Corporate Social Responsibility

Synopsis

Corporate Social Responsibility is being more and more important for companies to sustain in the market as CSR can improve long term profit. Companies are encouraging to make a positive impact on the society, environmental and stakeholders by performing CSR. The overall storyline discuss about the growth of corporate social responsibility and the CSR activities practices by the selected companies, Lego and Volkswagen. The story line also discuss the issues of CSR and the reason why these companies choose to commit to CSR activities as well as the responses of the key stakeholders. In the other hand, we discuss about these selected companies which had  highlighted CSR activities done but do the companies really perform it and discuss about the focus areas of Lego and Volkswagen in performing corporate social responsibility. Furthermore, this story line has discuss how these companies collaborated with other social community groups such as NGO in order to practice corporate social responsibility.

Introduction

Corporate Social Responsibility (CSR) is defined by a corporation’s accountability to take initiative and responsibility for the corporation’s actions that affect environmental and social wellbeing (Corporate Social Responsibility). This theory is based on the original term of “responsibility”, which means “to pledge back”, engaging to a commitment to return to society and the corporation’s stakeholders.  The CSR issue has become more common during the recent era, as people gained more knowledge on how corporations can have immensely damaging effects on the environment. For example, oil spilling, air pollutions and inappropriate method to dispose factory wastes. The facts that many large corporations have produced high profit from the decline of the global environment, hence, it is imperative for corporations to contribute their gains to recover and enhances society and the environment. Some corporations are merely using the existence of CSR as lip services (Dunn, 2018).  

Detailed Scripts – Corporate Social Responsibility issues(CSR)

1. A successful example - LEGO

As a toy manufacturer, LEGO has become the most corporate socially responsible company, ranked by Reputation Institute. Quoted from the chairman of RI, the reason for the success is due to the integration of CSR from top to bottom in the corporation. Its CSR strategies mainly focuses on three aspect, children, environment and people. He further stated having a well implemented CSR ensures customer retention and license being granted for conducting business (LEGO Group Leads Global Ranking of Best CSR Reputation, 2017). As the rank suggested, the company have excelled in conducting a fair and transparent business practices, protect environment and behaves ethically (Strauss, 2017).

LEGO’s core belief in protecting the children’s basic rights to play by engage with them in different ways. They have established LEGO foundation which its objective is to empower children’s lifelong learning. LEGO has also initiated several programs to allow children able to participate in learning by using its products in collaboration with museums “Build to Play” and many more. Lego had also partnered with UNICEF to protect children rights (Responsibility Report 2017, n.d.).

1. LEGO’s CSR strategies – Full commitment in preserving and reduce the impact it created to the Environment

As its products like interlocking bricks and other are made out of plastic, Lego therefore made its focuses in improving operational efficiency and sustainable production. In 2014, LEGO have partnered with World Wildlife Fund (WWF) in the Climate Savers Program to work together in reducing its carbon footprint (LEGO, n.d.).  Since then, the company has closely working with the largest conservation organization in gradually converting the balance of energy usage from non-renewable to renewable energy ( State of Green, 2017) by spending more then DKK 1 billion in offshore wind farms.  The recent acquisition of 25% stake in immense 258-megawatt offshore wind farm in 2017 has helped LEGO to achieve such challenging goal 3 years ahead of its scheduled timeline (Chow, 2017).

As a result, the energy efficiency has also improved by 12% in its effort to curb energy usage. Another visible commitment is its substantial investment in the R&D of discovering sustainable material. The outcome is which allowed LEGO to have its first plant-based plastic toy bricks ( State of Green, 2017). The result all of these achievements is astonishing as LEGO itself is only responsible takes 10% of the total carbon dioxide in the lifecycle of the LEGO bricks.

This collaboration is deemed successful as all of its targets set are either have achieved or exceeded the original goals. Subsequently, LEGO have renewed its partnership with WWF to 2020 and go further beyond by initiating an Engage to Reduce Program(E2R) ( State of Green, 2017). It collaborates with its suppliers in promoting global movement in combat man-made climate change and reduce the CO2 emission in its entire supply chain. This comes under the fact that 90% of the emissions are produced by its suppliers (edie newsroom, 2017). This program will cover 80% of LEGO’s suppliers together with LEGO in setting climate goals that will reduce the carbon emission. Other goals have also been set for the renewed partnership with WWF such as continuously engage with employees and others to combat climate change, maintaining the 100% renewable energy use in future, and reduce CO2 emissions by 10% per bricks compared to 2016.

The collaboration is a huge success, as represented by Marjorie Lao, the CFO of LEGO as it able to generate more ideas and finding ways from another perspective to develop a future fit business model (edie newsroom, 2017).

1. Issues of partnership with Shell – Dispute between Greenpiece and LEGO

However, Lego did involve some disputes such as its partnership with Shell by launching shell-branded toys to the market. As Lego’s brand image stands for reserving children’s rights to play and environment sustainable practices. What it stands for was clearly not aligned with Shell’s move in the planned development of coming oil drill in Arctic in the perspective of stakeholders. As a result, Greenpiece, an NGO initiated a campaign against Lego’s tie with Shell and it successfully raise the awareness of people by releasing a video and exerts more pressure to Lego (Vaughan, 2017). At the end, Lego agreed to end marketing contract with Shell to prevent further damage to its long built up brand and reputation (Vaughan, 2017).