Evaluate the Recent Trends on the Ethical Considerations and Social Responsibilities of Multi-National Companies.

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Evaluate the recent trends on the ethical considerations and social responsibilities of multi-national companies.

Corporate Social Responsibility (CSR) is a concept whereby organizations consider the wellbeing of the public by taking responsibility for the effect of their actions on all stakeholders; customers, employees, shareholders, communities and the environment in every aspect of their operations. This responsibility is seen to extend beyond the statutory obligation to comply with legislation and sees organizations willingly undertaking additional steps to improve the quality of life for employees and their families as well as for the local community and society at large.

The role of CSR has become dramatically increased over a number of years due to an influx of social awareness by the general pubic and also by government. The demand for more ethical business processes and actions, known as ethicism, is increasing. Simultaneously, pressure is applied on industry to improve business ethics through new public initiatives and laws. The recent trend has seen an increase in the number of CSR reports being submitted from 2002 – 2005. In 2005 52% of G250 and 22% of N100 companies issued reports.[1]

The practice of CSR is area under much discussion and criticism. Some people argue that there is a strong business case for CSR, in that corporations gain an advantage in multiple ways by operating with a broader perspective than just making an immediate, short-term profit. However critics argue that CSR can distract from the basic economic function of businesses, others dispute that it is nothing more than superficial window-dressing. One of the most major recent trends in CSR is the move towards Fairtrade. The Fairtrade Foundation was established in 1992 by CAFOD, Christian Aid, Oxfam, Traidcraft and the World Development Movement, The Foundation’s aims to work with businesses, community groups and individuals to improve the trading position of producer organisations in the South and to deliver sustainable livelihoods for farmers, workers and their communities. Companies across the world have seen the need to move into the Fairtrade market. Since the launch of Fairtrade there has been a dramatic increase in sales of their products. Since 1998 the estimated sales of Fairtrade products in the UK alone has risen from £16.7 million to £493 million.[2] Muti-national companies have seen the rapid growth and more and more companies are signing up to sell registered Fairtrade products to show the ethical consideration to the producers in developing nations.

Costa Coffee who operate mainly in the UK with over 600 stores but also through Europe and Asia, have set up the Costa Foundation with the goal to “give something back to the communities within the countries from which we source our coffee beans.”[3] Each year the Foundation implement programmes to improve the social and economic welfare of the countries that source their products.

It is not just the Multi-national companies in the food and drink market who have adopted into the trend of becoming more socially responsible. HSBC one of the worlds largest banks adopted a ‘go carbon neutral’ campaign in 2005[4]. Its aim was to plant trees, reduce energy use, buy green electricity and trade carbon credits to cut carbon dioxode flows. This change came at a small cost to the company an estimated £3.6 million would be spent in the first year of the change which at the time equated to a 0.004% of the bank's market value of £99,331 million HSBC’s move towards becoming more carbon neutral was a result of their high carbon omissions. The chief executive Stephen Green said: "In 2003, HSBC's CO2 emissions...were more than 550,000 tonnes. We need to act now."[5] HSBC have an estimate of over £100 million[6] to date, of investments going towards activities designed to protect the environment.

In recent years it has become more and more apparent for multi national firms to show...
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