1.) During the last few decades, promoting corporate sustainability has become a major concern for policymakers, practitioners, investors, and researchers.
Corporate sustainability (CS) here connotes the ability of firms to meet the needs of their direct and indirect stakeholders without compromising the ability to meet the needs of future stakeholders as well.
In at least 250 words, discuss the concept of sustainability in a business context and how an organization can incorporate it into their strategy to achieve long-term growth. Consider using the following keywords in your research: “corporate sustainability”, “ESG reporting”, “triple bottom line”, “stakeholder engagement”. You must cite at least three sources into your essay (NOT Wikipedia)
2.) Read Corporate Social Responsibility: Insight Using an ESG Rating and complete the following:
- Name one well known third-party ESG Report and Ratings Service Provider and give a brief overview of their rating methodology
- Name one of the most sustainable companies in the world as identified by the Corporate Knightsin 2021 and give a brief description of their CSR practices
- Name one thing organizations and the financial professionals they employ can do to maintain a sustainable, corporate, and ethical environment
CORPORATE RESPONSIBILITY
Corporate social responsibility (CSR) — despite its sometimes complex meaning — is a concept that has been around for decades. Many companies over
the years have paid significant attention to CSR and its associated issues. These issues range from corporate profitability and economic stability to corporate decision-making and behavior (ethical and moral) and often include ecological and environmental sustainability. CSR, as a result, is correlated with the environmental, social, and governance (ESG) aspects of an organization. Fortunately, many public and private companies are being evaluated on their ESG practices by various third-party providers, which gives practitioners and academics a proxy for a firm’s CSR performance. This study gives a brief overview of those
ratings, their scales, and their methodologies. In addition, this article identifies some of the CSR characteristics, practices, and policies exhibited by some of the most sustainable corporations in the world. There are many financial implications
for firms that use CSR practices. Organizations can benefit from understanding
these implications, as it could serve as motivation to review their own CSR policies. Moreover, management accountants and internal auditors can learn from the financial practices of socially responsible organizations and develop appropriate strategies in their own financial management operations.
They can even go beyond their initial area of expertise and create more sustainable models in other areas of their organization. This study then concludes with recommendations for accounting and auditing practitioners interested in implementing and maintaining a sustainable — and ethical — corporate environment.
Prior studies Although socially responsible corporations have been around since the early 1930s, the inherent ambiguity of CSR makes defining it a complex task. Four general areas, according to Sheehy (2015), contribute to the complexity. 1 The first area is business, where it is questionable whether a particular organization’s policies and actions — and hence, the organization itself — can legitimately claim to be socially responsible. The second is the attempt at defining it, which often fails to address the core issue: identifying the nature of the phenomenon. The third area centers on political parties
CORPORATE SOCIAL RESPONSIBILITY: INSIGHT USING AN ESG RATING
JAMES W. SUNDAY
J A M E S W. S U N D AY, C M A , is an assistant professor of finance at King’s College in Wilkes-Bar re, Pennsylvania. He has over 10 years of experience in corporate accounting and finance.
E S G , r e f e r r i n g t o a c o m p a n y ’ s C S R – l i k e e n v i r o n m e n t a l , s o c i a l , a n d g o v e r n a n c e p r a c t i c e s , i s
b e c o m i n g a n i n c r e a s i n g l y p o p u l a r w a y f o r i n v e s t o r s t o e v a l u a t e c o m p a n i e s .
attempting to define CSR. According to Sheehy (2015), someone’s political philosophies ultimately influence them. In turn, this causes them to define and use CSR to advance particular political agendas for corporate and economic policy. Lastly, the fourth area arises from the struggle governments face in defining CSR to make it acceptable to businesses while still driving behavioral change.
Akin to political parties, governments often have their own agendas, which often conflict with those of academics and businesses. This dynamic only further complicates the definition of CSR. Although these issues muddle all that CSR entails, there have been attempts at providing a conceptual framework to guide businesses towards being more socially responsible.
Carroll (1979) developed his corporate social performance (CSP) conceptual model in the late 1970s in an explicit attempt at defining certain obligations any given business has to society. The first aspect of this model contained a four-part framework, which included the economic, legal, ethical, and discretionary responsibilities that society expected from businesses.
The second aspect of this model concerned the range of social issues (e.g., consumerism, environment, and discrimination) that management needed to address. And lastly, there was a social responsiveness continuum, where businesses needed to choose a response philosophy. According to Carroll (1979), this model could help managers conceptualize the key issues in social performance, systematize thinking about social issues, and improve planning and diagnosis in the social performance realm.
In the years following the development of the conceptual model, CSR’s definition expanded further with more empirical research. The concept eventually gave way to alternative theories and themes, such as stakeholder theory, business ethics theory, and corporate citizenship.
Many of these theories embraced the CSR mindset and, according to Carroll, were compatible with it. As the expansion of CSR grew throughout the 1990s, there was a survey done of 50 academic leaders to determine what topics management researchers thought were important social issues in the management field. Topics ranked highly included business ethics; international, social issues; CSP; business and government/public policy; and environmental issues.
Many years later, in an overt attempt at resolving the various definitional disputes of CSR, Dahlsrud, through a content analysis of existing definitions, developed the five dimensions of CSR: environmental, social, economic, stakeholder, and voluntariness.