Corporate social responsibility (CSR) is a concept describing corporate activities beyond profit-making; the term is increasingly used to describe the role of business in society. CSR involves a broad commitment by companies to social welfare and the common good and to the policies that support them. It involves not just the products that a company manufactures but also being a good corporate citizen in terms of the employees that it hires and the way it looks after them. It is also about protecting the environment and getting involved in the local community and the wider culture in which the company engages in business.
Broadly speaking, CSR has three key components:
- the basic values, ethics, policies, and practices of a company’s business;
- the voluntary contributions made by a company to community development;
- the management of environmental and social issues within the value chain by the company and its business partners—from the acquisition and production of raw materials, through the welfare of staff, to product sale, use, and disposal.
Corporate social responsibility and the beverage alcohol industry
The issue of corporate social responsibility is a complex one for any industry, not the least so for the beverage alcohol industry. ICAP’s sponsors believe that a systematic integration of CSR into their business practices can make a positive impact on their economic, social, and environmental performance. Furthermore, through their association with organizations such as ICAP, their CSR activities contribute to a wider development of alcohol policies, promote responsible drinking patterns, and target alcohol misuse.
As businesses, beverage alcohol companies must be accountable to their shareholders who, among other legitimate objectives, seek a financial return on their investment. Companies recognize that they are also accountable to a wider range of stakeholders, including consumers, employees, communities, media, and critics. In short, stakeholders are those individuals and groups with an interest in or affected by a company’s products, operations, or the nature of its business.
The idea that the measure of the overall performance of a company should be based on its combined contribution to economic prosperity, environmental quality, and social wellbeing has come to be called “the triple bottom line.” Companies, therefore, are deemed to be accountable for their actions, not just formally to their owners but also in less well-defined ways to this much wider group of stakeholders. This view has become central to the management of social and community issues. Businesses need to act honestly and ethically with regard to their internal management and auditing, but corporate social responsibility also requires them to focus on their wider responsibilities.
The beverage alcohol industry acknowledges that, although their products can offer considerable personal pleasure and social benefit, they can also cause serious personal and social harm if consumed irresponsibly. They also acknowledge that preventing misuse of their products is in their long-term strategic interest and is therefore consistent with their economic objectives, while turning a blind eye on misuse is ultimately bad for business. They recognize that long-term growth is best built on an ethical and responsible foundation. Their social concern is also founded on the realization that the misuse of alcohol can affect their business adversely. Appropriately, the industry has initiated many programs to target alcohol misuse and related harm, to encourage responsible drinking, and to educate consumers. Many of these initiatives have been developed by the industry in partnership with others (see the Examples of Targeted Interventions in the ICAP Blue Book: Practical Guides for Alcohol Policy and Prevention Approaches).
ICAP believes that promoting broad industry participation in CSR will advance responsible patterns of drinking, further understanding about the role of alcohol in society, and enhance long-term economic value through collective action.
United Nations Global Compact
CSR is viewed by ICAP as more than just reaching compliance with codes or marketing practices. Rather, it is a core part of business. ICAP and several of its sponsoring companies participate in the United Nations Global Compact, the multi-stakeholder initiative designed to encourage responsible business practices, launched in 2000 by United Nations Secretary-General. The Global Compact's principles are based on fundamental human, labor, and environmental rights and are upheld and emphasized by corporate social responsibility. In June 2004, the Global Compact ratified a tenth principle on corruption. ICAP has actively promoted the principles of the Global Compact through its many worldwide activities.
The idea of governments embracing partnership with the private sector is a new one in many places and is still resisted by many in the public sector who remain suspicious of the motives of corporations. Through the power of collective action, the Global Compact seeks to advance responsible corporate citizenship so that business can be part of the solution to the challenges of economic and social development. In this way, the private sector, in partnership with other social actors, can help realize the Secretary-General’s vision of a more sustainable and inclusive global economy.
CSR and partnership
Virtually all significant activities involving CSR require industry collaboration and partnership with others—particularly in the public sector. Hence partnership has come to be seen as a necessary condition with the various partners having different roles.
The potential partners for the beverage alcohol industry are not much different from those for other industries and include governments, the intergovernmental organizations such as the Untied Nations, nongovernmental voluntary and advocacy organizations, and the public health and research communities (see also: Building Partnerships).
CSR and alcohol: The need and potential for partnership
In October 2002 in Dublin, ICAP held an international conference on Alcohol, Ethics and Society. Published in 2005, Corporate Social Responsibility and Alcohol: The Need and Potential for Partnership, the eighth volume in the ICAP Book Series on Alcohol in Society, built on the presentations made in Dublin. This volume advanced the debate on the rights and responsibilities of those involved in developing alcohol policies by exploring the relationship between alcohol, ethics, and CSR. Furthermore, it examined the case for the beverage alcohol industry to recognize a significant need and potential for corporate social responsibility in the industry.
CSR and emerging markets: A Suggested Framework for Responsibility
In 1998, Taylor and Francis published Alcohol and Emerging Markets: Patterns, Problems and Responses, the second volume in the ICAP Book Series on Alcohol in Society. The book presented the most current research on alcohol in developing countries and emerging markets. It included a chapter proposing A Framework for Responsibility, which identified the challenges and opportunities confronting the sponsor companies of ICAP. The Framework is a list of activities that the ICAP Board sponsors pledged to undertake in developing countries in an effort to demonstrate how seriously they take the issue of corporate responsibility wherever they are active in the world. The level of activity for a given company would be dependent upon the size of its corporate or collective presence in a country.
Furthermore, the Framework stated that ICAP sponsors “…are committed … to revisiting this research, with a view to reporting on how the issues have changed and how the role of the industry has evolved, five years from now.” A separate report on the Framework was included in the 2005 volume Corporate Social Responsibility and Alcohol: The Need and Potential for Partnership. The progress achieved to date should be seen as a beginning, since ICAP sponsors remain committed to expanding their social responsibility efforts in markets where they are active.
The beverage alcohol industry’s social responsibility activities can best be described in two parts. First, there are activities that pertain to alcohol itself. Beverage alcohol, when consumed responsibly, can be part of a balanced, healthy lifestyle; but, when consumed inappropriately, it has the potential for serious harm. This has led members of the beverage alcohol industry, especially within the past decade, to form separate organizations—social aspects organizations (SAOs)—whose sole function is to promote responsible drinking.
Over the years, industry members have funded innovative campaigns, especially to deter alcohol-impaired driving and underage drinking. They have also supported peer-reviewed alcohol research that increases the understanding of alcohol’s positive and negative consequences. The impact of such initiatives has been sustained over time. In the past 12 years, significant decreases in alcohol-impaired driving fatalities are evident in Australasia, Europe, and the United States. Although other factors beyond industry initiatives are clearly significant in helping to reduce drink-driving problems, the industry’s contribution is noteworthy and significant. Major alcohol producers have effective company advertising codes and support self-regulatory and independent mechanisms to attempt to ensure that advertising is directed to the target market—the consumer of legal drinking age—and that it does not appear to condone inappropriate drinking behavior.
The second part of the industry’s corporate responsibility activities relates to the bigger picture. The beverage alcohol industry recognizes that good corporate citizenship is more than ensuring that its products are used safely and responsibly. It also entails balancing the needs of its employees for a safe and rewarding job, improving the environment in which they work, and positively engaging the wider culture in which they operate, with the needs of shareholders for a fair return on investment.
In practice, this means that most major alcohol producers comply with or exceed government requirements and international norms governing the environmental impact of products through improvements in water use, packaging, emission of greenhouse gases and hazardous substances, energy use, solid waste management, and transport. High standards are set regarding their business conduct and that of their partners, and they support a host of cultural and educational activities in the communities where they operate.
CSR efforts by the beverage alcohol industry are supported in mature and emerging markets, at the local, national and international levels, and in partnership with a variety of stakeholders from the public and private sectors. By investing in CSR, companies are investing in sustainability and broader economic, social, and environmental goals. CSR remains a beaming light of success for improving the role of business in society—but is also an ongoing challenge to which companies must remain vigilant, especially in emerging markets.