1.2.2 Defining CSR

CSR refers to a wide array of issues and themes. Besides certain general themes that can be said to apply to all types of companies, such as respecting human rights, many sectors of industry have special concerns that need to be taken into account. For example, as a CSR strategy, the fishing industry has to make sure that fish stocks will not be depleted, whereas a grocery chain may well prioritise its employee diversity policy to create a direct connection with its customers and attract potential customers. As CSR is a subject of research in many disciplines, it is difficult to find one single and concrete definition. Moreover, various cultures set different priorities. In the Middle-East, creating jobs and providing education and training to youngsters is the highest priority,1 whereas CSR in Canada and Australia pays considerable attention to indigenous peoples' interests.2 Furthermore, ethical standards may differ per cultural environment. For example, 'ethical banking' or 'ethical investment' has a different meaning for a Dutch banker and a banker who follows the Sharia. For the two bankers, certain ethical principles may coincide such as the ambition not to invest in or finance companies that produce or trade in weapons or pornography. However, they will have different opinions on whether or not to make interest payments part of the loan agreement. Sharia provisions generally prohibit the charging of interest. Consequently, where a Dutch banker will not see any ethical problem in agreeing on interest, this aspect will be a key issue for the Sharia banker. CSR is also an evolving concept that is in a continuous process of being redefined.

The European Commission (Commission) has defined CSR as "a concept whereby companies decide voluntarily to contribute to a better society and a cleaner environment"3 and as "a concept whereby companies integrate social and environmental concerns into their business operations and in their interaction with their stakeholders on a voluntary basis".4 CSR has also been described as business' contribution to sustainable development, i.e. meeting the needs of today without compromising the needs of future generations'.5 The idea is that business has a duty to its wider community - beyond staying within the law and satisfying stakeholders.

The International Chamber of Commerce (ICC) prefers the terms responsible business conduct or voluntary corporate initiatives'. The ICC proposes the following definition of corporate responsibility from a business perspective: "the voluntary commitment by business to manage its activities in a responsible way".6 The World Business Council for Sustainable Development (WBCSD) states: "Corporate social responsibility is the continuing commitment by business to contribute to economic development while improving the quality of life of the workforce and their families as well as of the community and society at large".7

In 2006, an Indonesian law was adopted which prescribes that natural resource companies should practice CSR.8 Article 1 of this act defines CSR as follows: "The company's commitment to participate in sustainable economic development in order to improve the quality of life and beneficial environment, both for the company itself, the local community, and society in general".

The Dutch corporate governance code for listed companies (Frijns Code) refers to CSR ( 'maatschappelijk verantwoord ondernemen', i.e. socially responsible entrepreneurship), but does not define this term. Legal experts on CSR such as the British corporate law professor Charlotte Villiers and Ramon Mullerat, a practitioner and professor in Spain, indicate that they cannot provide a clear definition of CSR. They assert that the term has not yet settled'.9 The question can be posed whether basing research on one single definition will improve that research. Finding such a definition in itself probably constitutes a lengthy research project.

As a starting point for the research for this book, the concept of CSR as described by the Dutch Social Economic Council (SER, Sociaal-Economische Raad) was taken into account. In 2000, the Dutch Cabinet had requested the SER to report on the subject. The SER contended that CSR means balancing the interests of different stakeholders in order to realise a value increase in three dimensions: People, Planet, Profit.10 In this book, this concept of a simultaneous value augmentation both in an economic sense and with regard to people and planet concerns has also been referred to as the fusion of interests'.11