There is growing recognition of the significant effect the activities of the private sector have—on employees, customers, communities, the environment, competitors, business partners, investors, shareholders, governments and others. It is also becoming increasingly clear that firms can contribute to their own wealth and to overall societal wealth by considering the effect they have on the world at large when making decisions.

 Business opinion polls and corporate behaviour both show increased levels of understanding of the link between responsible business and good business. Also, investors and financial markets are beginning to see that CSR activities that integrate broader societal concerns into business strategy and performance are evidence of good management. In addition to building trust with the community and giving firms an edge in attracting good customers and employees, acting responsibly towards workers and others in society can help build value for firms and their shareholders.

It must be recognized up front that CSR still creates a degree of confusion and controversy. Is the promotion and implementation of socially and environmentally preferable corporate conduct a function of business or government? Is the implementation of CSR practices a cost or a value-enhancer? Is it just public relations? In part, the problem stems from definitional issues, and a perception in some quarters that CSR is more about philanthropy, rather than “doing business” and responding to shareholder interests. The central thesis of this guide is that CSR is an integral part of the new business model.

Properly understood, CSR should be seen as the way that firms—working with those most affected by their decisions (often called “stakeholders”)—can develop innovative and economically viable products, processes and services within core business processes, resulting in improved environmental protection and social conditions. This approach manifests itself in many forms, including high profile statements made by many corporate CEOs. Launching General Electric’s “Ecomagination” vision of “a cleaner, healthier world,” Chief Executive Jeffrey Immelt underlined the company’s commitment to find the “big answers for the big questions”—climate change, health, water—and to develop solutions, working in partnership with governments and civil society; in other words, aligning core business strategy with the changing social and environmental context.

Businesses are an integral part of the communities in which they operate. Good executives know that their long-term success is based on continued good relations with a wide range of individuals, groups and institutions. Smart firms know that business can’t succeed in societies that are failing—whether this is due to social or environmental challenges, or governance problems. Moreover, the general public has high expectations of the private sector in terms of responsible behaviour. Consumers expect goods and services to reflect socially and environmentally responsible business behaviour at competitive prices. Shareholders also are searching for enhanced financial performance that integrates social and environmental considerations, both in terms of risk and opportunities.

Governments, too, are becoming aware of the national competitive advantages to be won from a responsible business sector. At the same time, leading industry associations, such as the World Business Council for Sustainable Development, have also suggested that countries as well as companies might gain a competitive advantage from corporate social responsibility. In much of the developing world, governments and business understand that their respective competitive positions, and access to capital, increasingly depends on being seen to respect the highest global standards.

Even companies which may have a good reputation can risk losing their hard-earned name when they fail to put systematic approaches in place to ensure continued positive performance. The effect of a tarnished reputation often extends far beyond that one firm: entire sectors and, indeed, nations can suffer. Hardly a month goes by without some example of a major corporation suffering a reduced market position as a result of questionable behaviour, with many others subsequently finding themselves to be a part of the collateral damage. These firms frequently expend considerable time and money attempting to regain their reputation, with mixed results.

So what can be done to increase the likelihood that firms can enhance their good reputation, and continue to demonstrate positive business, social and environmental performance?

On a practical level CSR approaches need to be constructed by adapting best practices, existing initiatives and analyses to local contexts and situations.

(http://www.iisd.org/pdf/2007/csr_guide.pdf)

Ex.9 Translate the following text from Russian into English