Ethics and CSR PDF

Introduction to Ethics and Coporate Social Resposibilty Prof. TC Sandanayake Ethics: The study of moral obligation involving the distinction between right and wrong. Business Ethics: principles and standards that determine acceptable conduct in business...

Introduction to Ethics and Coporate Social Resposibilty Prof. TC Sandanayake Ethics: The study of moral obligation involving the distinction between right and wrong. Business Ethics: principles and standards that determine acceptable conduct in business. Unethical and/or Illegal Accounting fraud Deceptive advertising Unfair competitive practices  Create good image and good press Why be ethical To act within the law Owners' requirements As a unique selling points To attract customers/employees/investors To be socially responsible Reasons for being unethical ⎯ Pressure ⎯ Fear ⎯ Greed ⎯ Convenience ⎯ Unawareness?? Ethics are with…. Customers Managers Trading Owners Partners Shareholders Pressure Community Groups Activists Workforce Myths regarding Business Ethics Business ethics is a new trend. Business ethics – religion vs. management. Business ethics is obvious – “do good!” Business ethics is good guys preaching to bad guys. Ethics can’t be managed. Being legal = being ethical. Managing ethics has little practical relevance.  Common Misconduct in Workplace  Common Ethical Issues face by Businesses Should firms use child labour? Is animal testing needed in products &ingredients? What wages should firms pay to poor countries? To what extent should firms seek to be environmentally friendly? Should firms get involved in certain activities? e.g making weapons Principles of Business Ethics Honesty Integrity Trustworthy and loyal Commitment Fairness Concern and respect about others Law abiding Types of Business Ethics Corporate Responsibility Economic responsibility Technical Morality Legal Responsibility Loyalty towards Organisation Personal responsibilities Official responsibilities Ethical Dilemmas Making decisions under stress or dealing with complex issues that have no clear indication of what is right or wrong. There are NO simple ethical dilemmas…all have layers of meaning and effect.  Ethical Tips for Organizations Develop a code of ethics. Communicate code and bake into culture top-down Treat ethics as a process. Create open lines of communication. Set good examples. Educate employees – frame issues through storytelling. Value forgiveness. Benefits of Managing Ethics in the Workplace Improves society. Maintains a moral course in unstable times. Cultivates employee teamwork, productivity, morale and development. Acts as an insurance policy. Establishes values for quality management, strategic planning and diversity management. Promotes strong public image. It is the RIGHT thing to do! A Man without ethics is a wild beast loosed upon this world Albert Camus French nobel price winning author  Corporate Social Responsibility Social responsibility– business’s obligation to maximize its positive impact and minimize its negative impact on society 2-17 Social responsibility refers to an individual or corporate accountability to fulfill their civic duty and take actions that will benefit society. If a company or person considers taking actions that could harm the environment or society, those actions are considered socially irresponsible.  Business Stakeholders Corporate Responsibility? Corporate Social Responsibility (CSR) is the obligation of organization management to make decisions and take actions that will enhance the welfare and interests of society as well as the organization  Environmental responsibility is the belief that organizations should behave in as environmentally friendly a way as possible Ethical responsibility is concerned with ensuring an organization is operating in a fair and ethical manner. Types of CSR Philanthropic responsibility refers to a business’s aim to actively make the world and society a better place. Economic responsibility is the practice of a firm backing all of its financial decisions in its commitment to do good. Labour rights: child labour forced labour right to organise safety and health Environmental conditions water & air emissions Key Issues in the climate change Society Human rights cooperation with paramilitary forces complicity in extra-judicial killings Poverty Alleviation job creation public revenues skills and technology Bottom of Pyramid Concept Bottom of the pyramid (BOP)/Base of the pyramid Term used in economics that refers to the poorest two-thirds of the economic human pyramid, a group of more than four billion people living in abject (hopeless/miserable) poverty.  The Gini coefficient Gini Coefficient/ Gini index, is the most commonly used measure of inequality. Developed by Italian statistician Corrado Gini (1884–1965) used as a measure of income inequality, but it can be used to measure the inequality of any distribution (such as the distribution of wealth) It measures inequality on a scale from 0 to 1, where higher values indicate higher inequality. This can sometimes be shown as a percentage from 0 to 100%, called the “Gini Index”. A value of 0 indicates perfect equality: everyone has the same income. A value of 1 indicates perfect inequality, where one person receives all the income, and everyone else receives nothing. Gini Coefficients Highest and Lowest (2024) Senses and Statistics Dept Data , 2023 Low Coefficients High Coefficients Bottom of Pyramid Concept in CSR Corporate Citizenship Concepts Corporate social responsibility – emphasizes obligation and accountability to society Corporate Social… Emphasizes… Corporate social Responsibility Obligation, accountability responsiveness – emphasizes action, activity Responsiveness Action, Activity Corporate social performance – emphasizes Performance Outcomes, results outcomes, results Drivers of Corporate Citizenship Internal Motivators External Pressures Traditions and values Customers and consumers Expectations in the community Reputation and image Laws and political pressures Business strategy Recruiting and retaining employees 28 Benefits of Corporate Citizenship Improved employee relations Improved customer relationships Improved business performance Enhanced company’s marketing efforts 29 Examples of corporate social responsibility Reduce carbon footprints to mitigate climate change Improve labor policies and embrace fair trade Engage in charitable giving and volunteer efforts within your community Change corporate policies to benefit the environment Make socially and environmentally conscious investments Ex: Socially responsible for the environment Hold Hold an annual tree-planting event. Set up Set up recycling bins throughout your facilities Minimize Minimize your amount of paper waste Permit Permit remote work to reduce the negative impact of commuter traffic Switch Switch from incandescent light bulbs to energy-saving LED bulbs. Make Make socially and environmentally conscious investments  Great Ideas of coporate people Johnson & Johnson – The company continues to seek out renewable energy options with the goal of having 100% of its energy needs from renewable sources by 2025. Google - Data center using 50% less energy than others in the world. Committed over $1 billion to renewable energy projects Coca cola - delivery trucks contributed 3.7 million metric tons of greenhouse gases to the world. 25% reduction in their carbon by 2030 Ford Auto Mobile - Greenhouse gas emissions using their EcoBoost engine to increase fuel efficiency. Plans to introduce 40 electrified vehicles, in an investment of $11 billion. aim for their vehicles to be carbon neutral by 2050.  Great Ideas of coporate people (Cont.) Netflix& Spotify : Offer benefits to support their employees and families. Netflix offers 52 weeks of paid parental leave, which can be taken at any time Lego - invest $150 million over the next 15 years with a focus on addressing climate change and reducing waste. By 2030, the toymaker plans to use environmental friendly to produce all of its core products and packaging—and it’s already taken key steps to achieve that goal. Disney - committed to reducing their carbon footprint with goals for zero net greenhouse gas emissions, zero-waste, and a commitment to conserve water. TOMS - donation of over 60 million pairs of shoes to children in need. Discussion Is the following statement true or false? Provide your argument “Ethics has to do with whether my feelings are right or wrong.” Lesson Overview.. What are ethics Why ethics How to be ethical in business What if we don’t be ethical What is CSR Drivers of CSR How to start CSR in the business Importance of being ethical and responsible