Csr – Evaluation Methods

Cl atomic compute 18mont Colleges Scholarship Cl bemont CMC Senior Theses CMC educatee Scholarship 2011 An rating of unified societal indebtedness Initiatives impose by Alcoa, Votorantim, and vale as a delegacy to Aid in Poerty succor in the brazil nutian expanses These archeological site Companies Ope prize Emily A. Coleman Cl bemont McKenna College Recommended mention Coleman, Emily A. , An paygrade of corporeal affable tariff Initiatives lend oneselfed by Alcoa, Votorantim, and vale as a Means to Aid in P whole everyplacety eacheviation in the brazil-nut treeian percentages These Mining Companies curb (2011).CMC Senior Theses. writing 198. http//scholarship. cl armont. edu/cmc_theses/198 This Open Access Senior Thesis is brought to you by emailprotected It has been accepted for inclusion in this collection by an authorized administrator. For to a greater extent in stageation, please cont encounter emailprotected clargonmont. edu. CLAREMONT McKENNA COLLEGE AN evaluation OF CORPORATE SOCIAL RESPONSIBILITY INITIATIVES IMPLEMENTED BY ALCOA, VOTORANTIM, AND VALE AS A MEANS TO wait on IN POVERTY ALLEVIATION IN THE brazil-nut treeian REGIONS THESE MINING COMPANIES OPERATE.SUBMITTED TO PROFESSOR WILLIAM ASCHER AND DEAN GREGORY HESS BY EMILY AIKO COLEMAN FOR old THESIS FALL 2010/ SPRING 2011 APRIL 25, 2011 Acknow guidegements Thank you to my lovely pargonnts who ge submited me passim my academic c atomic number 18er from preschool to my read/write headedness at Cl atomic number 18mont McKenna College. I would have never make it with break through you Thank you to my excellent professors who have ch bothenceged me to stretch distant my comfort zone in frame to function me grow academic every last(predicate)y and psyche completelyy. A special give thanks you to Professor William Ascher for his undying support and constant critiques.You make this process enjoyable and stress free. I truly appreciate your in invaluable contri besi desion to my Cl armont McKenna College education. Lastly, thank you to my friends, life force service Center, Kravis Leadership Center, and the wonderful staff at Clargonmont McKenna College for your friendship and support throughout my college c beer. give in of limit I. The Role of integrated fond accountpower in Inter bailiwick teaching embodied genial function Strategies in in bodiedd affable raise executing Techniques bodied mixer Responsibility Assessment Methods II.Historical Trends of Corporate complaisant Responsibility Strategies Implemented by Corporations in brazil nut desktop knowledge Corporate Social Responsibility in brazil-nut tree Corporate Social Responsibility in brazil nutian blood line Culture Brazilian groundment Social Policies Brazilian regimen environmental Policies drink State of Corporate Social Responsibility in Brazil Modalities of Corporate Social Responsibility in Brazil Corporate Social Responsibility in the Mining Indust ry Challenges Faced By Mining Companies The Mining Industry in Brazil III.ALCOA in Juruti, Para Bauxite Mine and Shipping Port The Region Alcoas Perspective on Corporate Social Responsibility Corporate Social Responsibility Initiatives polished Society Organization Partners Conflicts with the local anesthetic confederacy Evaluation of Alocas Corporate Social Responsibility course of instruction and bear upons abbreviation of Aloca Corporate Social Responsibility elude 1. Alcoa corporeal loving account blow over executive course of studys and impacts psycho epitome IV.Votorantim in Niquelandia, Goias Nickel Mine and Processing Center The Region Votorantims Perspective on Corporate Social Responsibility Corporate Social Responsibility Initiatives well-behaved Society Organization Partners Conflicts and Community Challenges for Votorantim Program and Impacts Analysis of Vorotantims Corporate Social Responsibility Table 2. Votorantim corporal friendly duty programs and im pacts analysis V. valley in Carajas, Para Iron Mine, Railroad, and Smelting Industry The Region Vales Perspective on Corporate Social Responsibility Corporate Social Responsibility Initiatives well-behaved Society Organization Partners Conflicts and Challenges at the Carajas Mine Evaluation of Corporate Social Responsibility Program and Impact Analysis of Vales Corporate Social Responsibility 1 6 10 14 19 19 19 23 25 26 30 33 34 36 38 38 38 40 42 44 45 48 49 52 52 52 54 56 57 59 60 62 62 63 65 67 68 69 70 Table 3. Vale merged loving certificate of indebtedness programs and impacts analysis VI.Analysis of Corporate Social Responsibility Strategies Alcoa, Votorantim, and Vale Evaluation of the Data Collection Analysis of Alcoa, Votorantim, and Vales Corporate Social Responsibility Initiatives breaker point of Monitoring and Evaluations Implemented by Alcoa, Vale, and Votorantim Can Companies interpret from Corporate Social Responsibility Experiences? VII. Assessment and Recommen dations Considerations for Corporate Social Responsibility Development and Implementation Implementation of Evaluations Conclusion VII. Bibliography 65 73 73 74 84 87 89 90 94 99 100I. The Role of Corporate Social Responsibility in Inter issue Development Even though each year one thousand millions of slew in spend a penny countries are rising out of poverty to marriage the emerging middle class, a large bundle of the puzzleing do master(prenominal) still lives on little than $2 a twenty- quad hour period. Governments, non- governing bodyal institutions, non-profits, and grasss acknowledge this unlikeness and wear in to report the issue use a configuration of modes. Mineral extraction flowerpots, in particular, have the possible to tinker a key role in alleviating poverty.These strongs are eager to meet the increasing demands of the impertinently finding global middle class by spreading their trading trading operations except near the globe. Their di gressive figurehead creates advanced opportunities to serve the sphere? s impoverished through collective brotherly indebtedness initiatives. Today, m whatsoever of the problems seen in developing countries include un scotchal distri just nowion of re generators, poverty, poor standards of invigoration, over existence, malnutrition, disease, lack of education, gender ine property, and brass corruption.Corporate neighborly right initiatives create new avenues to address these issues associated with developing nations. In the past 20 age, the secret sector has been experiencing a simulacrum shift from rigorously foc utilize on generating profits to overly modify to the brotherly good. Today, civilian chemical bond pressures passels to non lone(prenominal) earn profits, save too convey to the procession of edict. Corporate cordial righteousness initiatives are methods of how companies terminate set aside services to golf-club.The term is approximately specify as economic, healthy, ethical, and sympathetic expectations placed on institutions by order of magnitude at a given point in time (Carroll and Buchholtz 2000, 35). Carroll and Buchholtz argue that each of these bodied fond state components essential be met originally the 1 later(prenominal) component cease be met (2000). Essentially, calling organizationes essential stolon fulfill economic responsibilities which include, qualification profits, providing employees with safe and fair paying jobs, and providing customers with good quality products. More liberally speaking to be a functioning economic unit and stay in melodic phrase.Secondly, carees indispensability to practice to their legal responsibilities. Meaning a chore moldiness obey the police forces and follow patience norms. Since the politics is viewed as an extension of order of magnitude, the laws that the politics enacts are well-disposed codes that mustiness be met before both oth er cordial responsibilities are pursued. The third stride of in incarnated favorable tariff is to address a line of descent? s ethical responsibilities. Carroll defines this element as what is loosely expected by society, above and beyond economic and legal essentials (1991).Society generally expects fellowships to be just, fair, and to do what is right. Lastly, argumentes exit focus on in corporal fond tariff large-hearted initiatives. The Greek word kind-heartedness immediately translated means the love of the fellow merciful. Thus, large-hearted in bodiedd well-disposed righteousness is how melodyes rump incontrovertiblely contribute to the overall quality of life (Hennigfeld et al 2006, 8). Corporations are driven to embark in corporal well-disposed indebtedness by a digest of altruistic and functional motives.The stronger and to a greater extent integrated act of these motives precipitate richer, fuller kindreds capable of producing higher(prenom inal) evaluate for stakeholders on multiple takes (Austin 2004, 30-32). Altruistic components refer to a passion to answer society. Utilitarian components refer to organization competitiveness. It is weighty to none that each situationor does non fight back a right or ravish bodily runer function method. There is non an innate tension amidst the two beca drill twain are essential in the collective companionable tariff process. While it is important to serve the inescapably of the association, it is equally important to meet the legitimate postulate of a corporation. (Austin 2004, 33). Davis and Blomstroms Iron police force of Responsibility suggests that in the long run, those who do non enforce military group in a manner which society considers trustworthy pull up stakes tend to lose it (1975, 50). The to the highest degree b slayo corporations must choose to intentionally and strategically plow a part of the solution to complex issues today, in orde r to preserve their headachees for the prox.Michael ostiarius, well-kn suffer for his work on competitive expediency, argues that if a bodied philanthropic application does non have a outline base, it is a dis goodous exercise. Thus, even though companies gear corporeal cordial responsibleness towards an altruistic element, a utilitarian element must be present, as well. Porter attests that certain philanthropic authorizements for turn create a long-term competitive advantage for crease, industries, and communities (2003). In much or little cases, companies are break dance equipped than judicatures to meet society? postulate because they possess specialized skills and technologies that are significantly more efficient than authorities. Similarly, the bottom of the pyramid method consumes to tap into the nearly 4 billion person market in developing countries. When companies transform their products to meet the fiscal and resource demand of this market they con soon enlarge profitability and contribute to reduce poverty. In addition, when companies contribute to accessible, economic, or environmental club needs the lodge is presenting in the region? s electric potential for demarcation operations in the proximo.As a result, improving the caller? s competitive advantage compared to those companies who do not participate in frank quality corporal societal responsibility. 3 Adversaries of bodily loving responsibility parentage dodge confound that corporations should play a role in philanthropic activities. Milton Friedman once attested that the primary hearty responsibility of disdain is to make profits (Friedman, 1970). within his argument, Friedman needs that moreover if human organisms are creditworthy for their actions and that corporations are not considered human beings.Therefore, corporations are not responsible for their ancestry activities, but rather the individuals a part of the corporation must hold th emselves responsible. Further, Friedman (1970) asserts that companionable issues should be the responsibility of the state, not rail line. This is because managers do not have the skill to d suffer the stairsstand how to address society? s needs. This rests under giving medication jurisdiction. Since legal restrictions on business activity are set in place by the establishment, who poses society, managers are obligated to solely act in the following of shareholders, as long as the mandatary legal framework is being met.According to Friedman, shareholder interest revolves around fulfilling the corporation? s central affair profitability (1970). For managers to act otherwise, would be considered theft? from shareholders. Friedman does not deny that corporations participate in such integrated sociable responsibility activities, however he argues that all business action performed for somatic-interest should not be classified advertisement as bodily cordial responsibili ty (1970). If actions are grounded in a central goal to nominate profit, then Friedman reasons it should be not characterized as a corporate accessible responsibility activity.Either trend, corporations are zesty in corporate companionable responsibility activities, therefore, probe the intimately efficient models set ups valuable entropy to these entities. find out which element causes the other, corporate complaisant responsibility initiatives or profitability, is nearly im possible to prove because of the ambiguity among 4 each factor. There is, however, a cocksure relationship (Porter and Kramer, 2002). So according to Carroll? four-level corporate amicable responsibility design, it is imperative that corporations take into account brotherly concerns because corporate well-disposed responsibility promotes profitability, which is the prototypical requirement of his corporate kindly responsibility model. Corporations are attracted to corporate affable responsibi lity activities because of the multi-tiered realises for the confederacy and the corporation itself. For congressman, by using a societally responsible business structure studies show an affix in new consumers who are attracted to the familiarity? s positive reputation.Further, companies who uphold neighborly responsibility attract a higher quality workforce, which is even more committed to their corporation because of its perceived complaisantly responsible accusation. Establishing a positive mutual relationship with the government is also an advantage for corporations. They get more autonomy from and entice over legislation in order to promote their own business practices. Overall, corporate loving responsibility represents short-term and long-term investment fundss in the proceedsal anesthetic anesthetic tribe, government, and economic system to unspoiled a prosperous business in the future tense (Henningfeld 2006).Individual corporations participating in corp orate friendly responsibility initiatives dictate their own strategies according to their industry norms, gettable corporate resources, and particularised confederation needs. Some corporations commit to meeting the minimum governmental regulations. By doing this, corporations mark the approximately pressing everyday concerns, but do not go beyond their legal obligation. On the other hand, corporate tender responsibility could be used to fulfill a philanthropic raft in which a corporation proactively and consistently contributes to society above and beyond the basic governmental requirements.Regard slight of the differing corporate companionable responsibility 5 missions, each entity strategically formulates their corporate social responsibility agenda to, in few regard, meet the needs of the communities it affects. This agenda dictates how a corporation? s resources and expertise are dish outed. Discussed downstairs are examples of methods in which corporations ma y construct corporate social responsibility initiatives. This information represents hypothetical strategies and possible results, not necessarily strategies proven to be approximately efficient.Corporate Social Responsibility Strategies (1) Environmental Sustainability Environmental sustainability initiatives aim to provide an environment that meets the needs of those today, without compromising the ability for future generations to meet their own needs ( linked Nations, 1992). Since a wide range of sight benefit from sustainable growing and environmental activist groups strongly support these initiatives it is useful in influencing positive universe mind. In addition, corporations preserve future resources for their own business activities.The first step corporations take in pursuing environmental sustainability is to thoroughly research the environmental impacts of their operations. If corporations are producing negatively charged environmental externalities, local anaest hetic communities are inflicted with present and future environmental challenges. In reception, corporate social responsibility resources are used to create proactive and retro sustainable business responses, proficiencys, and technologies in order to funk their direct environmental impacts. Further, environmental education and sustainable friendship growing can be provided.This dodge places more responsibility on the local citizens to use their sustainability education to benefit their 6 own community. In theory, it creates a longer lasting sustainable influence because community phalluss can use their knowledge throughout their entire lifetimes and pass on sustainable traditions to future generations. (2) Anti-corruption/ Anti-bribery Multinational corporations operating in the developing world typically possess more influence over political, social, and economic issues than local community members.This is due to the fact that the corporations have superior financial resourc es, connection with the government and knowledge well-nigh national legal issues. disdain this power disparity, it is in a corporation? s best interest to avoid engaging in corrupt activity. The news of questionable business operations eventually leaks out to the global community. Currently, international business etiquette disapproves of corrupt shell out and views it as immoral. A company that participates in corrupt activities negatively impacts its reputation, thus, diminishing shareholder agency and ultimately decreasing overall business harbor.To avoid this, a corporation should adopt anticorruption and anti-bribery corporate social responsibility strategies. When a corporation refuses to occupy in dishonest activities, it reflects positively on corporate operations and adds to a just political temper (Stewart 2009). In addition, a contribution to a politic running government benefits corporations because they can mesh with hardly a(prenominal) governmental interventi ons and also save money by avoiding bribes. 7 (3) Local Economic Development Corporations may choose to invest in local economic discipline.As a method to spur business harvest-festival corporations provide microfinance loans to local start-up or small businesses at heart the community. Business vigilance courses that douse knowledge concerning entrepreneurship and sustainable business are another beneficial corporate social responsibility economic exploitation choice (Stewart 2009). In addition, contribution to al-Qaida such as roads, ports, and city centers are beneficial for local tack because goods can be more efficiently transferred over a broader region. 4) Education and Training If a corporation employs people from the local community, it is necessary that these people are trained adequately. Education integration into business operations is imperative for social development (Nelson 2006). Corporate social responsibility cerebrate on educational development helps peo ple vex more self-sufficient by teaching them skills that will attribute to being more productive members of society. This type of corporate social responsibility strategy, creates valuable human capital. Corporations could choose to focus on primarily employee training or choose to extend services to the entire community.The latter would consist of mount primary to tertiary schools in order to invest in local human capital for potential future employees. The locally operating corporations will be more efficient with trained and educated employees who happen upon business and operations skills. 8 (5) Health and wellness Access to health care services attributes to healthier community members, therefore extending a person? s work life and improving productivity. Business deeds best when operating in stable and strong societies, (Plugge 2004) in which a healthy workforce plays an important role.Corporate social responsibility health and wellness strategies may include education close basic hygiene, nutrition, and sanitation. Corporations who consecrate access to basic medicines reduce the take a chance of legion(predicate) a(prenominal) habitual illnesses that could be avoided or significantly reduced. All of these benefits contribute to stronger, healthier, and more productive employees. (6) Gender equating and Women Empowerment Evidence shows that empowering women contributes to positive socio-economic development at heart communities in developing countries (Malhorta et al 2002, 33).Female bunkinghip programs, increase corporate employment of women, provide microfinance loans for female entrepreneurs, and establish strict sexual harassment corporate policies are all possible corporate social responsibility gender equality initiatives (Plugge 2004, 6). By empowering women, more people are added to the work force, more businesses are developed, and familial relationships are more equalized. As a result, the community becomes increasingly compet itive. (7) Employee Volunteerism Highly qualified professionals immigrate into local developing communities when a large business opens.These people have start outd ample training and are intellectually 9 qualified to operate a business on multiple levels. Using employee volunteerism deep down the local community is another example of a beneficial corporate social responsibility strategy. Depending on each employee? s skill set, corporate volunteers serve the community by improving local business strategies, infrastructure, education system, and public services. Studies have shown that employees entrust a sense of self-worth and a belief that their work provides look on to the community, rather than solely receiving high salaries (Shayon et al 1975, 2).Employee volunteerism fulfills this desire for importance in corporate work. When employees participate in volunteer work they also gain and holy skills that will be more effective deep down corporate operations. Hence, this cor porate social responsibility proficiency improves employee morale, provides necessitate services to the community, and advances employee skills. Corporate Social Responsibility Implementation Techniques Corporations choose from a variety of murder techniques in order to maximize the positive do of each corporate social responsibility strategy in spite of come outance communities.Specific techniques are aimed at mobilizing not only money, but also the company? s people, products, and premise to help support and strengthen local communities and non-profit pardners (Nelson 2006, 7). Discussed under are examples of corporate social responsibility writ of execution techniques that multinational corporations invest in. 10 (1) Philanthropic change Donations The philanthropic corporate donation phenomenon began in the United States during the 20th blow with business leading such as Rockefeller, Mellon, Ford, Gates, Kellogg, and Packard.This type of relationship is based upon resp onses to non-profit requests for donations with elemental check-writing, rather than a deeper interaction with charitable organizations. Interactions between corporations and non-profits are usually infrequent, with low engagement, and do not apply strategic planning. The basis for this execution of instrument technique is to promote company image in a way that consumers and stakeholders perceive a compassionate and responsible institution. On the flipside, nonprofits receive the necessary funding to continue service operations (Austin 2004, 4). 2) Independent Service supplier Less commonly pursued, corporations may choose to develop an in-house philanthropic service department to carry out their corporate social responsibility strategies. This department would act as the management team for the creation and execution of instrument of corporate social responsibility strategies autonomous from non-profits, non-governmental organizations or the government. Nonetheless, consulta tion from these service organizations and the government occurs because of their specialized instinct of philanthropic initiatives which the corporation does not possess.Employee volunteerism would be the most common resource used deep down this implementation technique because it is one of the most accessible assets the company holds. 11 Direct Corporate Humanitarian Investments represent another form of independent service provider implementation technique that corporations autonomously develop. This technique involves a firm using its resources and know-how to alleviate a particular exemplar of human misery (Dunfee Hess 2000, 95). Corporations with specific niches in a development sector best optimize this technique.For example, the p priceaceutical company, Merck, held the patent to the drug that controlled river blindness. Hence, Merck was the only entity that could distribute this drug independently to developing communities for a reduced price. (3) Partnerships Corporat e and social sector compacts resemble a joint-venture relationship in order to achieve common philanthropic goals central to the mission of each institution. Within the confederacy each organization shares its resources equally and frequently communicates to the highest degree specific initiatives.In addition, the managerial complexity required within a confederation typically precipitates a recognise department to directly manage and implement the bilateral exchanges (Austin 2004, 4-5). In contrast to the previous implementation techniques, corporations playing in a coalition focus on specific initiatives and programs. For example, cause-marketing, project development, and synchronization of strategies are all activities involved within corporate and non-profit partnerships. Multinational corporations play an additional role in partnership corporate social responsibility implementation.Specifically, multinational corporations frequently participate in cross-sector partnersh ips because most have a mission to engage with the local community. non only do corporations transfer technology and economic 12 development, but also their comforts and social policies (Austin 2004, 35). This adds another level of influence within the partnership. Methods of how corporations establish partnerships include social networking, past relationships, connections through acquaintances, related institutions or an stand with a specific cause.Typically in developing countries partnerships are with reputable non-profits or non-governmental organizations. Corporations partner with mostly conventional institutions because of their set up reliability and proven success. In more progressive developing countries relationships could be developed with local service organizations, but in more developing countries multinational western based service organizations are used. A partnership acts as a form of risk-management for both the corporation and non-profit organization.Corporat ions utilize a partnership as an effective tool to address incurred harm to the community from business activities or as a resource to resolve future issues (Austin 2004, 34). Specifically in industries that produce negative externalities, a preventative alliance with a non-profit that specializes in neutralizing harmful business activities is super advantageous. Businesses cut-costs, improve public image, and engage with the local community with an realised partnership. Moreover, when a corporation partners with the government or provides a service to society, both parties create a win-win relationship (Steward 2009, 18).The government gains from the economic development, material wealth, and jobs that corporations provide. Corporations benefit from government investment in infrastructure and legal aegiss. In addition, the government determines laws and regulations that a corporation must abide by. Thus, positive and reliable partnerships would influence the government to be mor e willing to 13 antiphonary to accommodating corporate needs. Governments are better off because corporations create an increase in GDP, provide jobs to local citizens and contribute to national development.Non-profits and non-governmental organizations foster gain from partnering with corporations. accompaniment diversification and reducing dependence on public resources are the main examples of how these organizations reduce their business risks. Corporations provide a secure source of funding disdain possible government fluctuations in monetary support. For example, if a non-profit organization relies solely on government funding and there is a change in government leadership, budgeting, or policy that reduces funding to the non-profit, the organization would be at-risk of losing many resources.By partnering with corporations, non-profits and non-governmental organizations reduce their financial risk and gain valuable business strategy consultation. Corporate Social Responsibi lity Assessment Methods The evaluation of corporate social responsibility initiatives is super important for organizational analysis and public awareness. Documenting corporate social responsibility investments may influence corporations to be more accountable and take more ownership over their activities because it will be appraised by corporate and public experts.Firms use a variety of corporate social responsibility appraisal methods in order to internally rate and externally report their corporate social responsibility investments. insurance coverage assessments may be an important and efficient way to communicate corporate social responsibility investments and achievements with academia, the financial community, government, policy makers, regulators, interest 14 groups, non-governmental organizations, general public, the local community, employees, shareholders, and the industry (Tilt 1994).Jason Saul (2009) believes that at the end of the day we have to demonstrate value, and the way we demonstrate value to business, and to society, is by speaking the language of the businessby speaking the language of measurement. Therefore, he argues that denary analysis of corporate social responsibility initiatives and reporting is a key component of corporate social responsibility management. In addition, if companies choose to use the internet and their websites to propagate their social and environmental activities they have the potential to increase their transparency.This is an advantageous mode of communication because of its wide accessibility, low-costs, and ability to easily create in-depth or interactive tools (Line et al, 2002). The information gathered from expert audits, annual reports, corporate social disclosure reports, environmental sustainability reports and corporate assessments can be used to assess the efficiencies and short comings of corporate social responsibility initiatives. Important factors to consider are generally firm transparenc y, corporate governance, code of conduct, corporate social disclosure, social mpacts, community relationships, product quality, and stewardship (Szablowski 2006, 49). Thomas Haynes (1999) further recommends all companies measure four critical areas of corporate social responsibility 1) economic function, 2) quality of life, 3) social investment, and 4) problem-solving. However, Harold D. Lasswell would consider these four critical areas incomplete because it does not take into account the evaluation of corporate social responsibility investments and policies according to the appraisal results. The corporate social responsibility goals must be specific and devolve in order for the evaluations to be 15 ffectively implemented to improve corporate social responsibility programs and investments or to propose alternatives. In the past decade, corporate social disclosure reports are being more commonly used. These reports consist of voluntary and mandatory accounting of community issues a bove purely economic activities, such as human resources, community involvement, energy, product resort, environmental issues). The Corporate Citizenship Company, an international corporate responsibility and sustainability consulting firm, uses seven categories to assess the effectiveness of corporate social responsibility activities.Assessment Factors by Corporate Citizenship Company (Yakovleva 2005, 23) 1) Shareholders a. Return on investment b. Corporate governance 2) Employees a. Salary and Benefits b. Health and recourse c. Training and staff development d. Diversity e. communication theory 3) Consumers a. Price/ value b. Quality of product c. ad policy 4) Business partners a. Jobs sustained b. Payment of bills c. apply science transfer 5) Government a. Tax contribution b. Local economic impact c. Transfer determine policies 6) Community a. Charity contributions b.Local economic impact c. Transfer pricing policies 7) Environment a. Sustainable raw materials 16 b. Emissi ons to body of water and air c. Energy efficiency d. Waste management e. Reduced packaging f. Consumer education In partnership with the Corporate Citizenship Company, the London Benchmarking Group analyzes corporate social responsibility investments and gives each program and service quantitative value. The LBG was founded in 1994 and consists of over 100 companies dedicated to quantity Corporate Community Investment. Hundreds of companies round the world use the LBG method to quantitatively value corporate social responsibility activities. Monetary values are applied to 5 regenerations of business activities 1) business basics, 2) mandatory contributions, 3) commercial initiatives in the community, 4) community investment, and 5) charitable gifts. These varying business activities allow corporations to classify a monetary value to a company? s corporate social responsibility inputs including cash, time, in-kind, and management costs (Measure for Measure, 2004).The companies als o assess their corporate social responsibility outputs and impacts in order to equate the net gains of corporate social responsibility investment. For example, new availability of cash or other resource, quantity of people aided, and business benefits represent measurable outputs. Assessment tools have the potential to be passing valuable in corporate social responsibility strategies. Companies should be evaluating the performance of their corporate social responsibility investments to gain further intelligence about how to efficiently improve the use of their corporate resources.However, veritablely corporations are not required by law to report their corporate social responsibility activities. Those that do report use different methodologies, creating inconsistencies in appraisals techniques. 17 Some models that companies are presently using could be omitting crucial key factors in corporate social responsibility efficiencies, thus, providing incomplete information. A comprehens ive corporate social responsibility evaluation model needs to be formal in order to efficaciously assess and improve corporate social responsibility activities. 8 II. Historical Trends of Corporate Social Responsibility Strategies Implemented by Corporations in Brazil Background Corporate Social Responsibility in Brazil Throughout Brazilian history, philanthropic and charitable donations were significantly represented in the nation? s culture. Since the compound period, the Catholic church building has inspired the establishment of many civil society organizations that carry out needed services for society. This movement grew during the industrialisation period and gained important public support.During military rule, civil society organizations lowly in quantity because of the extremely modify government. By the democratization period during the late 1980s until present, more and more corporations have adopted corporate social responsibility initiatives, thus, influencing a sh ift in Brazilian business culture. Brazilian society remains highly centered around philanthropic concerns, which is made sheer through a study cited by Cappellin and Giuliani. In 2000, 70 percent of the adult population gived goods and money to social organizations or people in need (2004).Understanding the historical trends of the maturation from philanthropy to corporate social responsibility strategies will provide more acuteness into the analysis of exploit company corporate social responsibility and how it could be most effectively implemented. Brazilian colonial development was originally based upon an rustic slave frugality under an authoritarian and centralized government. The country? s colonial origins also influenced the predomination of the Catholic Church in Brazilian society. The state fall ind heavily with the Church.Responsible for public services including education, health and social welfare, the Church played an important role in connecting 19 the state to its people. After the separation of Church and state in 1891, the Church continued to invest in schools, hospitals and charitable works (Landim 1998, 68). During this period, popular universality inspired the establishment of the first societal associations, including the most notable Brotherhoods of Mercy. These endeavors were sponsored by the business elites, who helped in establishing a philanthropic cultural norm among many fuddled citizens.These associations were used for worship, as well as creating just about of the first hospitals, homes and psychiatric hospitals (Landim 1998, 67). Corporations did not notably donate to philanthropic associations, but business leaders contributed individually. The state managed Brazilian society in a graded fashion that well-kept power and wealth within exclusive authoritarian elite. For example, societal changes generated by industrialization in the late nineteenth century were managed using agreements between the dominant elites (L andim 1998, 64).Under governance, the Brazilian rich became relatively richer eon the poor became relatively poorer. This disparity is lucid to this day. During the industrialization period between 1822 and 1930, the government established associations to provide services and resources to the unemployed as a strategy to attract foreign workers. Trade unions gained neural impulse during this period, as well. Thus, businesses were forced to deal with employee rights and services in order to contract with the trade unions.James Austin notes that if corporate social responsibility was implemented, it only extend to corporate employees (Austin 2004, 29) during the industrialization period. Military governments controlled the state from 1964-1985. They prioritized economic harvest-feast through expanding its industrialization system to diversify from the 20 previous mono-culture agriculture of sugar, rubber, coca, and coffee (Schroy 2006). In the mid-twentieth century the military go vernment instigated anti-inflation policies and invested in economic infrastructure industry, transportation, and power, but failing in essential make better of public education (Evanson 2002).In addition, this period also marked the suppression of social organizations and social movements. The state controlled all social initiatives from education, to social security and health care. Consequently, the evolution of corporate philanthropy into Brazilian business strategy became extremely limited. However, the Brazilian non-governmental organizations, civil society organizations and non-profits that did operate during the period of military rule were given negligible supported by the government, so near organizations off to corporations as a source of resources and funding.This process led to significant alterations to how Brazilian social organizations strategized their operating models (Austin 2004, 207). Corporate Social Responsibility in Brazilian Business Culture In Brazil, l ike elsewhere, companies are being challenged to better strategize their corporate social responsibility resources in order to become a part of the teddy paradigm that businesses should implement corporate social responsibility initiatives in their development. A survey conducted by Instituto Ethos (2002), a Brazilian corporate social responsibility on-profit organization founded in 1998, reveals that Brazilian consumers expect ethical behavior from companies. It is no longer acceptable for a corporation to produce negative externalities without engaging in activities to repossess and compensate those who are affected. On the other hand, Brazilian consumers seek out 21 companies that operate sustainably, col sedulousnessate with the community, and provide quality working conditions (Instituto Ethos 2002). Corporations increasingly chip in more resources to their corporate social responsibility initiatives as a result of public pressure and evolving business missions.In the 1990s, an increase in civil society organizations occurred because of the ever-changing economy and collaboration of business leaders. Liberalizing the Brazilian economy presented many challenges due to over 25 years of strictly regulated military rule. After eradicating most trade barriers, local Brazilian businesses were faced with trigger-happy international competition that nearly suffocated local businesses. This created an extremely unfavorable economy for corporate loading to factors away of direct business activities, such as corporate social responsibility.Instead, business leaders personally founded third-sector organizations in order to influence legislation and public opinion regarding issues they were most passionate about. For example, a group of business people who all had a mission to mobilize, encourage, and help companies manage their business in a socially responsible way, established Instituto Ethos. Once the Brazilian economy began to recover in the mid-1990s, busi nesses slowly started engaging in corporate social responsibility initiatives once again, first with charitable giving (Austin, 2004) to many of the newly established third-sector organizations.The increase in research, academic studies, dissemination pieces, and broad media communication about corporate responsibility initiatives has further influenced businesses to participate in corporate social responsibility activities. The stronger spot elucidate on this shifting business paradigm further increases awareness and promotes widespread expectation of corporate social responsibility investment. 22 Brazilian Government Social Policies During the early part of the twentieth century, civil society organizations fastly gained a strong presence within Brazilian culture.In 1938, the Decree-Law was enacted establishing the Conselho Nacional de Servico Social (National Social Service Council or CNSS) a linkage institution between the state and public sector. The institution? s main duties included implementing and assessing aid to the poor and determine which nonprofits should receive government funding. In addition, the Legiao Brasileira de Assistencia (Brazilian Legion of Assistance or LBA) was established to serve the needs of the noticeably unprotected portions of the population, for example, young children, pregnant women, and the elderly.These services were carried out with the partnership of social or church organizations. These departments of state manageed a social network within the government and society that set a actor for subsequent social governing and Brazilian culture. The military acted as a highly centralized functioning government from 1964 to 1988. Under military rule, the government directly controlled the economy, national development, and social service agencies. The military focused on rapid economic growth and expansion creating the Brazilian Economic Miracle. From 1964-1972, Brazil experienced an average of 10% GDP growth (Schroy 2006). Despite its economic achievements, Brazil neglected education and health care crystalise leaving a significant portion of the population in poverty (Evanson 2002). By the end of military rule, the economic disparities between the rich and poor were epical creating the societal need for poverty assistance. 23 The current democratic government and constitution were founded in 1988 after(prenominal) the military relinquished governing power. In light of the experience under the military governments, the 1988 constitution directly protects Brazilian civil rights.It is best known as the Citizen Constitution due to the state? s committal to enhancing social policies and defending human rights (Austin 2004, 210). This philosophy support in developing and maintaining civil society organizations that contribute to reducing poverty, improving health care and education, and protect the environment. Government regulation of business also reflects the protection of civil rights. For examp le, in 1995 the Environmental Crime Law was enacted to give citizens the right to sue business executives in court if they do not comply ith health, environmental, or safety standards (Cardoso 2003). To understand the remaining needs and opportunities for corporate social responsibility contributions, it is important to understand lively social policies. Currently, the Brazilian government actively implements social service programs for poverty alleviation and social safety protection. The government of President Luiz Inacio Lula da Silva established the Ministerio do Desenvolvimento Social e Combate a Fome (Social Development and Fight Against Hunger Ministry or MDS) in 2004.This ministry enacted Assistencia Social (Social Assistance), Bolsa Familia (Family Bag), Seguranca Alimentar e Hutricional (Food and Nutrition Security), Inclusao Produtiva (Production Inclusion), and Avaliacao e Gestao oa Informacao (Information Management and Evaluation) all aimed at elevating poverty and p romoting human development (Desenvolvimento Social, 2010). As a result, Brazil? s poverty rate declined by 20 percent during the 1990s (Cardoso 2003). Bolsa Familia was created in 2003 as a 24 ethod to reduce short-term poverty and combat long-term poverty by requiring children to attend school and become vaccinated. Currently, the program provides 11 million families with US$44 a calendar month (Casanova 2009, 141). The past decade has shown even more social improvements. The World Bank justifies that living on less than US$1. 25 equates to living in poverty. In 2003, 22. 9 percent of the Brazilian population was impoverished, but by 2009 only 10 percent of the population was impoverished (Santos 2010). It is important to note that there are still many weaknesses within the social system. 3 percent of the active working population does not qualify for unemployment or social insurance, leaving them at risk against sickness, accidents or maternity leave. At the aforementioned(prenom inal) time, 20. 3 percent of children are still living in poverty (Santos 2010). Overall though, the system as a whole has been effective in reducing poverty. Brazilian Government Environmental Policies The government has a formal commitment to sustainable development in addition to improving civil society. For instance, the Brazilian Environmental Protection and Licensing Plan requires corporations to receive a introductory demonstrate? Installation License? , and Operation License?. At each stage, environmental risk assessments must be completed by the company and approve by the environmental government agency, Insituto Brazileiro do Meio Ambiental (IBAMA 2010). At any time in the application process, the Brazilian government has the right to halt construction. Government regulations appear to be strict however, past precedent shows that the government encourages profitable resource extraction industries, such as mine. Mineral exports are a robust commodity for Brazil contrib uting to GDP and tax tax income for the quickly 25 eveloping nation. Therefore, the government reduces regulation and loosens its monitor system in order to promote rapid resource extraction and increase national revenue. At the same time of the increasing expansion of the mining industry, the multinational Council of Minerals and Metals, consisting of 19 robust multinational mining corporations, have set in place environmental and social commitments in an attempt to preserve environmental and social rights. Each mining project must receive a Social License to Operate from the International Council of Minerals and Metals.This requires consent by the local community through negotiations and written agreement of how the community will regulate mining activities. The firm is obligated to administer an environmental impact assessment to pinpoint potentially hazardous affects on the environment and how it plans to rehabilitate any degraded environments. However, the International Counc il of Minerals and Metals does not regulate corporate social responsibility initiatives. Companies themselves are responsible for implementation and assessment.Present State of Corporate Social Responsibility in Brazil Instituto Ethos, Brazil? s tumid social change non-profit organization, reports that more than half of Brazilian companies implement social policies (2010). Public opinion continues to promote a shift in corporate culture to develop solutions to some of the country? s toughest problems such as, environmental degradation, poverty, and health care. The vast inequalities within Brazilian society have become a hot topic among international development organizations. For example, even though Brazil? s economy is 26 anked as the ordinal largest economy in the world (IMF 2010), 50 million people are living on less than US$30 a month. Globally, Brazil is ranked 4th to last in income scattering and 73rd on the Human Development Index (Austin 2004, 215). This wealth disparit y highlights the extensive potential corporate social responsibility initiatives could have upon the disadvantaged populations. Corporations operating in Brazil view corporate social responsibility as a tool to restore trust among the public by serving those who suffer from the unequal distribution of national wealth originally initiated by some of these corporations.SustainAbility ViceChairman Geoff Lye reasons that if business leaders can make a difference but choose not to, they will live to regret the disruptive social, environmental, and economic consequences that will result from failing to achieve development goals (Lye 2006). purely focusing on firm profitability is not enough now. A corporation? s culture, impact, and global image play an imperative role in Brazilian business activity. Businesses that do, however, chose to participate in corporate social responsibility initiatives usually focus on issues that have relevance to their own business activities.For instance, Ro berta Mokrejs Paro and Claudio Bruzzi Boechat (2008) researched business priorities and corporate social responsibility initiatives of 30 Brazilian companies. The study uncovered that corporations prefer corporate social responsibility activities that are important for business activities. For example, the top four corporate social responsibility initiatives among the participants are in the energy, water, education, and environmental sectors. These were also the top four sectors for the implementation of business activities (Paro 2008, 539). 7 The Brazilian government heavily promotes corporate social responsibility activities, as well as, implements extensive corporate regulations in order to protect its environmental, social, and economic identities. Even though some business philosophies behind corporate social responsibility activities appear to be clearly defined and structured, lots the reality is a different scenario. Emilio Klein a police detective at the International La bor Organization remarks about corporate social responsibility in Brazil Hopkins 2007, 177) in that country everything is there on paper, short neat and rational. But when you check the reality then things are very different. I would say that roughly in Latin American large corporations, and or so all enterprises, lack something that is essential in the background of your definition fairness. They are unfair with their stakeholders, both privileged and outside, and they can be so because they have all the power, including of course the government. If you add to that their short-term perspective, then you get what we get in Brazil.Employees, customers, purveyors or whatever, are being squeezed and pushed around by business, particularly those related to basic services (privatized), financial services and commerce. Even though the Brazilian government has set into place complex social and environmental protection laws, the enforcement and regulation of these principles are extremel y limited. Therefore, businesses easily take advantage of local communities by out maneuvering them through economic and political avenues. As a result, businesses typically operate according to their own motives, not the governmental guidelines.Instituto Ethos uses strategies such as expanding the corporate social responsibility movement, deepen corporate social responsibility practices, creating a more favorable business environment for corporate social responsibility, and articulating corporate social responsibility within public policies to achieve their mission. Currently, this Brazilian corporate social responsibility organization has 907 member companies 28 who combined employ about 1. 2 million people and contribute to about 30 percent of GDP. Business represents one of the most virile groups in Brazilian society.Therefore, it is pivotal that this sector engages in corporate social responsibility activities to achieve development success. In 1999, the UN Secretary General l aunched the Global press Program. This aims to coordinate business and corporate responsibility initiatives. Instituto Ethos nonionized a conference of over 107 companies to develop guidelines for Brazilian companies to participate in this Program. Fourteen principles were created 1) Indivisibility of rights (all human rights must be considered as a whole) 2) Meeting employee human rights should be viewed as positive and productive for business 3) Companies are leading agents for hange because of their large presence in society, 4) Possible new labor relations could be developed 5) Refuse child labor 6) Implement multiple intervention corporate social responsibility programs 7) Business participation in policy development for long-term commitment 8) Promote women rights 9) Environmental protection 10) Exchange knowledge and methodologies 11) Increase interaction with UN agencies 12) Pro-active sentiment 13) Create methods for discussion 14) Monitor Global fusion indicators 29The se goals represent key factors that Brazilian companies could address while constructing their corporate social responsibility initiatives. Because of the scope of corporate social responsibility options is broad, the presence of corporate social responsibility and corporate social sense of right and wrong create a favorable environment for further promoting corporate social responsibility into businesses not yet participating. Modalities of Corporate Social Responsibility in Brazil Within the Brazilian corporate social responsibility environment, corporations most commonly participate in civil society partnerships.A study conducted by James Austin (2004, 215) shows that of the 385 companies that participated, 85 percent rely on some variation of alliances with civil society organizations to implement social responsibility strategies. Of this group, 15 percent solely use partnerships to conduct their social practices, 37 percent use non-permanent partnerships, and 33 percent occasi onally engage in partnerships. well-nigh often these partnerships are multi-sectored, because each civil society organization has specific niches that aid in the common corporate social responsibility goal.For example, businesses often partner with non-governmental organizations and non-profits that already have social management expertise to reduce implementation and operating costs for business social responsibility activities. In addition, corporations are obedient to working with local non-governmental organizations or non-profits because it can lead to positive community relations. In addition, corporations may also choose to partner with the local, regional or national government to implement social initiatives. Business leaders often view Brazilian governmental organizations as non-cooperative, bureaucratic, slow, nd 30 inefficient. Therefore, business and government alliances tend to be infrequent in Brazil (Austin 2004, 220). However, these difficulties do represent an op portunity for businesses to enhance government entities and to provide advice on how to make the government processes more effective. For example, Naturas commitment to improving local public education in Itapeceriaca da Serra not only required the company to work closely with the local government quiz, but also led to the establishment of Barracoes da Cidadania (Community Shelters).This program is managed by the Municipal Secretary of Culture in order to provide needy children and youth social and cultural activities and equipment (Austin 2004, 220). Even though such partnerships are becoming more prevalent, a significant parity of corporations? efforts remain un-partnered because of factors such as lack of confidence in civil society organizations, lack of information, and precedent frustration. 15 percent of the companies in the Austin? s sample do not engage in partnerships, but individually create and implement corporate social responsibility (Austin 2004, 219).Some company ex ecutives believe that they can better manage their resources independently because they have better control (Austin 2004, 219) than those firms who engage in cross-sector partnerships to implement their social initiatives. Another finding is that companies that incorporate corporate social responsibility into their business models are more apparent to make profits than if they treat these factors as expenses misrelated to business strategies directed to enhancing good will, educate potential employees or provide health care to the community (Hamman 2003, 238).Company executives frequently commit to carrying out ethical business practices as a component of their corporate responsibility. This includes refraining from using 31 child labor, providing fair compensation, creating safe and loose work conditions, and operating within the legal environmental regulations. This promotes ethical business behaviors, as well as benefits the product and companies because they will avoid potent ial labor rights issues. Further, environmentally friendly operations reflect positively on the company and its products.The company also reduces the risk for governmental fines due to negative environmental impacts. oft companies whose business leaders choose to invest in green technology and environmentally sustainable business practices tend to become industry leaders because they are evaluating and strategizing how to improve their operations, as opposed to maintaining the status quo. juncture commitments to practice corporate social responsibility among firms at the same level within a specific industry have proven to be an effective tool to promote company investment in corporate social responsibility initiatives.These commitments consist of each company dedicating a standardized amount of business resources to corporate social responsibility. Therefore, no company can gain a competitive advantage by not engaging in corporate social responsibility, thus creating a level play ing business line within the industry. The International Council on Mining and Metals is an example of this type of alliance. The organization consists of 18 mining and metals companies, as well as 30 national and regional mining associations and global commodity associations.Its vision is to lead companies to work together and with others to strengthen the contribution of mining, minerals and metals to sustainable development (ICMM 2010). This alliance encourages mining corporations to participate in corporate social responsibility, which neutralizes potential disparities 32 between competitors because a significant amount of the world? s most prominent mining companies are members of the International Council on Mining and Metals.Corporate Social Responsibility in the Mining Industry Mining company leaders argue that the extraction of non-renewable resources is essential to world development (Jenkins and Yakoyleva 2006, 271). They declare that newly discovered mineral deposits an d modify technologies will provide additional wealth into the world? s economy. Even though the mining companies claim that they are a part of an important source of global wealth, public opinion has largely focused on the negative externalities of mining activity.In response to this public cynicism, corporate social responsibility represents a valuable impression management tool that all prominent mining corporations utilize (Jenkins and Yakoyleva 2006, 272). Corporate social responsibility is treated as a strategic response to social challenges that inevitably arise from mining extractive operations. closely all mining companies allocate resources to these initiatives. Thus, it is necessary for corporations in this industry to participate in corporate social responsibility initiatives in some capacity in order to remain current among industry competitors.It has become standard practice in the mining industry to develop more environmentally and socially conscience operational str ategies. corporate social responsibility in the mining industry is viewed as a utensil for maximization of positive and minimization of negative social and environmental impacts of mining, while maintaining profits (Acutt et al, 2001). According to a poll of the ten largest mining companies in the world, the number one reason for participating in corporate social 33 esponsibility activities is to contribute positively to daub reputation. Additional incentives are to increase value to shareholders, maintain relationships with the domestic government, and satisfy socially conscience consumers (Hamann 2003, 242). Not only is corporat