Learning outcomes assessed:
- Explain the principles and practices within Sustainability and Social Responsibility.
- Apply the principles and practices to real life business scenarios
- Analyse sustainable practices and levels of social responsibility.
- Critique sustainable practices and levels of social responsibility within an existing business or entrepreneurialventure.
The Importance of Sustainable Enterprises
A sustainable enterprise refers to the business that strives to minimise the negative impact of its operations over environment, local community and economy. A sustainable corporate entity makes continuous efforts to meet triple bottom line approach, with a constant commitment towards protection and conservation of natural environment. Triple bottom line is a concept which measures an organisation’s performance on three aspects, people, planet and profit (Crane, 2016).
Here people refer to an organisation’s human capital and local community in which it operates, a sustainable enterprise frames and follows just and fair policies for the benefit of its work force as well as it works for the development of surrounding community. For planet a TBL organisation adopts such practices which are environmental friendly and lastly according to TBL concept, profit here refers to economic benefits provided by an organisation to the society in which it operates or the positive contribution made by the organisation to the economy (Milney and Grey, 2013).
Corporate Social Responsibility refers to the responsibility of a corporate to conduct all its operations ethically while considering its impact over society and environment. Business takes a lot of resources from the society in order to produce goods or services for profit so it becomes moral obligation of an organisation to pay back to the society in the form of good deeds for the development of society (Bluelens, Rossim and fassin, 2011).
With growing awareness towards these concepts a lot of companies have been taking steps towards becoming a more ideal corporate citizen. One such organisation is Nokia. Headquartered in Espoo, Finland, Nokia is a consumer electronics, telecommunication and networking equipment company working towards various causes such as education, re-employment, livelihood, health, promotion of human rights etc.
Following report is an effort to highlight corporate social responsibility and sustainability practises adopted by Nokia, and to suggest a few measures that Nokia can adopt for improvement of their CSR and sustainability practices.
Kotler and lee (2011) defined CSR as a commitment made by business organisations for the welfare of the community by adopting ideal business practices of voluntary nature as well contributing resources available at the disposal of the organisation for the betterment of society.
Later, Hopkins (2012) defined CSR as a responsibility of a business organisation to treat its stakeholders ethically and in a manner which is considered responsible by the society. Further he also argues that stakeholders exist both in internal as well as external environment of the organisation. It is the social responsibility of the business to help in development and welfare of its stakeholders while being economically profitable.
Corporate Social Responsibility and its Definition
Further it was also argued that responsibility towards society comes along with the power that business organisations hold, eventually if business organisations fail to fulfil their responsibilities towards society that would lead to erosion of their power over the society. This gives business organisations two choices, to hold and maintain the power they have over society by being socially responsible or to let go of the power by being ignorant towards their social responsibilities (Schwartz, 2009).
Sofian (2015) in his article analysed that there exists a positive relationship between corporate social responsibility and performance of business organisation, as corporate social responsibility taken up by businesses, help them in creating a positive image in the eyes of general public as well as in the eyes of consumers and eventually providing them with a competitive advantage and customer satisfaction.
According to Haynes (2013) corporate social responsibility is a discretionary practices and no business can be held liable for not performing CSR activities. There are some major areas which an organisation should work upon effectively in order to follow its social responsibilities like production of goods and services as well as creation of jobs for the economic development of the country, second is helping country people in dealing with social issues such as poverty.
Also according to the CSR model of Archie Carroll a corporate has four responsibilities: first is economic responsibility that is to earn profit, second one is legal responsibility that is to ensure legal compliance, third one is ethical responsibility which is to do what is right and last one is philanthropic responsibility that is best measured by the amount of resources an organisation chooses to contribute towards society (Grigore, 2010).
In the views of Visser (2010) there are four bases of corporate social responsibility, value creation, environmental integration, good governance and contribution towards society, each of the following has separate indicators to measure the CSR performance of the company as well as strategic objectives to be achieved in a particular period of time. For instance indicators of value creation are- ideal investment of financial, human and natural capital, inclusive growth of business and lastly development of sustainable and responsible products and services strategic objective to be achieved is economic development.
As per the views of Rexhepi (2013) corporate social responsibility and innovation may become the drivers of business success in near future. With growing complexity of social issues such as lack of education, poverty, climate changes, etc. success of future business organisation depends on how innovatively they deal with such sensitive social issues by making them an opportunity to their business rather a threat to the society. Organisations need to come up with such innovative products that not only fulfil consumer demand but also support some social purpose.
Corporate Social Responsibility and Innovation
According to Benn (2014) a sustainable enterprise is the one that focuses both on human sustainability as well as ecological sustainability, under the concept of human sustainability it promotes equal employment opportunity as well as development of its human capital by providing it with a better access to knowledge and education. Under the concept of ecological sustainability organisation strives to adopt positive sustainability policies and to operate in a manner that supports government and society for sustainable development of community as well as it values Mother Nature for all the resources and aims at reducing or eliminating any harmful impacts that it may have over the natural environment.
As per the views of Eccles (2014) Sustainability practices adopted by corporates affect their organisational processes, high sustainability companies tend to have better processes for stakeholder engagement as they are long term oriented. Sustainable corporates are often characterised by better disclosure of non-financial information as compared to their counterparts in the same industry. As a result companies with higher sustainability perform better in stock markets.
McElroy (2012) suggested that Social sustainability can never be achieved unless there is an equal distribution of scarce resources as well as an equal opportunity to all for usage of such resources, and for ecological sustainability business organisations should consider usage of scarce resource in a manner that it does not over run the increment in resources developed using technological innovations. That means in order to develop a sustainable society it is required that human activities do not adversely affect the natural environment.
As discussed earlier, corporate social responsibility is a discretionary practice, along with this there is no single best way through which every organisation can play its part or fulfil its moral obligation towards the society and the environment in which it operates. Different business organisations operate under different situations and have different characteristics due to which the manner in which they tend to address their social responsibility also vary from organisation to organisation (Moon, 2014).
Ideal corporates as a part of their responsibility of keeping all their stake holders well informed i.e. disclosure of financial as well as non-financial information publish corporate social responsibility report (Michelon, 2012). Nokia has been doing the same for a long period of time.
From Nokia’s CSR and sustainability report 2017 which is named as Nokia people and planet 2017, various examples can be seen which picture Nokia an ideal corporate citizen.
Sustainability Practices for Ideal Corporations
Several areas where Nokia is playing a major role for the development of community as well as to promote sustainability are:-
Nokia strives to protect environment by reducing wastage, emission, and energy usage as well as by fighting against adverse climate changes.
For the protection of environment Nokia aims at developing sustainable products or products that are low on emission as it believes that the major impact they have on environment is their product’s energy consumption during usage.
In 2017, Nokia became the very first telecom vendor to sign the commitment letter to reduce emission and submit targets for reduction of emission with science based target initiative.
Nokia strives to reduce its carbon footprints by ensuring that all its operations are eco-friendly as well as it encourages a more eco-friendly supply chain (Nokia, 2017).
At Nokia relevant efforts are made at all the four stages of product lifecycle-
1.) Procurement of raw material,
2.) Transportation and installation,
3.) Usage of product and
4.) End of the product life.
Nokia works on several business practices that are ideal and must be followed in every organisation to keep its workforce happy and satisfied. Few such practices adopted by Nokia are-
- Zero tolerance for discrimination- Nokia discourages every discriminatory practice based on personal attributes such as race, colour, sexual orientation, gender, religion etc. Nokia has set a gender steering committee in action to overlook gender balance and implemented several activities that promote gender balance both inside and outside the organisation.
Initiatives taken by Nokia to protect and promote diversity are:-
- NOKIA believes that the first step of gender balance is gender awareness; with the objective of gender awareness in year 2017 Nokia trained 2300 leaders on how to develop and manage diversified work teams.
- In September 2017, a letter of cooperation with UNESCO was signed by Nokia, to encourage practices such as women empowerment, leadership and gender equality.
- To fulfil its commitment of eliminating gender disparity in technology companies, Nokia organises several workshops under the event STEM (science, technology, engineering and maths) for women, girls (and boys) in 12 cities around the globe in association with greenlight for girls and skool.
- LGTBQ- Nokia works towards protection of moral right of LGTBQ community, for this Nokia has put in place an educational and support group called Equal! For those employees who belong to LGTBQ Community or whose friends or family members belong from such community. In 2017 the members of the group almost doubled resulting in expansion of activities. For their initiative towards LGTBQ community Nokia achieved a perfect score under corporate equality index of human rights campaign (Nokia, 2017).
Nokia has been working for the communities across the world in order to support community development. With the aim of bringing positive social change, Nokia in collaboration with several NGOs has been running different community development programmes (Nokia, 2018).
Some of the important community welfare programmes implemented in year 2017 are as follows:-
- Modernisation of community health services in Indonesia - in January 2017 Nokia collaborated with Finnish Committee for UNICEF to bring technology closer to health services. Company participated in a huge Vaccination campaign and developed a digital platform called Rapid pro. Rapid pro served as an innovative mobile platform to transform traditional care services into improved or efficient ones. The platform provided assistance to 6000 caregivers of infants by providing them with vital information like reminders for immunization. The platform was further customised to support communication and real time feedback between caregivers and government at district as well as health offices at provincial level.
- Codebus Africa- codebus Africa is the programme initiated by Nokia in February 2017, to bring community closer to technology. It was a huge continent wide 100 day programme to celebrate the empowerment of both community as well as technology. Starting from Ghana the tour finally ended in South Africa covering several countries in between like Nigeria, Ethiopia, Kenya, etc. It was a creative and playful initiative by Nokia to encourage youth especially girls to participate in science and technology.
Under the programme programming workshops were organised in which youth programmed songs using software sonic-pi.
- Internet to rural Chinese classrooms- some of the least developed villages in China do have schools but they lack computers and technology to access internet due to which their educational resources are insufficient. In June and September 2017 Nokia’s Shanghai Bells donated six internet class rooms to these areas and now they have better access to internet as well as opportunity to access any digital platform whichever they wish to for self-development. Along with this Nokia also provides students and teachers with sufficient internet training so that they can make the most of the opportunities provided to them by internet classrooms.
- Ethical business-
Due to Nokia’s unending commitment towards business ethics, compliance in past, policies for present and strong vision for future, it was recognised as 2018’s world’s most ethical corporate house by Ethisphesre (Nokia, 2017).
Ethisphere is one of the recognised institutes that sets standards for corporate ethics and compliance, evaluates several businesses on the basis of ethical standards followed by them and awards the companies which excels in ethical business practices (Ethisphere, 2018).
Nokia’s code of conduct is made up of five basic principles, which define the kind of business practices it expects from its employees during all its business operations:-
- Abide by laws and work as per policies.
- Be honest and fair towards your work.
- Treat everyone with utmost respect.
- Report issues promptly.
- State and own conflicts of interest and do not sacrifice honesty and integrity at any cost (Nokia code of conduct, 2018).
- Human rights-
Nokia aims at developing technology which promotes right to expression; it connects people and helps them share as well as access vital information. Biggest threat to mankind regarding technology is its potential misuse, which can infringe someone’s fundamental rights or right to privacy, Nokia through its human rights policy depicts its commitment towards the universal declaration of human rights as wells as towards the principles of UN global compact (Nokia, 2016).
Nokia's Corporate Social Responsibility and Sustainability Initiatives
Along with the human rights policy a human rights due diligence process is also implemented by Nokia to ensure via its sales interface that the usage of the products and technology developed by Nokia do not result in infringement of human rights.
- In 2018, a pilot programme on consumption of water in collaboration with carbon disclosure project to be implemented.
- To engage 180 suppliers in emission reduction practices by 2020.
- To achieve 90% employee engagement by 2020.
- To become the best employer of the industry across the world by 2020.
- To increase the percentage of women leadership in all its operations by 25%, as compared to year 2016.
- To achieve 100% health and safety awareness among employees this currently is 94%.
- To improve 2000000 lives through community development and corporate programmes, by focusing majorly on gender balance, health and education by 2025.
- By year 2030, to reduce the emission of greenhouse gases by 41%, as compared to the emission rate of year 2014 (Nokia, 2016).
When compared with its rival Samsung, it was analysed that Samsung contributes to various sports programs at national and international level to promote the spirit of sports across the countries in which it operate. Samsung has not only supported but has also sponsored various events, like the Olympic Games, the Asian games, and the youth Olympic Games. Samsung also supports athletes with their training expenses to grow and excel in their individual sports (Samsung, 2017).
While Nokia’s people and planet report shows no such CSR initiatives taken up by the company to promote sports in the community. Sports are vital to keep up the competitive spirit of people as well to extend a medium to the talented athletes to showcase their talent in their individual sports.
Suggestions to Nokia to enhance corporate social responsibility practices adopted by them-
- Nokia should focus more on ethical business training for their employees, as the target achieved in 2017 was below average i.e. 86% and which was supposed to be 95% by 2017.
- Nokia should promote the spirit of competition through sports as it revitalises the community, various people get benefits when sports events are organised.
- Nokia should focus on initiating various cultural programmes across various countries, as a part of their CSR so that in the modern era of technology people can reconnect with their roots and appreciate the rich cultural background they share.
- Along with the steps taken by Nokia to reduce the impact of its operations over environment Nokia should also come up with some programmes to educate children as well as adults on how to protect Mother Nature. Educated and well aware children will serve as an asset to the society and country at large.
Suggestions for further research:-
Present report is based on secondary data,
Further research can be done using primary data, which may involve a survey through questionnaires, to be filled up by general public of different communities in which Nokia claims to conduct its CSR activities.
After collection of data using primary and secondary data a comparative analysis can be done between major corporate players of the same industry.
From the discussion undertaken above it can be concluded that corporate social responsibility is the commitment made by business organisations to adopt such business practices that are justified on ethical, legal, environmental, and economic grounds. CSR activities promote community welfare and help in picturing business organisations as idle corporate citizens. It was also analysed that bigger the organisation, greater is the social responsibility entrusted on them as they have the power to influence the society at large. Though CSR is a discretionary practice and no organisation can be forced to follow it but then business organisation has to forego its power over the society in cases it chooses to step backward when it comes to social welfare.
It can also be concluded that a sustainable enterprise is the one that follows triple bottom line approach to measure it’s all over performance which means a Sustainable organisation considers people, planet and profit in all its business operations for its long term survival and growth.
Nokia as a sustainable enterprise aims at reducing its impact over the environment, it works towards the development of local communities, it promotes gender balance as well as prohibits all types of discrimination while managing its well diversified work force. Nokia comply with all kinds of disclosures expected from a conglomerate like it in order to keep its stake holders well informed. Along with this, Nokia follows standard code of ethics and has framed an ideal code of conduct for all its employees and first line managers, so that each and every operation is conducted with utmost honesty and integrity. Nokia has pictured itself as an ideal corporate citizen by making so many positive changes to the society. Nokia also sets rigid CSR targets to be achieved in the coming years of its operation and strives to achieve them by constant action and effective monitoring of the efforts.
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