Corporate Social Responsibility and Finance

This assignment delves into the crucial link between corporate social responsibility (CSR) and access to finance. It examines research studies and literature on the topic, analyzing how companies' ethical and sustainable practices impact their ability to secure funding. The assignment encourages students to critically evaluate the arguments presented and understand the complex interplay between CSR and financial performance.

Corporate Social Responsibility

Table of Contents
INTRODUCTION................................................................................................................................3
TASK 1.................................................................................................................................................3
1.1....................................................................................................................................................3
1.2 ...................................................................................................................................................4
1.3....................................................................................................................................................4
1.4....................................................................................................................................................5
1.5....................................................................................................................................................6
TASK 2.................................................................................................................................................7
2.1....................................................................................................................................................7
2.2....................................................................................................................................................7
2.3....................................................................................................................................................8
2.4....................................................................................................................................................8
2.5 ...................................................................................................................................................9
TASK 3.................................................................................................................................................9
3.1 & 3.2..........................................................................................................................................9
3.4..................................................................................................................................................10
CONCLUSION...................................................................................................................................11
REFERENCES...................................................................................................................................12

INTRODUCTION
Corporate social Responsibility (CSR) is the moral obligation which is to be fulfilled by
every organisation. It is the duty of the company to work for the welfare of the society (Basu and
Palazzo, 2008). The report is based on the corporate social responsibility and its role in business.
The present report is based on ITSA Goals Posts Limited which is UK based sport manufactures
entity.
It can be seen that ITSA Goals Post Limited are currently experiencing a number of issues in
regards to the working conditions and treatment of the employees of its suppliers. The purpose of
the analyses is to find out the significance and implementation of the CSR policies in the
corporation. Many of which could potentially affect the public image and brand name of the
company, and so the purpose of the report is to explore the significance of implementing a CSR
policy into the organisation.
TASK 1
1.1
Corporate Social Responsibility is a commitment in which the company makes a practice of
doing the business ethically and to make a contribution to the economy, and the quality of the life of
the working members, their families and local community (Carroll and Shabana, 2010). It is the
moral duty of the entity in which it has to contribute some monetary fund in the favour of the
society. It is the legal term and all the sections of the corporate laws are covered in it. It is the
process in which the entity has to take the decisions for the welfare of the society and surroundings.
It is done because the corporates are liable and having some moral duty towards the society. Thus it
is a legal approach in it the entity has to give the donations or charity for the development of the
society.
It can be stated that in the traditional era, no emphasis was laid by businesses in terms of
accomplishing their responsibilities towards society. However, it can be argued that at that time also
businesses were aware that they are having certain responsibility. There are several factors that have
encouraged organizations to accomplish their responsibilities towards society. One of the most
important among those is linked with the changes carried out in demand of consumers and values
which exist in the society (Cheng, Ioannou and Serafeim, 2014). Along with this, businesses were
also encouraged to be accountable for the products and services in which they have offered to
people in the society. Slowly and steadily more awareness was created by government and other
pressure groups regarding the key responsibilities, in which organizations have towards people

living in the society. The way attitude has changed of businesses has also affected the overall
concept linked with corporate social responsibilities of companies. For example the many big
brands such as Nike, Marks & Spencer, Procter and Gamble carry out various types of CSR
activities. It provides the guidance to the management of NIKE in organisation as well as non
government organisation, it helps in protecting goodwill, capital of NIKE Businesses have started
looking CSR practises in more positive manner and they are well aware of this fact that CSR
activities do affect their sales and profitability. Nowadays the CSR is done for the development of
the company, because if all the resources have been managed effectively then it will give effective
results to their firm and that may result in good working environment of firm. This may help
company to make efforts so that they can improve the society in any ways, they may aid society by
various ways such as they can work in non profit or may donate money to the society.
1.2
In the previous time corporates were not aware about the policies and terminologies related
with the corporate duties (Kotler and Lee, 2008). There was no such role of the corporate awareness
as there was industrialisation. In today's era there has been much change and it is the duty of the
management to provide all the charities and ethical obligations, which can be used for the welfare
of the society. Now the time has changed and the entity has to work on the matters related with the
social responsibility. It is the universal law and applicable in every nation. ITSA Goals Posts
Limited, is a sports manufacture and it is the obligation of the entity to do some contribution in the
field of the CSR (Kim, Park and Wier, 2012). As the time has changed the role of the social
responsibility has also modified. It is the duty of every company in present time to provide the
contribution towards the society. So the emerging trends are very important and these has emerged
the CSR policies in a systematic way. CSR is the activity in which is needed to fulfil the
responsibility toward the society. This will help in making the development in the society. This will
also help in making development in the Country. This will give the good effect to the company as
well as the society. This will help in making the company perform effectively. Attitude of CSR
activities are changing their various things by which it is getting changed, from all reasons one of
the example of is that there is lots of competitions are in market so as because of that they have to
change many of the policies and rules to sustain in market and by this the CSR activities as to be
changed. This might create some issues and this can be beneficial also. So by the changing of the
some factors or because of some reasons the attitude of CSR activities get changed.
1.3
The European Union has made it first pledge on CSR in the Lisbon Summit. EU has
published a green paper on CSR. It was done to increase the awareness of this in the people. EU is

the prime governing authority of which is liable to make the corporate social responsibility laws
(Suyanto, 2010). UK government finally appointed the world's first minister who will be
responsible for the implementation of the CSR laws. The focus of the government is on the policies
and rules which are made under the EU and are applicable to all EU companies [regulated in all the
corporates]. Thus the UK government and EU are the most important liable authorities to regulate
the laws and proceedings related with the CSR policies. In it three tools are included social
responsibility, corporate governance and ethical duties. These are the moral obligations of the entity
and the company has to fulfil all the needs and requirements related with the development of
society. In the environment there are two types of issues they will affect the CSR these are internal
and internal. Government rules are affecting on the CSR and it is essential for them to follow all the
guidelines of the government. Government of European Union helps in maintaining and improving
standards as it is essential to attract investment capitals. Along with this it aid in boosting
competitiveness and have to build trust within the single market. It is a legal framework which
underpins regulation of firms by their shareholders. Regulatory bodies of UK is ensure that there is
a robust governance which aid in enhancing or improving areas so that they can fulfil needs and
wants of consumer. They have to analyse and identify the ways which will aid in enhancing
effectiveness so that they can impose new strategies and fulfil requirements of firm.
1.4
To protect the society is the ultimate goal of the company. ITSA Goals Posts Limited is a
sports manufacture company and has the business in UK. It is operating its business activities in the
society and for the welfare of it. There are some legal laws and matters which are related with the
CSR and the entity is liable to follow those regulations. There are some environmental issues which
are being faced by the society and the corporates. These are described as under:
Cleaner Production: being a manufacture it is the duty of ITSA goals Posts Limited, to work
for the welfare of the society. The company can produce some industrial waste which can be
harmful for the society. The waste water, chemicals and other substances can be dangerous for the
environment so the duty is implied on the corporate to follow the OECD guidelines and CSR rules
so that the entity cannot be harmed (Crowther and Aras, 2008).
Environmental Management: In it the environmental components such as soil, water and oil
are included. Handling of the household waste is a big issue for the municipalities and
governmental bodies.
Industrial Waste: This the most popular event in present time the commercialisation and
industrialisation is increasing very widely. So it is the duty of the management not to violate the
environment and to provide a protection to it (Crane and Matten, eds. 2007).

Global warming: It is a subject which is the main element in the environmental needs of the
society and as well as it is having huge impact on the society. Now a days global warming is
increasing day by day as people are not taking care of nature as they are becoming more careless
about it, the waste which is produced in the factories day by day that affects the environment in
more quantity. If the company is producing clothing items then the fabrics which they are using in
their products has to be environment friendly other wise that may create problem to nature. The
packaging which is done in the product has to be recyclable otherwise that can affect the nature and
all that are the reasons which is behind the global warming. The global warming may affect their
supply chain, the company should try to use environmental friendly fabrics and should use
recyclable packagings and etc.
1.5
While following the regulations of the Corporate social responsibilities there can be some
political and economic issues which can take place (Lindgreen and Swaen, 2010). As far as the
economic matters are concerned the economy is very much affected by the CSR policies. When the
corporates are to pay the contribution for the social welfare then it directly goes in to the fund of the
government. Some times these funds are not used as per their motives and this can lead the
economic imbalance. Along with this the political matters are also liable for the failure of the CSR
policies. The governing and regulatory authorities mould the rules and regulations this can be
harmful for the successful corporate social obligations. Discounts in the products and services: In it
products and services can be provided on the discounted rates which can help on the economical
level (Mishra and Suar, 2010). There are so many political and economic issues which the
employees and managers is facing by using or implementing CSR policies which will aid in
attaining goals and objectives. Higher authorities of ITSA have to prepare goals which they want to
achieve. They have to make profit and for that issues to be made. They have to balance all activities
which are provided by them in societies and this aid in doing welfare in communities. They have to
sell the products and services of sports according to the income of consumers so that each and every
person of society can afford and attain targets. There are different political issues which they are
facing and in this government or ministry bodies have to use laws and regulations which will aid in
attaining goals and objectives. They have to take initiatives so that they can remove the remove low
wages.
1.6
There can be issues related with the social communities. There are some critics which says
that it is not worth opting policy (Du, Bhattacharya and Sen, 2010). It means that there are some
policies which are made by them but they are not helpful for attaining targets. This is an old idea,

The people of the society have the view that it is not a good policy as the companies have the focus
on increasing the profits and this can be a negative aspect for the persons in the society. As this rule
of CSR is followed by the organisations and they have to opt this policy because they have the
intention to increase the profits. This is criticised by the social communities as it is not worth doing
thing and the focus of the company should be on the welfare of the society. Social issues like racism
and discrimination can be resolved by the CSR activities companies which are having a direct
contact with the end users can make a CSR activity on the social needs and they can make a social
campaign also. There are some issues which they are facing in CSR activities which includes that
government have to made best rules and regulations along with this they have to deliver social as
well as environmental objectives in business sector. There is having a great demand for corporate
disclosure from stakeholders which includes employees, investors, communities etc. moreover, this
CSR policies assist in boosting the interest of consumer. When they are having a social
responsibility then this will helps in attaining advantage which includes improvement in financial
performance. It aid in enhancing brand image and goodwill in a competitive market as well as
increasing sales along with consumer loyalty. There are some advantages to the communities also
which includes product safety and quality, charitable contributions and employee volunteer
programmes.
TASK 2
2.1
It can be beneficial for the company to use the policies and methods related with the CSR.
CSR activity is a moral obligation of the company's management and if they are using best CSR
activity then this will aid in improving or boosting brand image and goodwill in a corporate sector
(Basu and Palazzo, 2008). By this they will be investing more money in the organisation and this is
a good sign for the success of the company. Employees are the key factors for the entity. If the CSR
policy is followed then the investments will enhance and this can increase the salaries of the
employees also. Along with this all the moral duties and obligations which are related with the
development of the welfare of the stakeholders can be fulfilled. So it is beneficial for the
development and welfare of the workers in company. They have to provide motivation as well as
encouragement to their employees so that they can deliver best products and services so that targets
can be attained. This will aid in increasing efficiency and productivity. CSR helps the company do
many beneficial things for the employees of their organisation. The firm can use the CSR activities
to recruit the employees which would help them in getting an good skilled employees. And that can
help them in getting proper training. It provide the facilities to the employees which is been related
to the social and environment. Workers have to do proper work in their best working condition and

also having their low wages this will having a negative effect on company. This will affect the
labour as it has been left their business entity so they have to give high wages to them this will aid
in improving performance and productivity in the market. They have to implement or conduct CSR
programme so that ITSA can resolve all obstacles which are facing by labourers.
2.2
This is the decision support framework for analysis of the supply chain networks with
corporate social responsibility (Carroll and Shabana, 2010). The product is goes through various
channels these are manufacturer, retailers and consumers. In this chain the focus of is based on
maximization of the profits and reduction of risk. The study can be done on the methods which are
opted for determining the prices of the goods, adding costs in it and the level of social
responsibilities which are clubbed in the whole process of the supply chain. If the CSR policies are
adopted and considered in it can reduce the transactional cost, risk and environmental impacts.
Thus there is a great role of CSR in supply chain. Companies are expected that they able to do work
on track and have to put carbon footprint so that they can do proper manufacturing activities but
also to be included as a transportation, distribution etc. Along with this they have to do proper
monitoring of the activities of their extended supply chain. This will help in increasing the diversity
and inclusion in their hiring practices. Staff members and employees of firm having their own
supply chain and have to improve that so that members cannot face any issues. They have to collect
or purchase best material so that best products can be delivered. Along with this they should use
their recycling activities so that materials or merchandise can re-use the products.
2.3
A good corporate governance can be beneficial for the overall development of the working
members and the corporate. ITSA Goals Posts Limited is a manufacturer company which is
operating its business activities in the filed of sports items (Kotler and Lee, 2008). It is very
important for the entity to follow the CSR rules so that a clear and actual goal can be obtained. It
can satisfy the needs of the stakeholders and society. When they deliver products and services
according to need and wants of consumers so that targets can be achieved. They have to fulfil
demands of consumers which they have. Along with this they have to fulfil needs and desires of
society members which will aid in improving their business performance. By this all the suppliers,
customers and employees can feel more comfortable while dealing with the entity. This can improve
the image and goodwill of the company. When company having a best image and goodwill in
competitive market then this will attract large number of consumers and this will also increase
demand of products and they have to satisfy them then it aid in improving business performance.
There are some issues which are suffered by firm while maintaining their brand image and goodwill

in market which includes that business entity does not doing proper advertisement and also using
bad press etc. It is the good sign for the development of the corporation. By this the employees will
feel more motivated and will be dedicated towards their work. Thus, can improve the business
performance of the corporation. CSR having the good practices and by that it should become more
visible. According to that stakeholders should meet in a more formal way so that they can set the
more common goals as well as monitor the progress in the CSR strategy which affect the
companies.
2.4
Marketing strategy is very important for the development of the business. As it is the process
which is used by the management of the entity to make people aware about the products and
services of the company (Bénabou and Tirole, 2010). In the advertising and promotional activities
are concerned, if the entity will be following the proper way of the CSR laws, then the customers
can have more faith on it and they will be motivated to buy more products and services (Dhaliwal
and et.al. 2011). This is a good sign for the growth of the company. So it has a great role in the
marketing strategies. The customers are the most prime factors for the success and development of
the entity and its products. If they will be satisfied then the sales will automatically increase. The
consumers can be attracted by following the corporate governance scheme, as it is made for the
development of the stakeholders and society. SO it is very important for ITSA Goals Post Limited
to follow the procedures and laws of the CSR it can be helpful in making the marketing policies and
strategies of the entity. When the company is using different CSR activities then they have to use
proper marketing strategy which will helps in attaining the goals and objectives. The impact of CSR
initiatives which helps in maintaining the stakeholders as well as consumers relationship and by
using the different strategies of marketing they can increase the consumer value by resonating the
value proposition which assist in underlying the CSR values related to supplier and adds value for
the consumer. Managers have to take initiatives in delivering better services and also assist in
maintaining relationship so that they cannot face any type of issues. When appropriate and relevant
CSR activities helps in increasing or boosting brand image in a competitive market so that more
public will attract and firm will generate more revenue. They have to use CSR values so that
supplier of products will add some value for selling products to consumer.
2.5
There are various stakeholders in the organizations. These can be employees, customers,
suppliers, creditors, and society. In this company, more stakeholders are board of directors,
investors along with owners. CSR rules describes that to follow the corporate governance is very
important for the entity, and these laws are made to protect the stakeholders and their interest.

Conflicts arise when the needs and requirements are not fulfilled (Suyanto, 2010). Employees have
the desire to get more salaries and incentives. If the entity is not providing the sufficient amount to
them then it can be very tragic for them and this will make them more aggressive. Along with this
the investors have the desire that their returns should increase. They want that the company should
earn more revenues so that their returns can also be increased. The creditors have the view that their
payments must be made on time. So different stakeholders are having different objectives. It the
duty of the management to fulfil the needs of them so that it can be advantageous for the entity as
well. If corporate governance rules are followed properly then no issue can be arisen with the
stakeholders. As if the employees are provided good salaries they will be more energetic. In the
same manner if the returns are provided to the investors they will be happy and satisfied as well. So
it is essential for the company to meet the requirements of all the stakeholders so that they can be
satisfied. While assessing the potential conflict shareholders have to expect the business so that they
can make a profit and they have to receive a return on their investment. It arises when the needs of
the some stakeholder groups so that they can compromise the expectations from the other person. A
business has to make proper choices with some stakeholders. They have to use appropriate policies
and it needs to be communicated as well as it includes the information related to stakeholders. Staff
members of business entity have to deliver high, best and qualitative products and services so that
investors can make correct decision. Accurate information should be provided so that investors of
firm make correct judgement. When high quality will be delivered at high price as it is against
investors which having a interest of reduced price.
TASK 3
3.1 & 3.2
ITSA goals Posts Limited is a sports manufacture company which is operating its business
services in providing its services in UK . The entity is following the CSR policies. It is following
the corporate governance laws (Crane and Matten, eds., 2007). It is taking care of its various
stakeholders and meeting all the obligations related with them along with this the entity is working
for the welfare of the society. Voluntarism is predominant and implies that responsible business
activities are distinct and reach beyond the rule of law. In the principles describes that the
government is having no more interest in the matters of the CSR. There should be structured
involvement of the voluntarism in corporate governance, as it is the duty of the government to look
beyond the implementation of the rules and methods which are to be adopted in a company.
ITSA goals Posts Limited, CSR policy directly aims at carrying out economic development of the
businesses along with having a very positive impact on the society. Apart from this, Its CSR
practises also lay emphasis on lowering down the resource footprints. In terms of voluntarism, it

can be asserted that the selected business enterprise voluntary participate in all the activities and
carries out the same in the best possible manner. This helps the selected business enterprise to
develop its brand image in the market and enhance the volume of sales. As the company is working
in the sports manufacturing so it is essential for them to make a better CSR in their field. They have
to make a better strategy to make a CSR activity. Analysis of the objectives is the main thing which
can help to them to make a better business in the market. Another company is Admiral who
manufacture best products related to sports. Company have to make or adopt appropriate strategy
which is related to CSR as it helps them in maintaining targets and objectives. They serve as a real
purpose and this business entity having a business that they have to protect people and also from
diverse consequence and delivers best products. Admiral group having a aim so that they contribute
to w8ider communities in which they are operating.
3.3
CSR policy is resisted by some stakeholders. They have the views that the organisation is
not following all the essential norms which are supposed to be implemented under this policy. There
are various stakeholders such as customers, they can have the issues that their desires are not being
fulfilled (Crowther and Aras, 2008). The prices which are being charged to them is very high and
the quality of the goods is low. In the CSR term it is the moral obligation of the entity to satisfy
them. Along with this sometime the suppliers are not paid on time this can be very bad thing and it
should be avoided. The creditors are the persons who have faith on the company and this reason that
they give their money to us but the entity is some how unable to satisfy the needs and requirements
of them. This is not a good sign for the success of the company. It should follow the policies related
with the corporate governance so that the main object of making CSR can be attained. They have to
make a proper analysis of the CSR objectives by which they can make a better strategy up on the
CSR and it can help to them to make a direct impact on the CSR objectives. Stakeholder analysis
also can help to the company which are involved in the CSR project. So they have to use it in their
future CSR projects. They have to deliver employees of business entity so that targets can attain.
Employees have to fulfil their responsibility by delivering qualitative products which will assist in
providing proper satisfaction so that success can be achieved. Environment also provided in a best
and positive in nature which provide satisfaction to their employees. Along with this it assist
community members so that they can satisfied which will aid in reaping targets.
3.4
CSR policies can be modified by the European Unions. It is the duty of the management of
the company to follow the corporate governance terms (Lindgreen and Swaen, 2010). CSR can

increase the performance of the business. It is a good policy which can be beneficial for the
development of the organisation. There can be changes in the principles of the CSR, and these
changes can be beneficial or negative for the company. Time to time governments can mould the
rules and policies these can be less effective for the implementation. The main objective is to
protect the society and the interest of the stakeholders. It is the obligation of the company and
should be met.
Potential impact of the changes is that it has resulted in enhancing the overall volume of sales
and profits within the selected business enterprise. When employees of business entity make
changes according to the needs and wants of consumer then automatically consumers can purchase
goods and services and it help firm in boosting the sales and generating more and more revenue.
This also assist in expanding business in a competitive market. Accomplishment of CSR activities
has provided the company with more potential opportunity in terms of creating a sense of
satisfaction among people in the market. Along with this, it has also resulted in developing a strong
brand image in the mind of consumers and supported in carrying out smooth flow of all operations.
It can help to the company to increase their market share. People can be aware for the company
which can help to them to increase their sales and as well as it can help to the company to make a
better image in their target market to make a lead on their targeted customers. They have to do
innovations so that consumers can attract. They have to deliver best and positive environment so
that they can deliver best and qualitative work so that targets can be attained. If they want to attain
success then they have to make so many changes and it should be in a long run. They should
capture new opportunities which will assist in reaping targets.
CONCLUSION
In the given report role of CSR is described. It is very important for every organisation to
follow the rules and regulations of the Corporate governance. It can be beneficial for the entity and
its stakeholders. As they are the most elements which are important for the organisation as well as
making a profit. Thus it can be concluded that the corporate social responsibility is moral duty
which is to be fulfilled by the company so that the environment can be protected.

REFERENCES
Books and Journals
Aguilera, R.V. and et.al., 2007. Putting the S back in corporate social responsibility: A multilevel
theory of social change in organizations. Academy of management review. 32(3). pp.836-
863.
Basu, K. and Palazzo, G., 2008. Corporate social responsibility: A process model of sensemaking.
Academy of management review. 33(1). pp.122-136.
Bénabou, R. and Tirole, J., 2010. Individual and corporate social responsibility. Economica.
77(305). pp.1-19.
Carroll, A. B. and Shabana, K. M., 2010. The business case for corporate social responsibility: A
review of concepts, research and practice. International journal of management reviews.
12(1). pp.85-105.
Cheng, B., Ioannou, I. and Serafeim, G., 2014. Corporate social responsibility and access to
finance. Strategic Management Journal. 35(1). pp.1-23.
Crane, A. and Matten, D. eds., 2007. Corporate social responsibility (Vol. 2). Sage.
Crowther, D. and Aras, G., 2008. Corporate social responsibility. Bookboon.
Dhaliwal, D. S. and et.al., 2011. Voluntary nonfinancial disclosure and the cost of equity capital:
The initiation of corporate social responsibility reporting. The accounting review. 86(1).
pp.59-100.
Du, S., Bhattacharya, C. B. and Sen, S., 2010. Maximizing business returns to corporate social
responsibility (CSR): The role of CSR communication. International Journal of

Management Reviews. 12(1). pp.8-19.
Kim, Y., Park, M.S. and Wier, B., 2012. Is earnings quality associated with corporate social
responsibility?. The Accounting Review. 87(3). pp.761-796.
Kotler, P. and Lee, N., 2008. Corporate social responsibility: Doing the most good for your
company and your cause. John Wiley & Sons.
Lindgreen, A. and Swaen, V., 2010. Corporate social responsibility. International Journal of
Management Reviews. 12(1). pp.1-7.
Mishra, S. and Suar, D., 2010. Does corporate social responsibility influence firm performance of
Indian companies?. Journal of business ethics. 95(4). pp.571-601.
Peloza, J. and Shang, J., 2011. How can corporate social responsibility activities create value for
stakeholders? A systematic review. Journal of the academy of Marketing Science. 39(1).
pp.117-135.
Suyanto, M., 2010. Corporate Social Responsibility. Karya Ilmiah Dosen.
Werther Jr, W.B. and Chandler, D., 2010. Strategic corporate social responsibility: Stakeholders in
a global environment. Sage publications.
Online
Corporate responsibility. 2016. [Online]. Available through: <http://www.out-law.com/page-8221>.
[Accessed on 29th October 2016].
Corporate social responsibility – the UK Corporate Governance Code. 2016. [Online]. Available
through: <http://www.out-law.com/page-8221>. [Accessed on 29th October 2016].
UK Government Gateway to Corporate Social Responsibility. 2016. [Online]. Available through:
<http://www.eldis.org/go/home&id=7230&type=Organisation#.WBR0lpDhU8o>.
[Accessed on 29th October 2016].