12° Nicosia,
21 May, 2024

Corporate Social Responsibility and Corporates’ response to COVID19

K. Treppides & Co Ltd: Corporate Social Responsibility (CSR) and Corporates’ response to COVID19

K. Treppides & Co Ltd: Corporate Social Responsibility (CSR) and Corporates’ response to COVID19

Costas Loizou
K. Treppides & Co Ltd

The long-term debate over CSR is concerned with whose interests should be attended to, shareholders or stakeholders. This is actually the debate of the two competing theories, i.e. shareholder theory and stakeholder theory over the purpose of modern business firm. Each theory provides a framework for economic and social performance of business.

Shareholder theory emanates from an economic perspective, focusing on the firm’s purpose of creating wealth for its owners while minimizing the importance of the firm’s interaction with its other constituencies as well as its role in society; By contrast, stakeholder theory broadens the shareholder’s perspective, recognizing the importance of wealth creation as well as the firm’s relationships with its multiple constituent groups - shareholders, employees, customers, suppliers, local communities, and environment - and impact on society at large.

Although responsible companies had already existed for more than a century before, the term Corporate Social Responsibility was officially coined in 1953 by American economist Howard Bowen in his publication Social Responsibilities of the Businessman.

CSR today

A lot has changed since the inception of then CSR ideology and like many things, that gain momentum and attention, it has evolved into a conceptualized global idea and practice.

Moreover, with the development of environmental concerns in addition to economic and social issues in the second half of the 20th century, corporate (social) responsibility became a growing issue. More and more consumers started becoming critical of companies and wanted them to be more respectful of the laws, the environment, and more responsible in general.

Today, CSR encompasses all the practices put in place by companies in order to uphold the principles of sustainable development. And what does it mean to be a sustainable or responsible organization? It means that companies need to be economically viable, have a positive impact on society, and respect and preserve the environment.

Beyond that, enterprises should have a process in place to integrate social, environmental, ethical human rights and consumer concerns into their business operations and core strategy in close cooperation with their stakeholders. The aim is:

  • to maximise the creation of shared value, which means to create returns on investment for the company's shareholders at the same time as ensuring benefits for the company's other stakeholders;
  • to identify, prevent and mitigate possible adverse impacts which enterprises may have on society.

Merging Corporate Social Responsibility with Your Company’s Strategy

It’s proven that CSR can have a measurable impact on a Company’s bottom line, but implementing a successful program that aligns with the company’s strategy is no easy task.

Careful analysis of the Company’s goals is required with then linking these goals to the CSR efforts. To make CSR a part of the strategy, it’s important to understand your company and its stakeholder’s goals.

The long-term goals of the Company are the guiding star of a business and only by aligning with these goals can you merge CSR with strategy.

Important features of today’s definition of CSR are:

  • Recognition of the importance of core business strategy. This is consistent with the approach taken by leading enterprises for whom social responsibility and sustainability have become an integral part of the business model. It is expected that CSR is most likely to contribute to the long-term success of the enterprise when it is fully integrated into business strategy.
  • Development of the concept of “creating shared value”. This refers to the way in which enterprises seek to generate a return on investment for their owners and shareholders by means of creating value for other stakeholders and society at large. This links CSR strongly to innovation, especially in terms of developing new products and services that are commercially successful and help to address societal challenges.
  • Explicit recognition of Human rights and ethical considerations in addition to social, environmental and consumer considerations.

Corporate social responsibility concerns actions by companies over and above their legal obligations towards society and the environment.

Certain regulatory measures create an environment more conducive to enterprises voluntarily meeting their social responsibility.

Why is corporate social responsibility important today?
A strategic approach to CSR is increasingly important to a company's competitiveness. It can bring benefits in terms of risk management, cost savings, access to capital, customer relationships, human resource management, and innovation capacity. It also encourages more social and environmental responsibility from the corporate sector at a time when the crisis has damaged consumer confidence and the levels of trust in business.

  • Through CSR, enterprises can significantly contribute to the European Union’s treaty objectives of sustainable development and a highly competitive social market economy. CSR underpins the objectives of the Europe 2020 strategy for smart, sustainable and inclusive growth, including the 75% employment target. Responsible business conduct is especially important when private sector operators provide public services.
  • CSR requires engagement with internal and external stakeholders so it enables enterprises to anticipate better and take advantage of fast-changing expectations in society as well as operating conditions. This means it can also act as a driver for the development of new markets and create real opportunities for growth.
  • By addressing their social responsibility, enterprises can build long-term employee, consumer and citizen trust as a basis for sustainable business models. This in turn helps to create an environment in which enterprises can innovate and grow. The economic crisis and its social consequences have to some extent damaged levels of trust in business, and have focused public attention on the social and ethical performance of enterprises, including on issues such as bonuses and executive pay.
  • Helping to mitigate the social effects of the crisis, including job losses, is part of the social responsibility of enterprises. In the longer term, CSR offers a set of values on which to build a more cohesive society and on which to base the transition to a sustainable economic system.

CSR and Covid 19

Historically, corporations took a step back during crises. However, as the role of business in society continues to evolve and stakeholder capitalism becomes mainstream, businesses are rising to the challenge. It’s encouraging to see how, even in the midst of these challenging times, corporate social innovation is responding amidst the difficulties and financial strain the pandemic is bringing.

As the world is engulfed with a virus that is disrupting lives, livelihoods, communities and putting tremendous amounts of pressure on the world economy as a whole, Corporate Social Responsibility now has its role to play and it is a major one.

First and foremost, the main priority is to protect the health of the employees, customers and shareholders, while also contributing to the protection of their societies. 

The world’s biggest players in hygiene and the pharmaceutical industry are donating millions in Personal Protective Equipment to hospitals for the heroic efforts being undertaken by doctors and nurses.

Organizations around the world are coming together and finding innovative ways to minimize the impact on public health and to limit disruptions to economies and supply chains.

It is worth noting that many proactive companies, even before the recommendations made by their governments, have encouraged their employees to work from home. A lot of Companies have invested in more technology and have made bold efforts to create a work from home environment.

Many Companies have made available to all staff the hygiene guidelines necessary, to stop the spread of COVID-19.  Simultaneously, in order to contain the coronavirus outbreak, many Companies has also severely limited travel and face-to-face meetings. A lot of meetings are being conducted using modern enterprise video communications and file exchange platforms.

Some Companies have been forced to close down entirely by way of government decrees and it therefore important that the remaining Companies that are left in operation follow government and WHO guidance to ensure the pandemic is mitigated enough so that all Companies can go back to operating before it’s too late.

K. Treppides & Co Ltd is the largest independent consulting company in Cyprus with an established international presence and offices in Great Britain and Malta. Today the company employs approximately 200 professionals. It offers a full range of consulting, tax, accounting services to groups, companies and investors operating internationally in a variety of financial and business sectors. The Company, which started its operations in 1985, has 35 years of expertise and an elite team of experienced executives who can guide and assist investors and businesses during the establishment process and subsequent investment activity in Cyprus and internationally.

Contact Details:

Nicosia: Treppides Tower, Kafkasou 9, Aglantzia, CY 2112, Nicosia, Cyprus
Limassol: Andrea Kariolou 38, Ayios Athanasios, CY 4102, Limassol Cyprus
London: 7 Milner Street, London SW3 2QA
Malta: Level 1, Somnium, Tower Road, Swatar, Birkirkara BKR 4012

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