Corporate Social Responsibility: CSR Disclosures Evaluation (Essay Sample)

< CSR Disclosures>
By
< Lecturer’s Name and Course Number>
Introduction
Corporate social responsibility is an organization's self-regulation mechanism which is integrated into its model. The business monitors itself ensuring it actively complies with the law, norms, and ethical standards. The main aim of corporate social responsibility is to increase the profit margins while ensuring a positive public opinion (Dhaliwal et. al 2011, p.62). Due to CSR strategies, organizations usually have a positive impact on the stakeholders and the environment. The stakeholders usually entail the community, employees, consumers, and the investors. There are several theories which aim at explaining how CSR disclosure is practiced, among them the Legitimacy theory. This theory is mostly put into use to expound social and environmental disclosures. This theory has it that companies work towards ensuring that their operations are within the norms and bounds of their societies respectively. It relies on the notion that there is a “social contract” between the organization and the society it operates in (Garriga & Melé 2012, p.80). This contract stands for the expectations the society have about how the company should operate. In this article, we are going to evaluate CSR disclosures made by AGL Energy Limited and The Reject Shop Limited.
CSR Disclosures Evaluation
AGL Energy Limited is an energy company located in Australia. Its activities include generating and retailing electricity for residential and commercial uses. Power stations from which this company produces electricity from use wind power, natural gas, hydroelectricity, coal seam gas, and thermal power (AGL 2016). In their annual report, this company disclosed how it expects to relate to the environment and society too. This company is aware of their responsibility to the environment as well as to the community and other stakeholders. At AGL, they have a “social contract” with their customers. The customers expect quality service, value for their money, understanding and meeting of their needs, and answers to their questions in case of any. As seen in their annual report, AGL has provided a superior experience that meets the needs of their customers. They had a target in the 2015 financial year to have a customer satisfaction score that is higher than that of their main competitors. The annual mean score of customer satisfaction was 7.01, and it was higher than that of the customers (AGL 2016). This shows that the legitimacy gap between AGL and the customers is very small.
AGL Energy Limited has a commitment to the environment. They work towards achieving excellence in managing the environment. This is through reduction of greenhouse gas emissions. It is a social contract where they have to achieve environmental management and at the same time honor their contract with the customers. They also had a goal/contract to reduce global warming to less than 2°C above pre-industrial levels (AGL 2016). In their quest to meet these goals, AGL has a green energy project that is enabling the customers to support energy sources that are renewable, for instance, mini-hydro, solar, and wind energy. In their annual report, they indicated that they will continue researching on how to implement these policies. That is not enough and they ought to come up with a viable solution. There is evidence of legitimacy gap between the company and the environment. The expectations of the environment are that the company fully complies with their Greenhouse Gas Policy. The legitimacy theory requires that the company comply with the contract, but continuous emission of the gasses breaches that contract.
At AGL, they have a commitment to the community. The company ought to understand and ease the concerns of the community, identify the risks of a project and manage them, and then find opportunities in which the community can get involved in their projects. This will aid in building trust with the communities so that they can comprehend how AGL helps them and also get a grip of the company’s benefits and risks (Dhaliwal et. al 2012, p.730). Some of the activities the company is engaging in is to offer grants to the community members. The company offered grants totaling almost $34,000 in the 2015 financial year (AGL 2016). The grants covered community development programs, sponsorships, and donations. There is no evident legitimacy gap between the company and the community. The relationship between the company and the community is okay, and many community members are happy with the company.
AGL Energy Limited has a social contract with their employees and potential employees too. In the 2015 financial year, the company had a goal to have an employee engagement score of more than75%. They met this goal since the score was 76%. That score is within the ORC International Best Performing zone (AGL 2016). The company engages its employees in the running of the organization and also in decision making. Through this, they are able to achieve employee satisfaction. The company is also committed to diversity and inclusion in its workforce. They understand that it is through this that they will be in a position to understand and engage their customers, communities, and employees (Dhaliwal et. al 2011, p.68). There was no evident legitimacy gap between the company and its employees. Their efforts to honor their contract with employees is evident through their public declarations to review their employment policies and implement inclusion strategies. In May 2015, the company was recognized for employee support (AGL 2016). AGL Energy Limited has sufficiently covered all the stakeholders in its corporate social relationship disclosures.
The Reject Shop is discount variety store chain based in Australia. In Australia, the company operates more than 230 stores and has over 5000 employees (Rejectshop 2016). This company has made “social contracts” with the customers, the environment, and the community. This company has a commitment to customers about product control, honesty in pricing, and treating the customers’ complaints fairly. This is possible through ensuring that their products are fit and safe to use (Garriga & Melé 2012, p.80). They will also account for their prices and substantiate any claim they make. In case of any complaints, the company ensures a hassle-free return policy where customers get fully refunded upon proof of purchase. Employees are dealt with accordingly if they lack to comply with the “contract”. They also have launched programs such as the “products and promotion” program which further indicates their commitment to the customers. The Reject Shop also has planned other projects which will further show how they value the customers. There is a project in which they will change how they engage with their customers. That will be done by replacing their monthly catalog with; regional televisions of high quality, introduce leaflets, campaign in national magazines, and expand their utilization of social and digital media. There is no evident legitimacy gap between the company and the customers.
The Reject Shop has a commitment to the environment. In its annual report, the company indicates its responsibility on its environmental impact. The company looks forward to research and implement environmental outcomes which are positive. They are committed to decreasing their environmental pollution and greenhouse gas emissions. They put emphasis on energy usage, recycling techniques, and waste disposal. The Reject Shop Company has complied with this commitment through various methods: The Company replaced all T8 lighting with T5 lighting to save energy across all its stores. New stores are getting equipped with LED lighting in a bid to minimize energy usage. An LED rollout is also being implemented for stores with high electricity usage. They are also replacing high usage air conditioners with energy efficient equipment (Rejectshop 2016). The company is also working hard towards reducing waste and increasing recycling. They recently had a program which oversaw a 15% reduction of the waste they send to landfill. Although they are working hard to reduce waste disposal, they are still not perfect, and many of their stores are playing a role in the pollution of the environment. That is evidence for the legitimacy gap that exists between the Reject Shop and the environment.
The Reject Shop has a commitment to the community. It is a social contract with the community whose compliance will see to it that the community understands the importance of the organization. From its annual report, it is evident that the company allocates funds to support the local communities through sporting organizations and charities through donations. Due to their endeavor to be a community focused organization, they launched a foundation called The Reject Shop Foundation. The aim this foundation is to help needy children. They have collection boxes placed at their various stores to enhance customers' donations to the children. The success of this project is evident since they raised over $35,000 in the first month (Rejectshop 2016). There is no evidence of legitimacy gap between the company and the community. However, the company in its disclosure does not address all the stakeholders. There is no evidence of what t...