definition of ‘community’ as two tiered, aimed at:
1) Both charity and not-for-profit partners
2) Operating at both a national (United Kingdom) and international level.
The scale of the majority of the banking sectors CSR approach is international in basis, although schemes operate at various levels, from local to the UK headquarters in London, to international partnership programmes across Europe, the Middle East, India, China, Japan, Singapore and Australia, America, East Africa and Brazil. At the local level, the organisation shows a real commitment to community engagement. In contrast, Ernst Young (EY) provide a particular case study of an organisation focused on the former, national level, defining their CSR strategy as aiming to ‘support our own work, run our own programmes like Smart Futures and Accelerate and work with our charity partners like the Social Business Trust and The Prince’s Trust to achieve our mission, vision and purpose.’ [Cla15]These examples indicate a range of target groups the policy is aimed at including underprivileged Children and Young Adults with the business trust and social enterprises in partnership with the Social Business Trust, both at which operate throughout the UK. The company’s CSR policy is coordinated through the Ernst Young Foundation, an independent charity registered to support disadvantaged young people into employment, education and enterprise in the UK.
Similarly to the focus placed on future generations with regard to education, opportunity provision and encouragement of young people by EY, RBS’s ‘Inspiring Enterprise’ initiative was established with the intent of providing support for three specific groups “who face additional barriers to enterprise success”: young people under 30, women, and social entrepreneurs. RBS’ self-assessments concluded RBS invested more than £54 million in the community in 2013 (compared with £57 million in 2012), and more than 40,000 employees volunteered almost 170,000 hours in the community, in company time. This community-centric approach is however one of the two most integral components of CSR for the company, with a large proportion of company CSR reports being dedicated to environmental concerns: with the bank stating “RBS aims to be a leader among global financial institutions in terms of managing our own environmental impacts as well as seeking to influence other businesses on how they manage theirs.”
JP Morgan provides a stand out example of an organisation who are active in distinguishing themselves from charitable organisations, outlining their CSR strategy as: ‘more than writing checks and giving to charity [but rather by] putting our financial expertise in the service of broader community needs’[JPM13]. Indeed, in a further contrast to the other banking organisations researched, the company frames their approach as being focus on sustainable and long term community engagement and development. JPM does not outline a prioritisation of local or national needs but strikes a balance between its different initiatives which can be subdivided into local, national and international communities. For example, their Strengthening Communities and Tackling Unemployment initiative is indicative of the prioritisation of low to moderate income communities across the different geographical groups the organisation targets rather than policy directed first by a single community. A second prioritisation is for US Veterans and Military personnel. The targeting of this group through CSR initiatives, clearly reflects JPM’s recognition of the needs of veterans in particular as a vulnerable group within American society, as reflected by the low level of reemployment of veterans being addressed through the 100,000 Jobs Mission.
Similarly to the emphasis placed on differentiation and full integration of CSR within the wider business model as espoused by JP Morgan, the establishment of KPMG’s SPRING initiative seeks to “ensure our business mirrors the communities we work in and serve.” providing the rationale that it is “not altruism or a compromise – it simply builds a better business.” In terms of implementing this, KPMG has its focus placed firmly upon areas of CSR which reflect this integrative approach; with the provision of the living wage, affordable and secure housing, literacy, fair access to their profession, and preparing young people for the world of work highlighted as the areas in which the company can make the most difference. Consequently, social mobility clearly meets the criterion of serving the interests of both the wider UK community and in turn, the business itself. In this effort, KPMG has been named in the Government’s first cohort of Social Mobility Business Compact Champions, as a result of such initiatives as KPMG’s own BRIGHT programme (with £4.45 million worth of pro bono services delivered to youth support projects), collaboration with Free The Children and Enactus, and contribution through multiple other delivery mechanisms of education, training, planning and development.
HSBC also follows the trend that has been identified throughout this report of having gone through an existential shift with regard to its CSR policy; indeed in the same manner as KPMG and EY, the company has stated “sustainability, in the context of the financial system, has to be at its core and not seen as a parallel accountability.” in 2014 HSBC consequently incorporated its Corporate Sustainability Committee responsibilities into a new “Conduct and Values Committee” with much broader terms of reference and a seemingly wider remit. The key focuses of this group again mirror the dual prioritization witnessed within this group of companies of employability/social mobility efforts and wider, international targets concerning environmental sustainability. Initiatives within these areas included (most notably), the three-year £30 million Opportunity Partnership Programme and five year HSBC Water Programme respectively. Probably a reflection of HSBC’s professed position as the World’s Local Bank, in comparison to a company such as RBS for whom the majority of income stems from UK enterprise, the company’s CSR report presents a much broader and globally focussed analysis of successes and opportunities; with reference to activities from all continents rather than a particular focus upon one geographical location as the epicentre of their initiatives.[HSB13]
A notable feature of the banking sector initiatives were the setting of clear year-on-year targets to ensure the effective and sustainable engagement with community based groups primarily through the effective use of annual reports. Ernst Young provide a particularly useful framework within its reports which highlight the ways in which the organisation decides which policies are relevant to communities on a yearly basis and in outlining the key groups within society which policies are to be aimed at including young people, women and persons from disadvantaged communities. In particular, the organisation works closely with a number of charities whose partnership enables policies to match the key areas of community focus on a national level and on fundraising targets through key initiatives including Comic Relief and The Princes Trust.
Likewise, JP Morgan outlines the ways in which the company ensures its CSR policies remain relevant to the communities it works with. In particular, JPM outline their interaction with a number of experts from consumer policy groups and veterans groups to ensure their policies are aimed at the most immediate needs of the communities and individuals the company prioritises. Moreover, the use of sustainable initiatives, such as the recommitment to the 100,000 Jobs Mission after its quota was doubled in 2013, indicates the use of sound processes and tools to ensure that financial commitments are met and continue to serve the communities JPM seeks to aid.
KPMG solicits and receives an Independent assurance report from Grant Thornton UK LLP on “selected environmental performance and community investment information” as a means of stimulating feedback and constructive criticism regarding its wider CSR formulation and implementation process. The extent to which the end service users themselves are incorporated into this process however is omitted from the information provided by KPMG.[Cor15]
RBS’ own statement on the sourcing of feedback within its wider CSR programme is as follows: “We recognise that effective stakeholder engagement is a powerful tool for improving the way that we do business. RBS has a robust programme in place through which we identify our key stakeholders, gain feedback on material issues and respond appropriately. The effective management of the issues raised is integral as we build a more sustainable bank and work towards our purpose to serve customers well. In addition to ongoing engagement which takes place across our business each day, our Board level Group Sustainability Committee runs a pro-active engagement programme whereby we invite external stakeholders to meet with, and challenge, the most senior decision-makers in RBS. In 2013 the Committee met with 26 such advocacy groups, including Amnesty International UK, the New Economics Foundation, Federation of Small Business, Royal National Institute for the Blind and Unite.”[Roy14]
Deborah K. Holmes who established and leads Ernst Young’s Americas Corporate Responsibility function outlines how the banking groups differed in their focus groups for improving policies. While, for example, JPM engage with experts from consumer policy groups and veterans groups, Ernst Young also engages with stakeholders and public opinion to shape their CSR initiatives: ‘Through a combination of top-down thinking and listening to our people, we built a strategic focus on the 3Es: education, entrepreneurship and the environment.’[Kan13]
A final important tool several of the banking groups utilise to measure their success is the Corporate Responsibility Index which utilises feedback from social enterprises, charities and members of the public to assess the degree to which companies are making an impact within the communities in which they work. Ernst Young are, once again, a particularly effective banking group who utilises this scheme: ‘Since 2008, EYs community programme has scored 100% within our Corporate Responsibility Index submission’[Ern14]
Consumer Goods Sector John Lewis: According to John Lewis’s Constitution, for instance, ‘The Partnership aims to obey the spirit as well as the letter of the law and to contribute to the wellbeing of the communities where it operates’. This commitment is supported by the organisational structure of its CSR policy: the Partnership has three foundations and two trusts that use different financing schemes and are designed for different purposes. Funds for the Waitrose Foundation are collected from a percentage of profits and used for projects ‘chosen by local farm workers and smallholder committees’. The Golden Jubilee Trust, in contrast, grants secondment awards to charities across the UK which give the latter a chance to benefit from the skills and competence of the Partnership’s employees. Alongside with raising funds and donating time and skills, John Lewis enacts its CSR policy through a range of other instruments. The company employs Community Matters scheme that operates on the principle of nominating local causes and issues, that, according to customers’ and Partners’ opinion, are vital for the lives of local communities and deserve to be addressed at the first place.[LGB15]
Tesco: In 2013 Tesco adopted a new CSR strategy that claimed the issues of food waste, health and youth unemployment as central to the company’s efforts. [Tes14] The social responsibility committee monitors the reification of the company’s principles and commitments in its work with the local communities. Among the resources invested into communities are direct money donations through charities, food donations, and educational programmes for young unemployed people. Tesco uses specific channels of communication with communities, one in the form of centrally funded Community Champions that coordinate social activities of the company in close contact with potential beneficiaries, and Young People’s Panels, functioning across Europe. The aim of the latter is to establish solid communication links with European youth, enhance informational climate about current issues faced by the young generation. According to the official information, each Tesco local store allocates its own funds for support of a local community and charities operating in them.
Associated British Foods: ABF is divided into five sectors: Sugar, Agriculture, Retail, Grocery and Ingredients. For this reports purpose the main focus will be on Agriculture and Retail sectors because these are the largest contributors to communities within the UK with ABF.
ABF believe that they have are responsibility to be a good neighbour. They operate in over 200 different communities, which diverse with some that are prosperous and some that are vulnerable. George Western states that it is “our management teams in each location must decide what we must do to be welcomed wherever we are and to contribute to the local communities wherever we operate”[Ass15]. ABF uses their engagement with stakeholders as a main effort to ensure ethical business. These stakeholders can be communities, industry bodies and employees. They also use NGO´s to identify practices that can be improved and collaborate with them to deliver these improvements.
ABF also states: “We recognize our responsibility in the places which we operate we encourage and encourage our business to engage positively with their local community” [Ass15].
In the agricultural sector they have a rural action Leadership team. It´s goal is that every business should understand their impact and recognize what it can contribute to. AB Agri, which is a subsection of the ABF Agricultural sector, supports local schools and students. Their main aim is to teach them about science and farming to encourage people to think about a career in agriculture. One example of this is financial support and a leadership role in the establishment of Bright Crop, which is a cross-sector imperative. “Bright Crop is the first industry-led initiative focused on changing the perceptions of agriculture amongst young people to attract the best and brightest into the food supply sector” [Ass15]. It does this trough a website which explains the benefits of agriculture, links to existing careers advisory platforms and by informing people with influence. AB Argi also gives out scholarships to students who are studying a subject related to agriculture and give evening lectures in schools.
In the retail section, “Primark supports many local charitable organizations, community projects, families and individuals across the UK and Ireland, and the continental European countries where stores are located.”[Ass15]. They further state that they get requests daily and which they try to accommodate, including causes involving children, education, people with disabilities, healthcare and the elderly. They do this through donations of money, gift cards and merchandise. One example of this is that Primark has a long-term partnership with Newlife Foundation where they donate all unrequired goods and costumer returned goods. The goods are then recycled and the profit goes to the Newlife foundation for disabled children. The money is then used to pay for “equipment such as wheelchairs, pain-reliving beds, communication aids, nurse service, medical research and campaigning and awareness activities”[Ass15]
Pharmaceutical Sector This section of the report will contain research on CSR in the Pharmaceutical sector. Our methodology was restricted due to the lack of response from Boots and GlaxoSmithKline (GSK). Which means that this section of the report will be based on the company´s own CSR reports.
Boots: Boots focus on four main aspects in their CSR policy: Community, Environment, Marketplace and Workplace. These are changed by ongoing consultation and dialogue with a wide network of stakeholders. All the sections have a long-term plan with assigned accountability and responsibility to deliver.
· Community: Patient-led cancer care, volunteering, healthy communities, fundraising, boots charitable trust.
· Environment: Energy and carbon, transport, waste and rescaling, chemicals, sustainable materials
· Workplace: health and safety, workplace health, learning and development, diversity.
Within these four factors sectors there is in particular four areas that Boots stakeholders see as critical: Climate change, the increasing pressure on natural resources, youth employment and town centre regeneration to help bring communities together[Boo15]. These are the main factors of Boots CSR policies that are reflected in a scorecard. They review the scorecards regularly in order to ensure that they best reflect current issues, that meet the need of the different stakeholders, and that are aligned with Boots business strategy[Bui13].
Boots has a large focus on communities in the UK. They believe that by implementing their CSR policy they can play a “valuable role in the nation´s health and wellbeing by making our experience and support widely available – not just through our stores, but wherever we can, helping to build healthier, happier communities” [Boo14]. Boots wants to have an impact in the communities where the consumers and colleagues live and work, by using their healthcare and beauty expertise. The company further acknowledges they mostly work through long-term CSR partnerships [Boo14].They have partnerships with other charities such as BBC Children in Need and Macmillan Cancer support. These partnerships are very important to boots. They are working through “strategic charity partnerships to create and deliver local opportunities for young people in their communities throughout the UK”[Boo14]. Boots has a 10-year relationship with BBC Children in Need, focusing on raising money. Raising GBP 1 million in 2013 [Boo14]. But, they also do volunteering with the main focus being that boots colleagues giving up their time to help the communities, ranging from fixing parks and volunteering for the Macmillan cancer support scheme.
Boots also has a charitable trust; witch gives grants to registered charities and smaller voluntary organizations. Their policy, however, does only include charities that help people that live in Nottinghamshire [Boo151]. The trust will consider giving grants for most expenditure, such as salaries and running cost. Their policy also states the charities has to focus either on Health, Life Long Learning (literacy, numeracy projects etc.), Community Development (helping people to organize and respond to problems and needs in a community) and Social Care (personal social service, social preventive schemes and community social activities)
Glaxo Smith Kline: GSK have a different approach than Boots, they have a greater focus on healthcare. The main priorities in GSK´s CSR policy are calculated in terms of the stakeholders and the business success. GSK´s commitment is that “extended volunteering opportunities to bring about positive change to communities and global health while providing individual development” [GSK14]
GSK uses four main aspects in their CSR policy: health for all, our behaviour, our people and our planet.
Health for all: Health challenges remain a fundamental barrier to economic development and quality of life. GSK aims to make a real contribution too meeting these challenges. They want to do this by increasing access to vaccines and medicines around the world. Especially focusing on Africa. Focusing on accessibility, availability and affordability [GSK13].
Our behaviour: ethical conduct, promoting values in sales and market values, transparency of clinical research, patient and consumer safety, animal testing, human rights impact, etc. [GSK13]
Our people: protecting the health and wellbeing of our people, promoting inclusion and diversity, community volunteering, [GSK13]
Our planet: “We are committed to reducing the environmental impacts of our operations and our products”[GSK13]
GSK has a more international CSR policy then Boots, meaning that they focus more on CSR abroad then Boots which has a more internal CSR policy, which focuses on CSR in the UK. GSK states: “We encourage our people to volunteer their time and experience to support communities across the world”[GSK14]. They mainly do this trough their PULSE Volunteer partnership which enables their employees to work full time with a non-profit organization or charity for three or six months [GSK14].
GSK “ value engagement with a range of external stakeholders as an effective tool for gaining deeper insight into societal trends and expectations, as well as offering us the opportunity to challenge our own assumptions about the way we work”[GSK14]
The big difference between Boots and GSK is that they have different focuses in their CSR policies. Boots has a main focus on helping charities, doing volunteering, or donating money to local charities. GSK on the other hand has a larger focus on bringing “Health to all”, meaning that they have a more international CSR policy.
Services Sector British Airways: British Airways considers its Corporate Responsibility programme as ‘a core part of [its] business strategy’. The umbrella ‘corporate responsibility’ term thus becomes projected onto different areas of potential attention, such as the social sphere and well-being of the local communities. The company’s approach towards communities is based on four pillars: 1) Flying Start - a corporate charity in partnership with Comic Relief, raising funds for children in the UK and overseas since 2010; 2) colleague volunteering both in the UK and overseas; 3) the British Airways Community & Conservation Programme; 4) the Community Learning Centre which provides educational opportunities for schools and colleges in the Heathrow community. BACC framework deserves specific attention as long as it functions as a mutually beneficial scheme for British Airways and its UK partners. Within this framework BA provides UK based charities with a range of its services (flight bursaries, excess baggage and cargos) in exchange for being involved in local and overseas projects, which helps to bring its expertise and skills to the field as well as increase business sensitivity towards the issues and concerns of vulnerable groups of population across the world. British Airways has also been active in the sphere of emergency relief, providing transportation for cargoes and personnel for international humanitarian organisations.[LGB15]
Royal Mail: As it is stated in the Community Strategy of Royal Mail, the company seeks to contribute to the local communities establishing connections through business, employees and connecting with tomorrow. This strategy reflects global trends among multinational and national corporations and companies that give preferences to impacting local communities through charities, funds or other donation schemes, as well as volunteering hours and support for educational activities. Royal Mail employs a variety of financing instruments, such as Charity of the Year scheme with RM colleagues voting for a charity that will receive donations, Matched Giving scheme that encourages RM employees to raise funds for local causes (the total amount than will be matched with money donated by the company itself), and Payroll Giving scheme that has been functioning since 1989.[Roy15]
Laing O’Rourke: One of the strategic aims of Laing O’Rourke is formulated in the company’s official report as ‘a positive public legacy’ and ‘transformational projects’[Lai14]. The document also contains such term as ‘a sustainability roadmap’, with the specific attention focused on environment, people, industry, and community. With two hubs, operation in Europe and Australia, the company supports local people through employment, educational and engagement opportunities. The Australian hub, for instance, provides the local indigenous population with training necessary for their future work in the construction industry. Among the charitable funds within the company, ‘Transforming the Future’ supports projects that promote learning opportunities. Other traditional resources, employed by Laing O’Rourke as part of their CSR strategy, are volunteering hours: the company’s employees are able to use paid volunteer leaves in order to contribute to the lives of local people. Laing O’Rourke underlines the role of communities as a talents and diversity source; the commitments to invest in the CSR policy are mentioned side by side with the goal to enhance the image of industry itself.
“By supporting local employment and business opportunities we enrich the lives of those we work alongside, while benefitting ourselves from much needed talent”[Lai14]. They further state that inventions are important to them to prevent unhelpful perceptions of the industry. For this reason Laing O’Rourke works closely with schools and colleges to “promote science, technology, engineering and maths – and demonstrate to young people of all backgrounds the variety of existing careers we can offer them”. Laing O’Rourke is also working on a society action plan. Its aim is to help the sites and the offices to develop strategies that support “engagement, employment, development and diversity – tailored to the specific needs of the surrounding community” [Lai14].
One example of this where staff from Tottenham Court Road project established a partnership with the Maria Fidelis School for Girls in Kings Cross, London after a weeklong careers event. This partnership includes ongoing events throughout the year. This can be reflected in the fact that Laing O’Rourke has a backed government campaigns in the UK and Australia to encourage women to have a greater participation in engineering and construction. Thus, they inform; “we have committed to some very stretching targets to increase the proportion of women among our recruits” [Lai14].
Another focus in Laing O´Rourke CSR policy is to tackle unemployment. They do this by supporting undergraduate placements and giving work experience. They look further at unemployment through National Skills Academy for Construction, where they have “secured support to maximize training and employment opportunities across northwest England” [Lai14]. Moreover, they have engaged with their supply chain to identify training needs and then to find skills coordinators to help them get the knowledge they need. This has led to 23 new apprenticeships and a higher engagement in schools. In addition to this Laing O´Rourke does encourage their employees to actively support good causes. They do this by volunteering hours, raising money for local and non-for-profit organizations and donating materials [Lai14]. One example of this is was a request from a community boxing club to the Manchester-based team, requesting some minor repairs. Staff from Laing O´Rourke and Crown House Technology then decided to renew the electrical system and provide them with heating, fans, new showers, etc.
Laing O´Rourke has also established a charitable fund, called transforming the future. Where the main aim of the scheme is to “support projects that promote education, employability and engagement” [Lai14]. The donations from the found was made by employee initiative.
Clifford Chance: The centralisation of a Community based approach within the CSR strategy of Clifford Chance is most clearly illustrated in the organisations definition of CSR which largely reflects the company’s legal background:
‘Our vision is to implement an outstanding programme that has a significant positive impact on our firm and the communities in which we operate, in support of our ambition to lead the elite group of international law firms. Our vision is underpinned by three priorities- our people, our community and our environment’[Cli15] The scale of Clifford Chance’s programme is international in basis, although schemes operate at various levels, from local to the UK headquarters in London, to international partnership programmes across Europe, the Middle East, India, China, Japan, Singapore and Australia, America, East Africa and Brazil.[Cli13] At the local level, the organisation shows a real commitment to community engagement. Also, Similar to the banking Clifford Chance sets clear year-on-year targets to ensure the effective and sustainable engagement with community based groups primarily through the effective use of annual reports. In 2012, Clifford Chance launched its ‘Helping 100,000 People’ campaign to reach 100,000 people by 2015 through community outreach and pro bono work. After reaching 137,478 people in 2013 alone, this scheme has been amended to reach 100,000 people per annum[Cli13]reflecting an effective use of targets and annual reviews in order to maximise community outreach. The company also works in partnership with the UN Environment Programme, marking World Environment Day (WED) for a day of environmental action. In 2013, the company reports the WED ‘Think. Eat. Save’ anti-food waste campaign was a success for the company with ‘colleagues in Bangkok trading scrap paper for plastic food containers. The London office ran a series of food knowledge quizzes and teams in the Middle East donating dried food to a charity that distributes food to workers and families in crisis.’[Cli13]
Miscellaneous British Petroleum: The nature of the CSR policies exhibited by British Petroleum (BP) largely follow suit to those of the automotive sector possibly owing to the fact that both the sectors, automotive and petrochemical, operate in and carter to a similar resource and consumer market. Also, due to the technical similarity in the effects and impacts of their manufacturing processes, they face similar environmental, governmental, market and reputational challenges. As stated in their ‘Sustainability Report, 2014’, BP understands that their “….operations can bring about major changes to societies and communities, which can have significant impacts – both positive and negative.”[BPS14] This is indeed reflected through their CSR initiatives, in the UK and abroad. However, despite their commitment towards the society, the CSR initiatives of the petrochemical corporation present a disagreement or at least an ambiguity in the degree of community engagement in these approach towards the realisation of this commitments in Britain as compared to those abroad.
On the international front BP has endeavoured to engage with the communities within which it functions and has been considerate of the communities’ concerns not only in its CSR policies but also in its larger operations. This is evidenced through its operations in Indonesia, when planning for the expansion of the Tangguh LNG project in Indonesia, public consultation meetings with representatives from 62 local villages were held, to discuss their views, concerns and aspirations in relation to the project and the existing social programmes[BPS14]. BP has also been working with oil and gas industry association IPIECA, the global oil and gas industry association for environmental and social issues, to develop tools for managing community grievances and plan to test these for use in their guidance and training structure, thus demonstrating BP’s efforts and focus with efficiently managing not just the issues of its consumer and stakeholder but also those of the communities within which it operates.
However, this bottom-up approach to managing its CSR as well as its larger business on the international front has not been able to trickle down to the management of its CSR policies at home in Britain, where it adopts an approach which is much more top-down and directive in nature. BP engages with the British community through its ‘BP in the community’ structure[BPi15]. This structure consists of three spheres of involvement first of which is ‘Developing Capability’. The developing capability sphere of involvement includes resource and capacity building programmes such as ‘BP Educational Service (BPES)’, which “create high quality teaching resources for STEM teachers to demonstrate real world contexts for learning. The resources are for UK primary and secondary schools and are used around the world.”[BPi15] This and many other initiatives bare a strong resemblance to those of the automotive sector wherein a continuous development of the STEM subjects not only assists the community, but also helps the corporations create an equipped, educated and engaged work-force in the long- term. The next sphere of involvement is ‘Building community capacity’. BP states that, “We encourage BP employees to support community organisations and charities through volunteering and charitable giving. Working in partnership with community organisations and small businesses, our employees share their business expertise through project specific support and leadership roles, working directly with local community and business leaders.” An interesting aspect of this initiative is the ‘The Employee Matching Fund’, through which BP Foundation manages its charitable giving- “The Employee Matching Fund supports charitable causes chosen by employees. Each employee can access up to US$5,000 (in total) per year of matched personal contributions, volunteer time and funds raised in sponsored pledge events. This encourages active fund raising and volunteering, as well as enabling employees to feel that BP values and rewards their energy, enthusiasm and time in working with charitable organisations and community groups”[BPi15]. The last sphere of community involvement in Britain is ‘Connecting with Culture’, wherein BP is one of the most significant corporate investors in UK arts and culture through its major partnerships with the British Museum, the National Portrait Gallery, the Royal Opera House etc. As it can be seem from the broad analysis above though BP does assign relative importance to community engagement in its CSR policy formulation, it is largely restricted to its international operations and has no observable presence in its domestic operations in the UK, where its CSR policies are much more dictated and regulated.
City Gateway: City Gateway, an organisation based in East London, presents a unique and interesting stance to community engagement. The organisation defines itself as “…a charity dedicated to bringing hope to the local communities of Tower Hamlets that haven't benefited from the area’s wider economic development.”[Cit14] However, its operations bear more resemblance to that of a social enterprise than to that of a charity. Essentially it mediates between City corporates and local communities by functioning as a philanthropic organisation in the communities of Tower Hamlet while at the same time being the recipient of corporate philanthropy and assistance[Wor15]. It has done so by embedding itself in the community not only through its philanthropic and capacity building activities such as apprenticeships, traineeship and other vocational course but through the inclusion of the disadvantaged individuals of the same community into its organisational structure through employment with its various enterprises including catering services, gyms, spas etc. and following its corporate partners the completion of these vocational courses. Thus community engagement is not a part of the CSR policy but is fundamental element in its business structure. Thus it acquires an advantage through accessibility to community issues and meaningful knowledge or connections that it establishes, which the large scale corporations may not be able gain. Thus the advantage that City Gateway gains as a result of its business model helps both the communities and the corporations achieve their desired aims. By acting as a resource pool and distribution hub of trained and qualified work force.[Cit14]
Google: In recent times, international technological corporations have earned a reputable clout in the field of CSR. Google, which has tied at first position along with other technological giants such as Microsoft and BMW in recent survey carried out by the independent research consultancy Reputation Institute is one such corporation. Google has been a pioneering example in the field of global and local social aid through its charitable arm, Google Giving. It boasts that “Each year, we donate $100,000,000 in grants, 80,000 hours, $1 billion in products.”[Goo15] It has been engaged in diverse spheres, ranging from providing disaster relief in the aftermath of Hurricane Sandy to seed funding to upcoming non-profit organisations in Africa. Google in not only providing assistance to the various stakeholders locally in the San Francisco Bay area, where it is headquartered, but is supporting various global initiatives.
However, despite such immense contribution in the field of international social responsibility the initiative structure that it utilises in engaging with the recipient audiences is extremely innovation and technologically driven. One such initiative that is operated in the UK is the ‘Raspberry Pi’, wherein a grant of “$1 million grant will provide a free Raspberry Pi, a low-cost microcomputer, to 15,000 UK kids who are enthusiastic about computer science.” These and many similar initiatives in other nations such as Ireland, France and the US bear a striking resemblance to and repeat the pattern of those initiatives in the automotive and petrochemical sector; wherein a major consideration within the CSR strategy is to reinforce the corporations existing fields of operations whether it be engineering, climate change research or in this case technological advancement. Speaking of the Raspberry Pi, the Google Giving website states, “The project will provide an opportunity for thousands of young people across the UK to learn to code by increasing access to computers. The ultimate goal is to inspire the next generation of British computer scientists.”[Goo15]
Another initiative that brings forth this point on a global scale is the Google Impact Challenge, wherein, Google “travels to different regions, asking local non-profits how they would use innovation to make a better world, and inviting the public to vote for the projects with the greatest impact potential.” Jacquelline Fuller, director of Google Giving, says: “At Google we are big believers in the power of technology. Giving back is a huge part of what motivates us as a company, and as individuals. We invest in social entrepreneurs who are using technology to crack the code on the world’s toughest problems.”[Smi13] Last year, amongst the recipients of the awards, included ‘WeFarm’, a Peer-to-peer communication service to help farmers improve their livelihoods and Royal Botanic Gardens Kew for a project focusing on Crowdsourcing data to help prevent mosquito-borne diseases. Thus as it can be seen that the engagement that Google has with the stakeholders within the community is unilateral and heavily competitive.[Goo15]