A concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis.

Introduction

Corporate social responsibility (CSR) and corporate citizenship are broad issues involving corporate activities beyond profit-making, and the terms are being 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, or disposal.

CSR 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.  The sponsors of the ICAP believe that a systematic integration of CSR into their business practices can make a positive impact on their economic, social, 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 help to combat 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 capital 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 corporate citizenship and social responsibility 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 such 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 minimize the risks, to encourage moderate consumption patterns, and to educate consumers about alcohol use.  Many of these actions have been developed by the industry in partnership with others.

ICAP believes that promoting broad industry participation in CSR will advance responsible patterns of beverage alcohol consumption, further understanding about the role of alcohol in society as well as enhance long-term economic value through collective action.

UN 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 UN Global Compact , the multi-stakeholder initiative launched in 2000 by UN Secretary-General Kofi Annan which is designed to encourage responsible business practices.  The Global Compact's principles are based on fundamental human, labor, and environmental rights, and are upheld and emphasized by corporate citizenship and 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 in many places a new one 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 & Partnership

Virtually all significant activities involving CSR require collaboration and partnership with others, and particularly with the public sector.  Hence partnership has come to be seen as a necessary condition with the various partners having different roles.  These partners include governments, intergovernmental organizations such as the United Nations, the private sector, voluntary and advocacy organizations, and academic communities. 

The potential partners for the beverage alcohol industry are little different from those for other industries, and include governments, the intergovernmental organizations, the 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, the National College of Ireland (NCI) and ICAP held an international conference on “Alcohol, Ethics and Society .”  Corporate Social Responsibility and Alcohol: The Need and Potential for Partnership the eighth book in the ICAP Series on Alcohol in Society, builds on the presentations made in Dublin.  This volume advances 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 examines 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 book in the ICAP 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 would be dependent upon the size of their corporate or collective presence in a given country.

Furthermore, it 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 is included in the aforementioned upcoming volume CSR 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.

CSR Activities

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 has the potential for serious harm.  This has led leading 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 alcohol use. 

Over the years, industry members have funded innovative campaigns especially to deter drunk 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. Over the past 12 years, significant decreases in drink-driving fatalities are evident in Australasia, Europe, and the United States.  Major 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 legal drinking age consumer—and that it does not appear to condone inappropriate drinking behavior.  Although other factors beyond industry initiatives are clearly significant in helping to reduce drink-driving problems, the industry’s contribution is noteworthy and significant.

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 across the community.  It also entails balancing the needs of its employees for a safe and rewarding job, and improving the environments in which they work and the wider culture in which they engage in business, with the needs of shareholders for a fair return on their investment.

In practice, this means that most major alcohol producers comply with or exceed governmental requirements and international norms governing the environmental impact of their products through improvements in the use of water, packaging, greenhouse gases, energy, solid waste, air emissions, hazardous substances, and transport.  High standards are set regarding their business conduct and those of the partners with whom they work, and they support a host of cultural and educational activities in the communities where they operate.

Conclusions

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 both a beaming light of success for improving the role of business in society, but also an ongoing challenge to which companies must remain vigilant, especially in emerging markets.