Chapter 5Corporate SocialResponsibility at Retailing

James B.A Mary A.O

Learning objectivesThis chapter describes Current CSR

reportingCSR link to strategy.Private companies and social issuesIt then describes a framework for focusing

CSR on issues of strategic importance to the retailer and its supply chain trading partners.

Finally, a case, that of Boots, Ltd. in the United Kingdom, will describe one approach to setting priorities and reporting progress using the GRI G3 guidelines.

CSR at RetailersThe trend toward increased CSR reporting is

perhaps most apparent in the space dedicated to the topic in the annual reports of publicly traded retailers.

Example of CSR Wal-Mart 2006 Annual Report

“In October 2005, Wal-Mart CEO, Lee Scott …..leadership role in improving operations, our operations, and products for our customer that will benefit the environment.”

“Did you know that in the U.S. retail channel, we are the first to make available RoHS (Retail on Hazardous Substance) compliant products?”

Gap, Inc. 2005 Annual Report “Gap, Inc. employees volunteered nearly 155,000

hours last year to benefit charitable causes.”

These represents the scope of CSR initiative reporting retailers might embrace. The range of “good works” by both companies is wide, covering charity contributions by employees, work with suppliers, enforcement of labor standards, and environmental hazard mitigation*.

CSR Link to StrategyAcademics and consultants recommend

making societal concerns integral to company plans for its processes and its products. The growing CSR movement requires substantive, formal processes for managing what will likely be multiple, simultaneous efforts at different levels of the organization. This section describes two frameworks for linking CSR with strategy provided by prominent management thought leaders.

Indicator CategoryEconomic (EC): Includes capital flows among stakeholders and

economic impacts of the organization throughout society; financial reports 9 performance indicators—7 core and 2

additional.Environmental (EN): Impact of the organization on ecosystems*,

land, air, and water 30 performance indicators—17 core and 13

additional

Social CategoriesLabor practices and decent work (LA)Human rights (HR)Product Responsibility (PR) Society (SO)

Private Companies and Social IssuesThere are three types of CSR responsibilities

in this environment: formal, informal, and frontier expectations.

FormalThe formal contract includes regulation,

taxes, contract structures, and product liability.

Informal:The informal contract lies in expectations,

not laws or regulations. An example is the responsibility to maintain labor standards in global supply chains.

Frontier expectationsFrontier expectations have less direct

threads to the enterprise. An example is the responsibility of food

manufacturers for obesity. If people eat too much or the food is “over-caloric,” where does the responsibility lie—with the restaurant or the consumer?

Boots ltd.—CSR/Financial Report ConvergenceIn early 2006, Boots, a company in the United

Kingdom that dates back to the 19th century, reported in some detail about its CSR efforts. This was not Boots’ first report, but it was a one that clearly explained its efforts in terms of GRI G3 guidelines.

By way of background, a merger in 2006 resulted in a company with 3,000 retail outlets in 17 countries. Boots also supports 125,000 retail customers with its wholesale and distribution business. Many of these are independent pharmacists. Products include bath and body, skincare, cosmetics, and haircare categories.

GRI G3 - GUIDLINESGlobal Reporting Initiative The G3 Guidelines are made up of two

parts. Part 1 - Reporting Principles and Guidance features guidance on how to report. Part 2 - Standard Disclosures features guidance on what should be reported, in the form of Disclosures on Management Approach and Performance Indicators.

Thank You