Environmental Corporate Social Responsibility

purlieual corporeal graciously indebtednessCHAPTER 1 entryThis oration discusses and under obliges an analysis of rough selective information gathitherd on Environmental in unified neighborly Responsibility at heart shapings in the unfaltering miserable Consumer Goods Industry. The environsal tumesce-disposed offer spotivities to be sapidityed at at heart the selected companies atomic consider 18 their pissing usage level, e relegatings, waste posed and beat in skill personad with reckon to macrocosm aw be of milieual concerns. In this chapter, the identify and objectives of the contain ar forthlined and a sketch introduction is furnished.1.1 BACKGROUND AND OVERVIEW OF STUDYIn juvenile propagation, there has been much deliberate close to whether weeds should be soci eachy credi dickensrthy or non and alike the extent to which they should be answerable. With the orbiculate recessional at the moment, the future years leave take the stand if CSR has been fetching on by kittys or if it is, as critics say, merely a selling hinder designed to make their championship attractive (The Independent, 2009).The phrase complaisant craft is oft hard to pin squander beca utilize of the fact that there argon rough(a)(prenominal) instills of judgement concerning this smell. Milton Friedman questions if companies atomic sub cod 18 required to take certificate of indebtedness for well-disposed issues (Kok et al., 2001, p. 286). He aired that the sole societal obligation of either system is to boost its tack together ons by dint of legal ship plentyal and that donating an organizations gold to the inn is harmful to the organization as this large(p) power reduce the organizations cyberspace or cause an increase in product worth or, in prodigious cases, afford two effects (Pinkston and Carroll, 1996). many enquiryers on the early(a) slew atomic number 18 of the position that becaus e of the ever changing competitive environment in which backinges argon carried show up, it is of the essence(p) that organizations in collective roughly sorting of in incorporated Social Responsibility standard that pull up stakes attend to foster its sustain skill in the environment. Boynton (2002) corroborates that affable righteousness is a value that specifies that e genuinely situation from family to firm- is liable for its members c argon and mountain be held accountable for its actions. This enquiry bleed supports the nonion that organizations should continually engage in corporate well-disposed righteousness activities thereof, as a conscious strategy, thr aces moldiness enterprise to incorporate environmental CSR in their respective(a) plumps and operations.Fast lamentable consumer unafraids (FMCG) to a fault known as Consumer incase Goods (CPG) industries behavior on the production of consumable goods which citizenry require from twenty- te trad hours to day. Fast Moving Consumer Goods s in any casege be say to be suffering price items that be used with a single or bound number of consumptions (Baron et al., 1991). Examples of FMCG or CPG products argon fargon and beverages, footwear, clothing products, tobacco and an variant(prenominal) world-wide products. The FMCG or CPG effort is an comprehensive for wholesale and retail consumer goods producing companies. A number of companies bunk indoors this industry simulations be Nestle, Procter and Gamble, Pfizer, Reckitt Benkiser, British Ameri scum bag Tobacco, Cadbury and Smithkline entirely to constitute a few.According to Jarvis (2003), business organizations endeavour to maximize net as much as they pot. Fast-moving consumer goods companies cannot therefore be leftfield proscribed in the quest for profit maximisation as the goods they produce argon sold to consumers in order to make slightly sort of gain. FMCG companies post humankinds with day to day products they require and as much(prenominal)(prenominal)(prenominal) iodin of their responsibilities is to ensure that the manufactured products meet the required quality standard. In manufacturing their products, some(prenominal) FMCG companies make use of some natural resources much(prenominal) as water, wood, flat coat etc., and sophisticated machineries which in some way affect the environment. make use of the earths natural resources without any provision for replacing the resources leads to depletion, plot of ground emissions from machineries pollute the environment.Corporations fulfill CSR activities because they hope they forgeting give them a competitive service oer their rivals. Branco and Rodigues (2006) conserve that CSR offers indwelling and external gains. The benefits are referred to as internal if savory in brotherly responsibleness activities attends a smoke nominate, disc everyplace and recognize its wealth and abilities, for insta nce corporate culture and expertise. External benefits, on the other, are those cogitateed to a sights status, staff awareness and culture these are essential indescribable assets which, though hard to easily replace or duplicate, can be developed or trashed depending on whether a pot is amicablely trustworthy or otherwise. More all over, because companies take from the environment direct or indirectly, it is their righteousness to ensure that the environment and golf club at oversized, and not that the stakeholders, benefit from some kind of affectionate obligation activities set up by the companies ( chromatic and Wankel, 1988).Speaking of the FMCG industry in coupled Kingdom, Bourlakis and Weightman (2004) assert that the industry, which includes the food and grocery sector, contri exceptes immensely to the countrys prudence as it provides employment to over 3.2 angiotensin-converting enzyme thousand thousand people. This intention accounts for close to 17% of t he countrys total workforce. The said(prenominal) authors excessively watch that the FMCG industry accounts for over 130 billion of consumer spending yielding, representing over 9% of the gross domestic product.1.2 THE MANUFACTURING celestial sphereThe British Prime Minister, Mr. Gordon Brown, declares that for this presidency manufacturing not exclusively has been, only when remains and im part endlessly be, critical to the success of the British economy (BIS, 2008). The join Kingdom is the 6th erectst manufacturing country in the world (See accompaniment 1 for details). It provides the economy with nigh 150billion per annum. The countrys productivity has increased by or so 50% since 1997. The United Kingdom attracts much foreign direct enthronization than any country apart from the USA (BIS, 2009). In UK, manufacturing accounts for 13% of the GDP excessively, betwixt 1997 and 2004, the average labour productivity grew by 4% over the United States, 5% above Fran ce and too 15% over Ger legion(predicate). The put down below shows a graph of the growth in productivity.Sheldons study on complaisant function of perplexity indicates that industries outlive with the shoot of servicing the ordering (Sheldon, 1923). The disciplines which unlike industries name made lately show that there is a link between the cabaret and the industry. It can therefore be said that the pop the question of creating industries is so that the society can benefit from it as well as sustain it. Sen (1999) observes that as people who live in a wide-cut sense together, we cannot escape the thought that the terrible occurrences that we see near us are quintessentially our problems. They are our province whether or not they are also anyone elses (Sen, 1999). The manufacturing sector is very huge and includes a range of industries much(prenominal) as Aerospace, Biotechnology, Chemical, Food and beverages, Pharmaceuticals etc. The FMCG industry is one of t he sub industries within the manufacturing sector. They sometimes face a lot of problems and as much(prenominal) postulate with criticisms from stakeholders on brotherly responsibility matters tear down though they give up utilitarian CSR agendas.From the size of the British manufacturing industry, it is fair to say that it uses a huge numerate of nada compared to the rest of the European Union.1.3 STATEMENT OF PROBLEMFrom sorting at FMCG Companys website and their neighborly responsibility/sustainability reporting materials, it lead be seen that they engage in corporate social responsibility at polar levels. Looking tight at FMCG companies within the United Kingdom, it depart be seen that almost all of them if not all, study corporate social responsibility and its effect on their business operations particularly as it pertains to their corporate image, competitive reinforcement and even their finances. Davis (1973) in his work asserts that engaging in corporate soc ial responsibility can im rise up an organizations finances and image.1.4 AIM OF PROJECTThe aim of the come out is to contri moreovere to the body of empirical entropy in the theater of operations of incarnate Social Responsibility by gathering information that lead help in the analysis of environmental corporate social responsibility within organizations in the Fast-Moving Consumer Goods industry. The findings of this research should provide managers and the academic world some more information in the airfield of Environmental corporal Social Responsibility.1.5 query OBJECTIVESThe main objective of this study on the analysis of data collect on environmental corporate social responsibility in some organizations in the Fast Moving Consumer Goods Industry is to critically look at the steps the friendships take in organism environmentally responsible and also how they measure the progress.Also, this dissertation will be attempt toTo read the data from selected FMCG companies relating to their environmental CSR practicesto identify the indicator/metrics used by the companies to bench mark their effect on environmental CSR in their organizationsto determine federal agents that set ahead environmental responsibility practices.To draw some conclusions and make some recommendations about the state of environmental CSR in the selected organizations.1.6 SCOPE AND LIMITATIONS OF THE STUDYThe FMCG industry is very large and as such it may not be workable for the tec to report on all the companies in the industry guardianship in mind the limitation of time and adequate resources. in that respectfore the reach of this study will be limited to environmental corporate social responsibility in selected FMCG companies. The study will take a look at the environmental corporate social activities they grow embarked on with rate to water usage reduction, CO2 emission reduction, reduction of waste produced, and total energy usage of each of the companies.Owing to lack of time and resources, the researcher will not be able to conduct a come after of environment corporate social responsibility in all UK-based ready moving consumer goods companies. It is worth noting though that a lot of them hold in out environmental corporate social responsibility activities and also report on them apply indices to which some of them are benchmarked.1.7 STRUCTURE OF THE DISSERTATIONThis study is merged into louvre chapters. Chapter one provides an introduction/background to the research study, together with a brief introduction of the sector and industry. Chapter two contains the literature review it comprehensively and critically reviews previous work done in this research area. Chapter deuce-ace highlights the research design and data collection process employed by the researcher. Chapter four contains an analysis of the data gathered together. Some findings and discussions of the research area are also furnished. The final chapter, chapter five, contains some recommendations and conclusions based on the findings in the melt down of carrying out this dissertation.CHAPTER 2 LITERATURE REVIEW 2.1 corporate tender provinceCorporate Social Responsibility has progressed from an irrelevant and a good deal discriminated concept to one that is today well-known and established in businesses round the ground (Lee, 2008). Corporate Social Responsibility can be thought of as an umbrella phrase that takes into consideration the various ways and operator a mess embarks on in trying to act honorablely and morally. In the finale couple of decades, CSR has become widely well-known (Campbell, 2007). According to some researchers, the outset book on CSR was written in 1953 by Howard Bowen, with the denomination Responsibilities of the man of affairs (Carroll, 1979 Kantanen, 2005).Defining Corporate Social Responsibility can prove to be a decomposable task as it has varied meanings to contrastive people. This is delinquent to the fact that there is no agreed definition and as such organizations that are meticulous in their goals of incorporating CSR activities into their businesses are faced with increase problems. Because of how complex CSR is, it is hard to provide a definition. Stakeholders therefore make use of different definitions that are in line with their business operations, goals and aims. The definitions are often also related to the sizes of the corporations and how they get wind their officers who are responsible for CSR activities within their organisations. thus there is no agreed definition of CSR, because different corporations translate it to fount them depending on their state of affairs (MacLagan, 1999 Campbell, 2007 Garriga Mele, 2004). Bowen (1953) defines corporate social responsibility as the obligations of businessmen to pursue those policies, to make those finalitys, or to follow those lines of action which are sexually attractive in terms of the objectives and values of o ur society. Manakkalathil and Rudolf (1995) explain CSR as the concern of organizations to conduct their business in a manner that reckon the rights of individuals and promotes human welfare. It is quite a weak explanation which makes it somewhat voiceless to actualize. Aguilera et al. (2007) emphasize that corporations should not border their CSR activities on stipulated law regarding such issues notwithstanding should also make provision for activities not stipulated in any statute they adhere to. Aguilera et al. (2007) assert that corporate social responsibility is a companys considerations of and chemical reaction to issues beyond the narrow sparing, technical and legal requirements of the company to effectuate social and environmental benefits a large with traditional scotchal gains. Carroll (1991) states that CSR consists of four verbalisms legal, frugal, ethical and kindly (discretionary) responsibility (See Appendix 1). Carroll (1991) argued that for a corpora tion striving to be seen as good within the society, all four aspects should be fulfilled. Carroll (1991) cites known economists Milton Friedmans statement in trying to explain the kinship of the four aspects. On Friedmans part, he was only pertained in the first three part of CSR stating that corporations exist to make as much money as possible spot conforming to the basic rules of society, some(prenominal) those embodied in the equity and those embodied in ethical custom (Carroll, 1991) and he totally objected to the eleemosynary aspect manifestation the business of business is business. In saying this, he meant that the usual economic standpoint only acknowledges legal, ethical and economic responsibility as a crucial principle while winning part in altruistic activities do not yield incentives for corporations. Levitt (1958) has a different approach to the CSR issue called the functional possibleness which considers CSR as ethically neutral. Corporations are consid ered to have particular tasks or organisational codes that communicate their situation in the society. Corporations are evaluateed to fulfil their social responsibilities by conforming to real legal frameworks, as the onus of find out social good is the responsibility of the state and not that of the corporations. The reliability and character of an organization is in its predisposition to win over conditions and subscribe. Organizations that react positively to monetary and other varying issues will thrive, while those that do not respond adequately will die. Consequently, if the adjacent situation requires that corporations be socially responsible then the corporations must endeavour to be so. Davis (1960) implies that social responsibility pertains to corporations ends and actions taken for discernments at least partly beyond the firms direct economic or technical come to. Eells and Walton (1961) debate the meaning of CSR and say that it pertains to the problems tha t arise when corporate enterprise casts its arse on the social scene, and the ethical principles that ought to govern the relationship between the corporation and society.Deakin and Hobbs (2007) assert that corporations that go ahead and carry out CSR activities which are over the minimum legal requirements stand to benefit immensely. Margolis and Walsh (2003) in the research they conducted imbed that most corporations, however, only focus on particular aspects of CSR primarily the economic aspect and try to shy away from the social and environmental aspects.2.1.1 STAKEHOLDER scheme OF CORPORATE SOCIAL RESPONSIBILITYThe most spoken about opening of corporate social responsibility is the stakeholder possibleness. freewoman (1984) explains the basic concepts and attributes of stakeholder management in his booked entitled Strategic Management A Stakeholder Approach. He defines stakeholders to be groups and individuals who can affect, or are affected by, the achievement of an orga nizations mission ( freeman, 1984) or otherwise regarded as those groups who have a stake in or a claim on the firm (Evan and Freeman, 1988). Freeman (2004) regards stakeholders as those groups who are vital to the survival and success of the corporation. Freeman explains that not only the owners of a corporation have genuine concerns about it but also persons and or groups of persons that might be affected or can by chance have an effect on the corporations doings and as such these groups of people have the right to be considered in any decision fashioning process within the corporation. Kaler (2006) on the other hand refers to the stakeholder supposition that supports the idea that corporations should be socially responsible. This theory states that the shareholders value is boosted through employee commitment, guest loyalty, contractor cooperation and immense support from the community amongst other things. Some researchers are also of the opinion that the performance of or ganizations can be attributed to their strategies in mickle and non-trade environments (Baron, 2000). Freeman and Evan (1990) assert that corporations that embark on social responsibility activities often times do it because they reliance that their managers are capable of boosting the corporations effectiveness in taking action regarding demands from external sources by handling and meeting the requests of the respective(a) shareholders.Stakeholder theory can be said to be a managerial military action because it expresses and directs how managers function (Freeman et al. 2006). In analyzing stakeholder theory, Donaldson and Preston (1995) proposed ethical guidelines for considering and selecting stakeholders. They made reference to this as being instrumental in the sense that when corporations manage their stakeholder activities accordingly, their performance will purify tremendously in relation to their stability, growth and profitability. According to Freeman (1994), the ai m of stakeholder theory is conveyed in two key questions and the first is determining what the function of the firm is. This invites managers to convey the feeling of importance built within the corporation and also display activities that pull together all the study stakeholders. This propels the corporation forward and makes it possible for it to produce outstanding performance, instituted with respect to its function and economic performance in the open market. The second question asked by the stakeholder theory deals with the sort of responsibility owed to the stakeholders by the managers. This motivates the managers to convey the means they take in conducting their businesses and particularly the kind of relationship they yearn for and have to demonstrate with their stakeholders in order to realize their purpose (Friedman and Miles, 2006).The stakeholder theory concept can be further broken down into normative stakeholder theory, which hinges on theories of how managers and sometimes stakeholders are supposed to behave, and also how they are supposed to view the beliefs of the corporation as they pertain to its ethical ethos (Friedman and Miles, 2006), and the descriptive stakeholder theory which is about how managers and stakeholders genuinely act and the perception of their responsibilities and actions.The stakeholder theory that, in fact, relates very well with corporate social responsibility is the instrumental stakeholder theory. This theory is at times associated with a corporations strategic style where the major concern for the corporation is how its managers perform if they are allowed to put their own interests and/or the interests of the corporation forward as it relates to profit maximation or the maximization of stockholder value (Friedman and Miles, 2006). Orlitzky et al (2003) abide by that some(prenominal) authors are of the opinion that corporate social performance might help a corporation towards acquiring new abilities, raw mater ials and possibilities which are obvious in a corporations culture, expertise, business and workforce.Corporate social performance is fast related to corporate social responsibility and it is sometimes fancied that it will help cast out managerial abilities that boost employee contribution, organization and harmonization together with a ground-breaking management approach (Shrivastava, 1995). The reputation perspective theory on the other hand, states that superficially, corporate social performance might hike up the development of a positive figure with a corporations customers, its investors, banks and contractors which it can in the long run benefit from through having access to capital and also possibly draw high-quality employees towards it and also enhance the good will of its on-line(prenominal) employees towards the organization which over time the corporation might benefit from in financial terms (Orlitzky et al, 2003). In recent times, it will be seen that so many corporations and/or establishments have planned and sustained their businesses in ways that total to the concept of the stakeholder theory (Collins and Porras, 1994). For example, corporations like Procter and Gamble, Reckitt Benckiser, British American Tobacco, to mention a few, present an excellent example of the value managers place on the bedrock of stakeholder theory. It is worth noting that these corporations place high importance on their stakeholders and organizational wealth but at the same time do not stress on profitability as the push factor of their business. This is because they are full aware of the worth and relationship with stakeholders as an important factor if they are to succeed.Friedman (1970) on the other hand is of a contrary opinion. He is of the opinion that when executives take decisions it should only be for the purpose of wealth introduction for its stakeholders. It is manifest that Friedman does not support the concept of CSR. He holds that the prin cipal duty of directors is towards their staff. In his opinion, a corporate executive may take decisions that directly concern himself but should never take decisions concerning, for example, price mark down of products or pollution due to carbon emission, beyond the obligations imposed on the corporation by law. Friedman states further that by doing these, the corporate executive will be spending the corporations wealth and forcing its stockholders to pass on levy while at the same time taking decision on the expenditure of the corporations tax returns. Friedman (1970) asserts that authoritiess demand taxes from corporate entities, ensuring that there are adequate governmental, legal and fundamental measures in place to force compliance. Friedman stresses that executives are selected by stockholders as representatives to treasure their interest and this motivation dies gradually if the corporate executive wastes the stockholders wealth on social activities.Friedmans belief is that government instructs corporations to pay a certain kernel as tax and if paid, government use the tax appropriately, thereby making it unessential for corporations themselves to engage in any CSR projects. In this regard, one assumes that such taxes will be adequate to ensure the effective handling by the government of CSR activities that benefit the environment and the larger society. In Friedmans perception, the corporations that pay their taxes as and when due are responsible. Jensen and Meckling (1976) assert that corporate social responsibility may have an adverse effect on corporations particularly if the bell of implementing CSR projects becomes exceptionally high.There are certain contrary views that claim that many plainly socially responsible corporations actually benefit far more from their CSR activities than the head societies that were expect to be the main beneficiaries. For example, relying on a report by Corporate Watch (2006), more than 80% of corporate C SR decision-makers were confident in the ability of good CSR practice to deliver branding and employee benefits. To take the example of corporate philanthropy, when corporations make donations to munificence, they are giving away their shareholders money, which they can only do if they see potential profit in it. This may be because they emergency to improve their image by associating themselves with a cause, to exploit a specious vehicle for advertising, or to counter the claims of pressure groups, but there is always an underlying financial motive, so the company benefits more than the charity.Paine (2002) affirms that the natural selection to neglect corporate social responsibility will in some way indicate the corporations disrespect for its stakeholders who include its workers, suppliers, clientele and the society at large. Quoting CIPD (2009), When CSR is done well it means a precious, though precarious, corporate trust in your business. Successful CSR can bring benefits s uch as a discrete position in your marketplace, protecting your employer brand, and building credibility and trust with online and potential customers and employees. It can help significantly with recruitment, engagement and computer storage of employees.Some academics entrust that some corporations embark on corporate social responsibility projects for strategic reasons. Xueming and Bhattacharya (2008) affirm that in recent times, corporate social responsibility matches the strategic plan of many corporations. They mention that although some corporations carry out a range of socially responsible activities such as philanthropic acts, corporate responsibility and sustainability reporting, marketing and stakeholder events to mention a few, they do so not because they feel it is the right thing to do but regard it is a smart thing to do.2.1.1 GOVERNMENT AS STAKEHOLDERSdoor guard and Van der Linde (1995) believe that countries impose firm directives on legal residence organizations , and the relationship government has with organizations corporate social responsibility issues positively affects them. It encourages them to form policies pertaining to the environment, cost reduction, sustainability of their products, and also increase the organizations competitive advantage in the global marketplace. This means that the government can control organizations and ensure they adhere to its directives and policies. eventide though government has great control on the way organizations operate their businesses through the use of regulative guidelines and policies, the activities of organizations have also had a increment influence on the government. Thorne et al (2008) assert that managing this relationship with government officials while navigating the high-octane world of politics is a major challenge for firms, both large and small. They explain that because of the varied nature of the environment, there are several competitors and suppliers in the decision ma king process, and as such raising the economic risks. Being stakeholders, organizations and government are considered mutual stakeholders and as such both sides can cooperate and play a part in the decision making process. In a Questions-and-Answers session with the Chairman and CEO, Charles Holliday, of DuPont a science-based termination company, Holliday was asked on how businesses and the government can effectively collaborate on standards-setting and value-creation for their stakeholders. He replied as follows The complexities and opportunities of modern business and industry are too great to assume that regulation alone can get us where we have to go. Regulation, as we have seen historically, is not a precision irradiation for change. however it can overcome inertia and get things going. The landmark environmental legislation of the 1970s and 1980s set in motion the kind of change that in the U.S. has led to cleaner air and water. No one doubts that. He further said that in regulating sustainability, We can expect that government will identify some pressure points where regulatory instruments can advance the cause. But real progress in sustainability will come from what we build into products and services, in the way we design and operate our plants and distribution networks, in the way we think about the ultimate disposition of the things we make, even and especially in the way we direct our research and development. Its hard to imagine regulatory protocols that can encompass all of that. Industry has to be imaginative and proactive and show that we can accomplish the things our stakeholders expect of us, especially those things that go beyond the earn of the law (as cited in Freeman et al, 2006). He also mentioned that at DuPont, they have reduced their greenhouse gas emissions by 72% since 1990 and this is because it was evaluate of them by their stakeholders to be proactive, and that gave them the push. This further shows how corporations work on their own in unison with government directives designed towards improving the society. Marcus (2002) and Delmas and Terlaak (2002) are quick to assert that some corporations might be discouraged if government implements regulations they consider miserly and as such corporations should be allowed to make their own decisions as they consider appropriate.2.2 THE CORPORATE SOCIAL RESPONSIBILITY SCHOOLS OF THOUGHTSThe issue of whether corporations should be socially responsible or not, the extent to which they should be responsible, to whom they should be responsible and the context in which they should be responsible, has been a major debate amongst researchers. There are two shoals of thought which have differing opinions on CSR matters. They are the restrictive and expansionist opinions. The restrictive school of thought upholds the profit maximisation stand while the other school believes that corporations should be socially responsible.2.2.1 THE EXPANSIONIST SCHOOL OF THOUGHT The expansionists believe that environmental problems are caused by businesses and for that reason they should be liable for their externalities. Stoner and Wankel (1988) have that corporations should take into consideration the impact of their environmental activities on the society and for that reason they should act responsibly not only for the benefit of their stakeholders but to the customary populous. Davis and Blomstrom (1975) give an account of their opinion of how a model corporation should look. They assert that it should provide an opportunity for investment, a good working condition, be ethically considerate, be a good corporation to do business with, pay their tax contributions and support governments endeavours, be good to the community they work in, extend to social endeavours and public concerns. Crowther and Rayman- Bacchus (2004) assert that the activities of an organization impacts upon the external environment and have suggested that such an organization shoul d therefore be accountable to a wider sense of hearing than simply its shareholders. They also mention that the recognition of the rights of all stakeholders and the duty of a business to be accountable in this wider context therefore has been mostly a relatively recent phenomenon. In summary, corporate social responsibility should include responsibility to the owners of the business,Environmental Corporate Social ResponsibilityEnvironmental Corporate Social ResponsibilityCHAPTER 1 INTRODUCTIONThis dissertation discusses and undertakes an analysis of some data gathered on Environmental Corporate Social Responsibility within organizations in the Fast Moving Consumer Goods Industry. The environmental social responsibility activities to be looked at within the selected companies are their water usage level, emissions, waste produced and total energy used with regard to being aware of environmental concerns. In this chapter, the aim and objectives of the study are adumbrate and a bri ef introduction is furnished.1.1 BACKGROUND AND OVERVIEW OF STUDYIn recent times, there has been much debate about whether corporations should be socially responsible or not and also the extent to which they should be responsible. With the global recession at the moment, the future years will show if CSR has been taking on by corporations or if it is, as critics say, merely a marketing stunt designed to make their business attractive (The Independent, 2009).The phrase social responsibility is often hard to pin down because of the fact that there are several schools of thought concerning this notion. Milton Friedman questions if companies are required to take responsibility for social issues (Kok et al., 2001, p. 286). He stressed that the sole social responsibility of any organization is to boost its profits through legal ways and that donating an organizations funds to the society is harmful to the organization as this might reduce the organizations profit or cause an increase in p roduct price or, in exceptional cases, have both effects (Pinkston and Carroll, 1996). Some researchers on the other hand are of the opinion that because of the ever changing competitive environment in which businesses are carried out, it is essential that organizations incorporate some sort of Corporate Social Responsibility standard that will help foster its sustainability in the environment. Boynton (2002) asserts that social responsibility is a value that specifies that every situation from family to firm- is responsible for its members conduct and can be held accountable for its actions. This research work supports the notion that organizations should continually engage in corporate social responsibility activities therefore, as a conscious strategy, corporations must endeavour to incorporate environmental CSR in their diverse functions and operations.Fast moving consumer goods (FMCG) also known as Consumer Packaged Goods (CPG) industries focus on the production of consumable goods which people require from day to day. Fast Moving Consumer Goods can be said to be low price items that are used with a single or limited number of consumptions (Baron et al., 1991). Examples of FMCG or CPG products are food and beverages, footwear, clothing products, tobacco and other general products. The FMCG or CPG industry is an umbrella for wholesale and retail consumer goods producing companies. A number of companies function within this industry examples are Nestle, Procter and Gamble, Pfizer, Reckitt Benkiser, British American Tobacco, Cadbury and Smithkline just to mention a few.According to Jarvis (2003), business organizations endeavour to maximise profits as much as they can. Fast-moving consumer goods companies cannot therefore be left out in the quest for profit maximisation as the goods they produce are sold to consumers in order to make some sort of gain. FMCG companies provide humans with day to day products they require and as such one of their responsibilit ies is to ensure that the manufactured products meet the required quality standard. In manufacturing their products, some FMCG companies make use of some natural resources such as water, wood, soil etc., and sophisticated machineries which in some way affect the environment. Making use of the earths natural resources without any provision for replacing the resources leads to depletion, while emissions from machineries pollute the environment.Corporations implement CSR activities because they hope they will give them a competitive advantage over their rivals. Branco and Rodigues (2006) assert that CSR offers internal and external gains. The benefits are referred to as internal if engaging in social responsibility activities helps a corporation build, develop and manage its wealth and abilities, for instance corporate culture and expertise. External benefits, on the other, are those linked to a corporations status, staff awareness and culture these are essential indescribable assets w hich, though hard to easily replace or duplicate, can be developed or trashed depending on whether a corporation is socially responsible or otherwise. Moreover, because companies take from the environment directly or indirectly, it is their responsibility to ensure that the environment and society at large, and not only the stakeholders, benefit from some kind of social responsibility activities set up by the companies (Stoner and Wankel, 1988).Speaking of the FMCG industry in United Kingdom, Bourlakis and Weightman (2004) assert that the industry, which includes the food and grocery sector, contributes immensely to the countrys economy as it provides employment to over 3.2 million people. This figure accounts for close to 17% of the countrys total workforce. The same authors also mention that the FMCG industry accounts for over 130 billion of consumer spending yielding, representing over 9% of the GDP.1.2 THE MANUFACTURING SECTORThe British Prime Minister, Mr. Gordon Brown, declare s that for this government manufacturing not only has been, but remains and will always be, critical to the success of the British economy (BIS, 2008). The United Kingdom is the 6th largest manufacturing country in the world (See appendix 1 for details). It provides the economy with about 150billion per annum. The countrys productivity has increased by about 50% since 1997. The United Kingdom attracts more foreign direct investment than any country apart from the USA (BIS, 2009). In UK, manufacturing accounts for 13% of the GDP also, between 1997 and 2004, the average labour productivity grew by 4% over the United States, 5% above France and also 15% over Germany. The figure below shows a graph of the growth in productivity.Sheldons study on social responsibility of management indicates that industries exist with the aim of servicing the society (Sheldon, 1923). The developments which various industries have made lately show that there is a link between the society and the industry. It can therefore be said that the purpose of creating industries is so that the society can benefit from it as well as sustain it. Sen (1999) observes that as people who live in a broad sense together, we cannot escape the thought that the terrible occurrences that we see around us are quintessentially our problems. They are our responsibility whether or not they are also anyone elses (Sen, 1999). The manufacturing sector is very huge and includes a range of industries such as Aerospace, Biotechnology, Chemical, Food and beverages, Pharmaceuticals etc. The FMCG industry is one of the sub industries within the manufacturing sector. They sometimes face a lot of problems and as such struggle with criticisms from stakeholders on social responsibility matters even though they have functional CSR agendas.From the size of the British manufacturing industry, it is fair to say that it uses a huge amount of energy compared to the rest of the European Union.1.3 STATEMENT OF PROBLEMFrom loo king at FMCG Companys website and their social responsibility/sustainability reporting materials, it will be seen that they engage in corporate social responsibility at different levels. Looking closely at FMCG companies within the United Kingdom, it will be seen that almost all of them if not all, consider corporate social responsibility and its effect on their business operations particularly as it pertains to their corporate image, competitive advantage and even their finances. Davis (1973) in his work asserts that engaging in corporate social responsibility can improve an organizations finances and image.1.4 AIM OF PROJECTThe aim of the project is to contribute to the body of empirical data in the area of Corporate Social Responsibility by gathering information that will help in the analysis of environmental corporate social responsibility within organizations in the Fast-Moving Consumer Goods industry. The findings of this research should provide managers and the academic world some more information in the area of Environmental Corporate Social Responsibility.1.5 RESEARCH OBJECTIVESThe main objective of this study on the analysis of data gathered on environmental corporate social responsibility in some organizations in the Fast Moving Consumer Goods Industry is to critically look at the steps the corporations take in being environmentally responsible and also how they measure the progress.Also, this dissertation will be attempt toTo analyse the data from selected FMCG companies relating to their environmental CSR practicesto identify the indicator/metrics used by the companies to benchmark their performance on environmental CSR in their organizationsto determine factors that encourage environmental responsibility practices.To draw some conclusions and make some recommendations about the state of environmental CSR in the selected organizations.1.6 SCOPE AND LIMITATIONS OF THE STUDYThe FMCG industry is very large and as such it may not be feasible for the r esearcher to report on all the companies in the industry bearing in mind the limitation of time and adequate resources. Therefore the scope of this study will be limited to environmental corporate social responsibility in selected FMCG companies. The study will take a look at the environmental corporate social activities they have embarked on with respect to water usage reduction, CO2 emission reduction, reduction of waste produced, and total energy usage of each of the companies.Owing to lack of time and resources, the researcher will not be able to conduct a survey of environment corporate social responsibility in all UK-based fast moving consumer goods companies. It is worth noting though that a lot of them carry out environmental corporate social responsibility activities and also report on them using indices to which some of them are benchmarked.1.7 STRUCTURE OF THE DISSERTATIONThis study is structured into five chapters. Chapter one provides an introduction/background to the r esearch study, together with a brief introduction of the sector and industry. Chapter two contains the literature review it comprehensively and critically reviews previous work done in this research area. Chapter three highlights the research design and data collection process employed by the researcher. Chapter four contains an analysis of the data gathered together. Some findings and discussions of the research area are also furnished. The final chapter, chapter five, contains some recommendations and conclusions based on the findings in the course of carrying out this dissertation.CHAPTER 2 LITERATURE REVIEW 2.1 CORPORATE SOCIAL RESPONSIBILITYCorporate Social Responsibility has progressed from an irrelevant and often discriminated concept to one that is today well-known and established in businesses round the globe (Lee, 2008). Corporate Social Responsibility can be thought of as an umbrella phrase that takes into consideration the various ways and means a corporation embarks on in trying to act ethically and morally. In the last couple of decades, CSR has become widely well-known (Campbell, 2007). According to some researchers, the first book on CSR was written in 1953 by Howard Bowen, with the title Responsibilities of the Businessman (Carroll, 1979 Kantanen, 2005).Defining Corporate Social Responsibility can prove to be a complex task as it has varied meanings to different people. This is due to the fact that there is no agreed definition and as such organizations that are meticulous in their goals of incorporating CSR activities into their businesses are faced with compound problems. Because of how complex CSR is, it is hard to provide a definition. Stakeholders therefore make use of different definitions that are in line with their business operations, goals and aims. The definitions are often also related to the sizes of the corporations and how they regard their officers who are responsible for CSR activities within their organisations. Thus there is no agreed definition of CSR, because different corporations translate it to suit them depending on their state of affairs (MacLagan, 1999 Campbell, 2007 Garriga Mele, 2004). Bowen (1953) defines corporate social responsibility as the obligations of businessmen to pursue those policies, to make those decisions, or to follow those lines of action which are desirable in terms of the objectives and values of our society. Manakkalathil and Rudolf (1995) explain CSR as the duty of organizations to conduct their business in a manner that respects the rights of individuals and promotes human welfare. It is quite a weak explanation which makes it somewhat tough to actualize. Aguilera et al. (2007) emphasize that corporations should not border their CSR activities on stipulated legislation regarding such issues but should also make provision for activities not stipulated in any legislation they adhere to. Aguilera et al. (2007) assert that corporate social responsibility is a companys cons iderations of and response to issues beyond the narrow economic, technical and legal requirements of the company to accomplish social and environmental benefits along with traditional economic gains. Carroll (1991) states that CSR consists of four aspects legal, economic, ethical and philanthropic (discretionary) responsibility (See Appendix 1). Carroll (1991) argued that for a corporation striving to be seen as good within the society, all four aspects should be fulfilled. Carroll (1991) cites renowned economists Milton Friedmans assertion in trying to explain the relationship of the four aspects. On Friedmans part, he was only interested in the first three parts of CSR stating that corporations exist to make as much money as possible while conforming to the basic rules of society, both those embodied in the law and those embodied in ethical custom (Carroll, 1991) and he totally objected to the philanthropic aspect saying the business of business is business. In saying this, he mea nt that the usual economic standpoint only acknowledges legal, ethical and economic responsibility as a crucial principle while taking part in altruistic activities do not yield incentives for corporations. Levitt (1958) has a different approach to the CSR issue called the functional theory which considers CSR as ethically neutral. Corporations are considered to have particular tasks or organizational codes that communicate their position in the society. Corporations are expected to fulfil their social responsibilities by conforming to existing legal frameworks, as the onus of determining social good is the responsibility of the state and not that of the corporations. The reliability and character of an organization is in its sensitivity to varying conditions and demand. Organizations that react positively to financial and other varying issues will thrive, while those that do not respond adequately will die. Consequently, if the immediate situation requires that corporations be soci ally responsible then the corporations must endeavour to be so. Davis (1960) implies that social responsibility pertains to corporations decisions and actions taken for reasons at least partially beyond the firms direct economic or technical interest. Eells and Walton (1961) debate the meaning of CSR and say that it pertains to the problems that arise when corporate enterprise casts its shadow on the social scene, and the ethical principles that ought to govern the relationship between the corporation and society.Deakin and Hobbs (2007) assert that corporations that go ahead and carry out CSR activities which are over the minimum legal requirements stand to benefit immensely. Margolis and Walsh (2003) in the research they conducted found that most corporations, however, only focus on particular aspects of CSR mainly the economic aspect and try to shy away from the social and environmental aspects.2.1.1 STAKEHOLDER THEORY OF CORPORATE SOCIAL RESPONSIBILITYThe most spoken about theory of corporate social responsibility is the stakeholder theory. Freeman (1984) explains the basic concepts and attributes of stakeholder management in his booked entitled Strategic Management A Stakeholder Approach. He defines stakeholders to be groups and individuals who can affect, or are affected by, the achievement of an organizations mission (Freeman, 1984) or otherwise regarded as those groups who have a stake in or a claim on the firm (Evan and Freeman, 1988). Freeman (2004) regards stakeholders as those groups who are vital to the survival and success of the corporation. Freeman explains that not only the owners of a corporation have genuine concerns about it but also persons and or groups of persons that might be affected or can possibly have an effect on the corporations doings and as such these groups of people have the right to be considered in any decision making process within the corporation. Kaler (2006) on the other hand refers to the stakeholder theory that supports the notion that corporations should be socially responsible. This theory states that the shareholders value is boosted through employee commitment, customer loyalty, contractor cooperation and immense support from the community amongst other things. Some researchers are also of the opinion that the performance of organizations can be attributed to their strategies in trade and non-trade environments (Baron, 2000). Freeman and Evan (1990) assert that corporations that embark on social responsibility activities often times do it because they trust that their managers are capable of boosting the corporations effectiveness in taking action regarding demands from external sources by handling and meeting the requests of the diverse shareholders.Stakeholder theory can be said to be a managerial activity because it expresses and directs how managers function (Freeman et al. 2006). In analyzing stakeholder theory, Donaldson and Preston (1995) proposed ethical guidelines for considering and selecting stakeholders. They made reference to this as being instrumental in the sense that when corporations manage their stakeholder activities accordingly, their performance will improve tremendously in relation to their stability, growth and profitability. According to Freeman (1994), the aim of stakeholder theory is conveyed in two key questions and the first is determining what the function of the firm is. This influences managers to convey the feeling of importance built within the corporation and also display activities that pull together all the major stakeholders. This propels the corporation forward and makes it possible for it to produce outstanding performance, instituted with respect to its function and economic performance in the open market. The second question asked by the stakeholder theory deals with the sort of responsibility owed to the stakeholders by the managers. This motivates the managers to convey the means they take in conducting their businesses and part icularly the kind of relationship they yearn for and have to build with their stakeholders in order to realize their purpose (Friedman and Miles, 2006).The stakeholder theory concept can be further broken down into normative stakeholder theory, which hinges on theories of how managers and sometimes stakeholders are supposed to behave, and also how they are supposed to view the beliefs of the corporation as they pertain to its ethical ethos (Friedman and Miles, 2006), and the descriptive stakeholder theory which is about how managers and stakeholders actually act and the perception of their responsibilities and actions.The stakeholder theory that, in fact, relates very well with corporate social responsibility is the instrumental stakeholder theory. This theory is at times associated with a corporations strategic style where the major concern for the corporation is how its managers perform if they are allowed to put their own interests and/or the interests of the corporation forward as it relates to profit maximization or the maximization of stockholder value (Friedman and Miles, 2006). Orlitzky et al (2003) mention that several authors are of the opinion that corporate social performance might help a corporation towards acquiring new abilities, raw materials and possibilities which are apparent in a corporations culture, expertise, business and workforce.Corporate social performance is closely related to corporate social responsibility and it is sometimes assumed that it will help advance managerial abilities that boost employee contribution, organization and harmonization together with a ground-breaking management approach (Shrivastava, 1995). The reputation perspective theory on the other hand, states that superficially, corporate social performance might encourage the development of a positive figure with a corporations customers, its investors, banks and contractors which it can in the long run benefit from through having access to capital and also possibl y draw high-quality employees towards it and also enhance the good will of its current employees towards the organization which over time the corporation might benefit from in financial terms (Orlitzky et al, 2003). In recent times, it will be seen that so many corporations and/or establishments have planned and sustained their businesses in ways that correspond to the concept of the stakeholder theory (Collins and Porras, 1994). For example, corporations like Procter and Gamble, Reckitt Benckiser, British American Tobacco, to mention a few, present an excellent example of the value managers place on the fundamentals of stakeholder theory. It is worth noting that these corporations place high importance on their stakeholders and organizational wealth but at the same time do not stress on profitability as the push factor of their business. This is because they are fully aware of the worth and relationship with stakeholders as an important factor if they are to succeed.Friedman (1970) on the other hand is of a contrary opinion. He is of the opinion that when executives take decisions it should only be for the purpose of wealth creation for its stakeholders. It is evident that Friedman does not support the concept of CSR. He holds that the principal duty of directors is towards their staff. In his opinion, a corporate executive may take decisions that directly concern himself but should never take decisions concerning, for example, price mark down of products or pollution due to carbon emission, beyond the obligations imposed on the corporation by law. Friedman states further that by doing these, the corporate executive will be spending the corporations wealth and forcing its stockholders to pay tax while at the same time taking decision on the expenditure of the corporations tax returns. Friedman (1970) asserts that governments demand taxes from corporate entities, ensuring that there are adequate governmental, legal and constitutional measures in place to force compliance. Friedman stresses that executives are selected by stockholders as representatives to protect their interest and this motivation dies gradually if the corporate executive wastes the stockholders wealth on social activities.Friedmans belief is that government instructs corporations to pay a certain amount as tax and if paid, government use the tax appropriately, thereby making it unnecessary for corporations themselves to engage in any CSR projects. In this regard, one assumes that such taxes will be adequate to ensure the effective handling by the government of CSR activities that benefit the environment and the larger society. In Friedmans perception, the corporations that pay their taxes as and when due are responsible. Jensen and Meckling (1976) assert that corporate social responsibility may have an adverse effect on corporations especially if the cost of implementing CSR projects becomes exceptionally high.There are certain contrary views that claim that many ostens ibly socially responsible corporations actually benefit far more from their CSR activities than the target societies that were expected to be the main beneficiaries. For example, relying on a report by Corporate Watch (2006), more than 80% of corporate CSR decision-makers were confident in the ability of good CSR practice to deliver branding and employee benefits. To take the example of corporate philanthropy, when corporations make donations to charity, they are giving away their shareholders money, which they can only do if they see potential profit in it. This may be because they want to improve their image by associating themselves with a cause, to exploit a cheap vehicle for advertising, or to counter the claims of pressure groups, but there is always an underlying financial motive, so the company benefits more than the charity.Paine (2002) affirms that the choice to neglect corporate social responsibility will in some way indicate the corporations disrespect for its stakeholde rs who include its workers, suppliers, clientele and the society at large. Quoting CIPD (2009), When CSR is done well it means a precious, though precarious, trust in your business. Successful CSR can bring benefits such as a distinct position in your marketplace, protecting your employer brand, and building credibility and trust with current and potential customers and employees. It can help significantly with recruitment, engagement and retention of employees.Some academics believe that some corporations embark on corporate social responsibility projects for strategic reasons. Xueming and Bhattacharya (2008) affirm that in recent times, corporate social responsibility matches the strategic plan of many corporations. They mention that although some corporations carry out a range of socially responsible activities such as philanthropic acts, corporate responsibility and sustainability reporting, marketing and stakeholder events to mention a few, they do so not because they feel it i s the right thing to do but regard it is a smart thing to do.2.1.1 GOVERNMENT AS STAKEHOLDERSPorter and Van der Linde (1995) believe that countries impose firm directives on home organizations, and the relationship government has with organizations corporate social responsibility issues positively affects them. It encourages them to create policies pertaining to the environment, cost reduction, sustainability of their products, and also increase the organizations competitive advantage in the international marketplace. This means that the government can control organizations and ensure they adhere to its directives and policies.Even though government has great control on the way organizations operate their businesses through the use of regulatory guidelines and policies, the activities of organizations have also had a growing influence on the government. Thorne et al (2008) assert that managing this relationship with government officials while navigating the dynamic world of politics is a major challenge for firms, both large and small. They explain that because of the varied nature of the environment, there are several competitors and suppliers in the decision making process, and as such raising the economic risks. Being stakeholders, organizations and government are considered mutual stakeholders and as such both sides can cooperate and play a part in the decision making process. In a Questions-and-Answers session with the Chairman and CEO, Charles Holliday, of DuPont a science-based solution company, Holliday was asked on how businesses and the government can effectively collaborate on standards-setting and value-creation for their stakeholders. He replied as follows The complexities and opportunities of modern business and industry are too great to assume that regulation alone can get us where we have to go. Regulation, as we have seen historically, is not a precision tool for change. But it can overcome inertia and get things going. The landmark environmen tal legislation of the 1970s and 1980s set in motion the kind of change that in the U.S. has led to cleaner air and water. No one doubts that. He further said that in regulating sustainability, We can expect that government will identify some pressure points where regulatory instruments can advance the cause. But real progress in sustainability will come from what we build into products and services, in the way we design and operate our plants and distribution networks, in the way we think about the ultimate disposition of the things we make, even and especially in the way we direct our research and development. Its hard to imagine regulatory protocols that can encompass all of that. Industry has to be imaginative and proactive and show that we can accomplish the things our stakeholders expect of us, especially those things that go beyond the letter of the law (as cited in Freeman et al, 2006). He also mentioned that at DuPont, they have reduced their greenhouse gas emissions by 7 2% since 1990 and this is because it was expected of them by their stakeholders to be proactive, and that gave them the push. This further shows how corporations work on their own in accordance with government directives designed towards improving the society. Marcus (2002) and Delmas and Terlaak (2002) are quick to assert that some corporations might be discouraged if government implements regulations they consider stringent and as such corporations should be allowed to make their own decisions as they consider appropriate.2.2 THE CORPORATE SOCIAL RESPONSIBILITY SCHOOLS OF THOUGHTSThe issue of whether corporations should be socially responsible or not, the extent to which they should be responsible, to whom they should be responsible and the context in which they should be responsible, has been a major debate amongst researchers. There are two schools of thought which have differing opinions on CSR matters. They are the restrictive and expansionist opinions. The restrictive school of thought upholds the profit maximisation stand while the other school believes that corporations should be socially responsible.2.2.1 THE EXPANSIONIST SCHOOL OF THOUGHTThe expansionists believe that environmental problems are caused by businesses and for that reason they should be liable for their externalities. Stoner and Wankel (1988) maintain that corporations should take into consideration the impact of their environmental activities on the society and for that reason they should act responsibly not only for the benefit of their stakeholders but to the general populous. Davis and Blomstrom (1975) give an account of their opinion of how a model corporation should look. They assert that it should provide an opportunity for investment, a good working condition, be ethically considerate, be a good corporation to do business with, pay their tax contributions and support governments endeavours, be good to the community they work in, contribute to social endeavours and public concern s. Crowther and Rayman- Bacchus (2004) assert that the activities of an organization impacts upon the external environment and have suggested that such an organization should therefore be accountable to a wider audience than simply its shareholders. They also mention that the recognition of the rights of all stakeholders and the duty of a business to be accountable in this wider context therefore has been largely a relatively recent phenomenon. In summary, corporate social responsibility should include responsibility to the owners of the business,