AES

Corporate Social Responsibility (CSR) Risk and Solutions

 

Corporate social responsibility (CSR) can be defined as managing business risks from damaging social, environmental and governance impacts deletion by innovative strategy and capturing opportunities.

CSR agendas look at the impact of business operations from the view of both the shareholders and society. CSR is no longer about community projects and charitable donations. It is widely accepted that businesses contribution to sustainable development is an essential feature of business strategy and sustainable performance. CSR is no longer about community projects and charitable donations. It is widely accepted that businesses contribution to sustainable developement is an essential feature of business strategy and sustainable performance. CSR tracks the whole project life-cycle, from policies, operations, resource use, emissions, supply chains, sales, product safety, packaging and waste management.

Markets are increasingly taking a stronger interest in governance and CSR risks. Investors, capital providers and contracting companies now include governance and CSR risk analysis in lending and contracting decisions.

Responsible and transparent corporate behavior brings clear benefits in terms of reputation, perceived brand value, the gaining of stakeholder trust, and attracting investment.

CSR is promoted worldwide by many stakeholders including civil society groups, governments, investors, shareholders and businesses.

Today's heightened interest in the role of business and globalisation in society is tied to increased consumer awareness, available information and media of environmental and ethical issues. The affect has seen an increase in environmental and governance regulatory controls in numerous regions.

Similarly, the speed of implementation of recommended materials and technologies is expected to have an increased affect on a company's competitiveness. The marketplace is starting to dictate types of packaging, fuel efficiency, and waste solutions, leading to the opportunity to use green options. An inability or unwillingness to adopt viable and cost-effective alternatives may lead to a less competitive position in bidding for supply and service contracts.

Environmental management systems (EMS) are now mandatory in most nations worldwide. EMS helps clients manage their environmental risks and legal compliance in a structured approach. Issues of air quality, climate change, energy efficiency, toxicity, recyclabilty and biodiversity have become more important worldwide. As regulatory frameworks in the US, Europe, and Asia become stricter to reflect these; it is likely that African markets will also come under increasing regulatory controls.

Similarly, social and community management systems are being requested. A company has a duty to initiate engagement with the wider community regarding its operational activities and external impacts and risks on community health from company operations. Successfully engaging with stakeholders on these issues will impact positively on both a company's tangible and intangible value.

There is increasing regulatory pressure to manage corporate governance and prudent financial management. A business operations could potentially be exposed to risks of bribery and corruption. The direct or indirect exposure of bribery or corruption will tarnish a company's reputation, and large scale, high level corruption will lead to criminal charges or legal action from regulators.