What is Corporate Social Responsibility? - InnoTrain CSR

The project "InnoTrain CSR" is organized by GILDE GmbH and has been funded with support from the European Commission. This publication reflects the
views only of the author, and the Commission cannot be held responsible for any use which may be made of the information contained therein. 12/2010
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© Kellogg School of Management
The crucial element of the CSR definition from the European Commission is the
voluntariness of the concept. It highlights advantages and disadvantages for the
implementation of CSR: On the one hand, the principle of voluntariness emphasises
that CSR is supposed to go beyond the statutory provisions. Thus, CSR is supposed
to make an additional social and economical profit possible. In addition, it is
preferable if companies can decide by themselves what can socially and
economically be improved aside from complying with the statutory provisions. This
allows companies to focus CSR closely on their main line of business and to develop
an individual strategy. However, on the other hand CSR may be criticised as an
empty phrase or "Greenwashing" of public relations because of the lack of a legally
binding character for the implementation of CSR due to its voluntary character.
As an additional characteristic of the EU definition, CSR integrated into corporate
activities is not so much focusing on the extent the generated profit is used for
socially or ecologically relevant purposes. In fact, integrated CSR means that all
processes capable of generating a profit are socially and ecologically sustainable.
Consequently, CSR should refer to the entire life cycle of products and services (e.g.
product development, value added chain, life span and recycling). The following
statement by Kellie McElhaney, director of the Centre for Responsible Business at
the University of California, brings it to the point: "CSR is not about how you spend
the money you make. It's about how you make the money you spend."
Moreover, a credible and sustainable CSR concept covers all functions within the
company. In order to have the path for achieving this understood less as cost-related
expenses but rather as an investment into an improvement process, comparable for
example to investments into quality management, the stakeholders (so-called
interested parties in the company) play a key role: In the process of the CSR
strategy, a systematically managed stakeholder dialogue activates all groups and
stakeholders who (potentially) have a real impact on the latitude of a company.
InnoTrain CSR
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