1. Corporate Responsibility Index
The idea is the Corporate Responsibility Index, a ranking that reflects a company’s efforts and achievements in improving its social responsibility.
Branded as a strategic management tool, the voluntary index emphasises a principles-based approach through its weighted model.
It’s interesting because it attempts to address some of the concerns raised by sceptics who either question the commitment of companies, or the tangible benefits of corporate social responsibility initiatives. And although the index is voluntary it is attractive to companies seeking to improve their social and environmental credentials.
The reality is that even though some companies may not be motivated to improve their social responsibility for purely altruistic reasons, the end result is
that participating companies are more likely to improve the way they do
business and their impact on the community and environment.
They tried it first in the UK in 2002 with 122 participating companies. Now in its fifth year, 63 companies have participated in the Australian Index so far.
Read more at Corporate Responsibility Index.
2. 10,000 Women Initiative
The idea is the 10,000 Women, a Goldman Sachs CSR initiative that aims to provide business and management skills to 10,000 women in developing countries.
The goal is to complete the training of 10,000 women in five years through the provision of funding to universities and the development of organisations to assist with training and education.
It’s interesting because while countless corporations promote similar initiatives, this one stands out as a tangible example of what a global corporation can
potentially do with its vast resources and strong talent pool.
Goldman Sachs plans to invest $100 million of its own money plus the time of many of its staff in facilitating and training women who might otherwise not have access to such an education. The philosophy underpinning this is that education will help to reduce inequality and improve economic growth especially in the developing.
They tried it in Nigeria, with the first few funding recipients being enrolled in the Pan-African University earlier this year.
Read more at 10,000 Women Initiative.
3. Triple Bottom Line Accounting
The idea is triple bottom line accounting, or 3BL, which describes business accounting that incorporates environmental and social performance into the bottom line of the business.
It’s interesting because it seeks to expand the notion of performance for businesses to include things that often cannot be valued purely in monetary terms. By incorporating these elements, the measurement of business performance will, so the theory goes, become more environmentally and socially responsible as success in these areas will be considered business successes.
A strong argument against 3BL is that the fundamental structure of companies is geared toward making money and reducing costs. It appears somewhat artificial to expect a company to expand its definition of success to include things that cannot be measured in monetary terms.
Perhaps this criticism of 3BL might bolster support for instituting taxes on
environmentally and even socially destructive behaviour.
They tried it in Western Australian where the State Government has included it as part of their State Sustainability Strategy.
Read more at environment.gov.au.
4. Socially Responsible Investment
The idea is socially responsible investing, which essentially means adopting an investment strategy that factors in the social and environmental credentials of the companies.
It’s interesting because it represents a shift in how investors might value a company – over and above its financial success. The aim is to place greater emphasis on socially and environmentally sustainable practices in business thereby altering the market.
More broadly, trends in socially responsible investment reflect a growing realisation that while business activities can impact negatively on society they are in the end vitally important to our overall wellbeing. Reconfiguring the market to reward businesses that are social responsible acknowledges that business success and societies success are in fact intertwined.
They tried it all over the place. There are a number of companies providing investment advice for socially responsible investors.
Read more at Wikipedia – once again an excellent starting point.
5. Legislating Corporate Conduct
The idea is creating laws that would regulate corporate conduct overseas.
The aim is to apply laws of a developed country extra-territorially (a well
recognised legal concept) to cover the operations of multinationals to include such things as workers rights, human rights and environmental standards.
It’s interesting because it attempts to reduce multinationals shopping around for countries with low standards, which often mean lower costs. This type of behaviour by multinationals can lead to what has been described as the "race to the bottom" whereby developing countries
decrease their regulation in vital areas to attract foreign direct investment.
It is arguable that such laws are essentially protectionist in that they protect domestic workers from losing their jobs to low cost operations overseas. So it might just be economic selfishness disguised as altruism. However one can point to the notion that increased corporate accountability is a good thing. Perhaps directly applying laws to operations overseas is a blunt way of achieving this but have a goal to improve the way multinationals do business is laudable.
They tried it in Australia in 2000 and in the US in 2006.