the rise of consumer education and activism, global social consciousness has become a hot topic of discussion, with business leaders jumping at the chance to exert themselves as champions of the people, and promote their businesses as “green” or “socially responsible.” And in the wake of a continually evolving set of ethical business guidelines comes the redefinition of the very concept of business. No longer is the “shareholder value prospect,” that is, maximum profit, the only player in the game, but its rival, CSR, a largely stakeholder and consumer concern, has emerged as the new MVP, or Most Valuable Priority. This reshuffle of priorities reflects the ability of globally responsible and creative business leaders to remain profitable while expending company resources toward the betterment of society, the transparency of business, and the protection of the environment.
Stakeholders—customers, employees of all ranks, suppliers, partners, affiliated institutes and governments, shareholders, and “owners”—represent the most fertile and diverse source of easily procured information available to a business or an organization. It should, therefore, come as no surprise that stakeholder engagement and dialogue is crucial for the profitability and continued existence of a company, as stakeholder opinions can be utilized to guide its vision and mission, and reflect on its performance. To simultaneously realize the potential of stakeholder groups, and to retain their valuable insights, a company must be willing to engage stakeholders in frequent dialogue, weigh their opinions, and allow them to participate in various decision-making processes. If this is not done, the company runs the risk of losing stakeholder capital—whether this is monetary, intellectual, or labor capital—which could prove potentially catastrophic to the life of the company in the long term.
Follow-up and feedback with stakeholders provide a cycle of opportunity for the growth and improvement of a company. Diverse stakeholder groups, when engaged in frequent dialog, can steer a company in a profitable and productive direction through the provision of perspectives on a variety of issues, from within a range of industries, geographic locals, demographic groups, and cultural backgrounds. For efficient and effective stakeholder dialog to be established, constant, clarifying communication between parties is essential, such as the identification of common goals among stakeholder groups and the company, as is the engagement and participation of stakeholders in relevant fora. Building relationships that transcend traditional business boundaries is a proven way to involve stakeholders in the mission of the company on a personal and emotional level, and evokes a genuine desire to learn from partnerships.
CSR MEASURING AND REPORTING
In addition to CSR, another term being used by business community is Environmental, Social and Corporate Governance (ESG). This refers to the three main areas of concern that have developed as the central factors in measuring the sustainability and ethical impact of an investment in a company or business. Whether a company is concerned about CSR or ESG, how does it know whether it is meeting its goals and objectives? And how does the investment community know which companies are achieving the CSR and ESG objectives?
The best way to really understand if your organization is meeting any goals and objectives is to take appropriate measurements of the key performance indicators (KPIs). But it is important to measure both the environmental/social indicators and the financial indicators because a balanced scorecard is important. In other words, the balanced scorecard consists of financial and non-financial indicators.
Another approach at obtaining this balance is to consider the environmental, social, and economic aspects of the company, or the triple bottom line (TBL) as coined by John Elkington [5]. It is also known as P3 or planet, people and profit, or E3 for earth, equity, and economy. This is often shown as a triangle (Fig. 2.1) depicting a three-legged chair as all three legs are necessary. A more realistic depiction can be seen in Figure 2.2 that shows the planet and environment as a large circle. Within the environment, in a smaller circle, are the people that depend on the environment. And what is dependent on the environment and society is the economy. But there needs to be a measurement to understand achieving the TBL. The Global Reporting Initiative (GRI), developed in 1997, is the internationally accepted standard for TBL reporting. The GRI was created to bring consistency to the TBL reporting process by enhancing the quality, thoroughness, and value of sustainability reporting.
FIGURE 2.1 Triple bottom line.
FIGURE 2.2 Realistic triple bottom line.
Chapters 18–24 in Part 3 will provide readers with various measuring standards as well as reporting standards. The benefits to the organization will also be outlined.
THE SUSTAINABLE DEVELOPMENT CONCEPT THOUSANDS YEARS AGO
Although the term CSR is used today, concepts analogous to social responsibility have existed for centuries. The idea that those in an advantageous position, either in terms of money or power, should conduct in a socially responsible way can be traced back to classical Athens of 500 BC.
This view supports that from the early days of civilization it was understood, in some cases by the state or in others by wealthy individuals of the time, that it would only be fairer for the rest of society if such individuals shared a portion of their amassed wealth with their fellow citizens. This reality came into being from the realization of the fact that has it not been for the rest of society, wealth making would probably be an impossibility. Thus, bearing this realization in mind, certain laws were voted by the state which at the time reflected precisely and directly the opinion of the people. Namely, these were the liturgies, “a wide range of public service paid for out of the pockets of the people owning substantial property” [6]. There were two different kinds of liturgies, the regular liturgies which had a religious character and the extraordinary liturgies which had a military character.
Aristotle's “magnificent man,” who bestows collective benefits upon his community out of his own wealth, is depicting the exact definition of “euergetism” in ancient Greece. The nobles, who because of their birth and wealth controlled access to all essential services, were expected to provide various services to their cities in exchange for the public bestowal of honor from the inhabitants. In the Art of Rhetoric, Aristotle states that true wealth consists in doing good; that is, in monetary handouts, giving of scarce and costly gifts, and helping others to maintain an existence [7].
A last notion connecting CSR and ancient Greece is that of heroism. Nowadays, the term “hero” has many different meanings. It addresses to people whose work is extremely risky like firemen, or to people whose work is challenging like teachers. “Hero” originates from the Greek word hêrôs. Although in ancient Greece this word was referring only to warriors, later on it was introduced for the people who have offered in favor to the local community but they are now dead. In order for someone to obtain the heroic status, he should deal with local sponsorship. There were no exact rules that someone had to follow in order to attain a heroic status. Someone who was involved in the matters of public interest and his goal was the
