Social value is created when resources, inputs, processes, or policies are combined to generate improvements in the lives of individuals or society as a whole. It is crucial for any organization to be able to demonstrate the value it creates by its very existence. Corporate social responsibility (CSR) has never been more important. Citizens nowadays demand a responsible business behavior from all kinds of organizations, corporations, and their leaders who have become aware of the crucial role of social responsibility in seeking performance excellence and sustainable growth. This chapter introduces the concept of CSR and explains its importance providing the historical background that made it synonymous to sustainability. The benefits resulting from CSR are briefly presented while the main recent developments in the area of CSR and sustainability are analyzed. Particularly, emphasis is given on the 2030 Agenda, the European Directive (2014/95/EU) on non-financial reporting, and the recent trends for socially responsible investments.
TopShifting Towards Corporate Social Responsibility
The shifting towards a more responsible way of doing business was thought to be a simple and very easy step. For many years, CSR strategies have been espoused by the international business community, in a great number of sectors of the economy, such as banks, retail organizations and public and private service providers. Progressively more and more businesses appreciate the role of CSR and wish to engage in positive social actions and communicate these to their stakeholders. (Antonaras et al, 2017)
Although many organizations have already tried to adopt this new approach, only few are those that have managed it successfully. This is mainly due to the fact that before applying CSR activities it is necessary for an organization to reform its corporate strategy, without eliminating its existing cultural elements. Crafting a CSR strategy is not a goal that can be accomplished from one day to another. It requires very precise planning, overall participation, well-managed operations and definitely continuous evaluation. Moving from the stage of simply doing profitable business to providing products or services in a responsibly profitable manner might be highly expecting.
Traditionally, organizations were interested in short-term profitability, operating for a general nonspecific purpose. In other words, their vision was based solely in quantitative perspectives like maximizing the shareholder wealth, without taking into consideration the other stakeholders of the organisation like employees, suppliers, and society at large. However, with the new thinking there is a need for achieving long-term profits while accomplishing specific, responsible strategic goals in a systematic way. Companies now face the challenge of providing products or services that are important and useful to their customers by fully utilizing their resources (including their employees) in a way that treats all stakeholders with dignity and respect. After all, CSR is about a company owning its impacts on individuals and communities.