From Bhutan to Foxconn, corporate responsibility is big business

From Bhutan to Foxconn, corporate responsibility is big business

A new company attempts to satiate the European appetite for hazelnuts with an all-encompassing bussiness model. Photo: Thatcher Cook for Mercy Corps
A new company attempts to satiate the European appetite for hazelnuts with an all-encompassing bussiness model. Photo: Thatcher Cook for Mercy Corps

The bottom line of any profit-making scheme is profit. Increasingly, consumers are demanding even more than that.

A new for-profit in the Southeast Asian nation of Bhutan is one of many new companies developing a more holistic approach to business. Mountain Hazelnut Venture’s goals are lofty: combat deforestation by planting 10 million hazelnut trees in the next five years, employ and empower 15,000 small holding farmer households with fair wages in rural Bhutan and supply the European hazelnut demand by exporting 40,000 metric tons of hazelnuts by the year 2020. Oh, yeah—and also turn a profit.

Mountain Hazelnut Venture is one of many emerging companies whose goals include the triple-bottom line of corporate social responsibility: people, planet and profits. The term corporate social responsibly, or CSR, has been around for decades, but the evidence that corporations are moving towards increased emphasis on CSR is mounting.

CSR is itself becoming big business. The Wall Street Journal releases a weekly “Corporate Social Responsibility Weekly Recap.” The title “CSR Specialist” is a nascent career choice. Many companies, like Nike, even release an annual corporate responsibility report, which they allow to be dissected by the public.

Of course, paying Bhutanese farmers to plant trees is only one way for companies, big or small, to be socially responsible. In 2007 the Center for Global Development released a report defining corporate responsibility as standards compliance, charitable giving, resource engagement, commercial leverage and policy advocacy. A recent article from International Development explains how each of them is defined in today’s corporate culture:

Standards compliance: Companies adhere to higher standards of business practice, including labor rights, working conditions, environmental protection or anti-corruption.

Charitable giving: Companies provide direct financial support to public organizations or nonprofits that work on issues reasonably aligned with the company’s interests and corporate culture. It is deemed the most straightforward way for a company to contribute to development efforts.

Resource engagement: Companies donate their own goods, services and expertise. According to CGDev, this approach “arguably provides greater leverage to development activities than cash because it brings to bear a company’s particular competitive advantages.”

Commercial leverage: Companies leverage their commercial presence to support efforts that can improve the lives of people they employ and communities where they operate.

Policy advocacy: Companies use their influence to lobby home and host governments and the international community for better policies.

While it is important to praise corporations that follow these standards, corporate social responsibility did not happen in a vacuum. Decades of public outcry, consumer habits and a growing sense of global awareness have played a part in the phenomenon.

This week, after months of public scrutiny, Foxconn Technology, a Chinese supplier of Apple computers, announced that it would be raising wages for assembly line workers by 16 to 25 percent.

As consumer awareness and activism grows, corporate responsibility is not only an important aspect of a successful business model, but also a key tool in global development and poverty alleviation.

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