Siemens' Sustainable Enterprise and Corporate Social Responsibility

This report provides an analysis of sustainability and corporate social responsibility (CSR) with a focus on Siemens AG. It begins with an introduction to the importance of CSR and sustainability for organizations and society, followed by a literature review defining key concepts like accountability, transparency, and the core principles of sustainability. The report then presents a critical analysis of Siemens' CSR activities, including its support for universities, scholarship programs, and upgrades to Industrial Training Institutes. Based on this analysis, recommendations are made for further enhancing sustainable development and improving CSR activities within Siemens. The report concludes that prioritizing CSR and sustainability is crucial for organizations to thrive in today's business environment, emphasizing the need for long-term social, environmental, and economic value.

Sustainable Enterprise and social responsibility

EXECUTIVE SUMMARY
Sustainability is concerned with the preservation of resources for use by the future
generations while corporate social responsibility is associated with performing welfare
activities for the society by the organizations so as to achieve sustainable development.
The organization Siemens works for achieving sustainability and conducts a number of
CSR activities which are being critically analyzed. The critical analysis has resulted in
some recommendations for the organization that can be implemented for further
enhancement of the sustainable development and improvement in the CSR activities. It
is concluded that CSR activities and accomplishment of sustainability is important for
the organizations to successfully sustain in the business environment.
1

Table of Contents
EXECUTIVE SUMMARY...................................................................................................1
INTRODUCTION...............................................................................................................2
LITERATURE REVIEW.....................................................................................................3
CRITICAL ANALYSIS AND CASE STUDY.......................................................................8
RECOMMENDATION......................................................................................................12
CONCLUSION.................................................................................................................13
REFERENCES................................................................................................................14
2

INTRODUCTION
The implementation of corporate social responsibility and sustainability is important for
the organizations as well as for the development of the society. The notion in broader
terms can be described as planning for the welfare of the society through charitable
methods and the methods that concern with the implementation of the environmentally
friendly policies at the workplace. The assignment has taken into consideration the
organization, a German conglomerate company, Siemens for highlighting the concept of
sustainability and corporate social responsibility and the principles associated with it.
The concepts will be individually explained followed by relating the concepts
implemented in Siemens. The literature review will be done for explaining the following
concepts followed by a critical analysis of the sustainability and corporate social
responsibility in Siemens. The recommendations will be drawn for the critical analysis
conducted followed by the conclusions.
3

LITERATURE REVIEW
The term Corporate Social Responsibility (CSR) as stated by Lindgreen and Swaen
(2010) is a corporate approach that successfully provides a contribution for sustainable
development in the form of delivering social, monetary and environmental benefits to all
the stakeholders. Another definition by Aguinis and Glavas (2012) state that CSR is
the ethical principles that a firm must be responsible for the way it can have an impact
on the society and the environment. Carroll and Shabana (2010) also demonstrate that
CSR comprises of accomplishing 4 responsibilities namely legal, economic, ethical and
philanthropic. The concept of CSR is a wide concept and addresses topics like health
and safety, working environment, corporate governance and contribution to economic
development. According to Tai and Chuang (2014), it is the initiative taken by
organisations for assessment of and taking responsibility for the firm’s impact on social
being and the environment. It may also be denoted as corporate citizenship and can
include short-term costs that do not give immediate results in the form of financial
benefits to an organisation, rather endorse an environmental and social change that is
encouraging (Carroll and Shabana, 2010). Similar views are shared by Schneider and
Schmidpeter (2012) stating that Corporate Social responsibility operates as a self-
regulatory mechanism in which business monitors and guarantee its dynamic
compliance with the law, ethical values and national and international standards.
Visser, et al. (2010) state that Corporate Social Responsibility encompasses a range of
activities like a socially responsible investment (SRI), protection of environment and
sustainability, development of good relations with employees and other stakeholders
and working in corporation with local communities. Du, et al. (2010) share views on the
significance of CSR to organisations as it helps in increasing competitive advantage for
the employees, build trust among the customers as well as employees and also raise
brand awareness. According to Bénabou and Tirole (2010), the activities of CSR are
vital for the preservation of environmental resources and successful retention of
fundamental rights and ethics of individuals. The programs and initiatives by CSR help
the firms to gain growth and development due to the fact that employees of the
4

organisations with successful implementation of CSR activities take the decision of
working in the same firms for a long duration. It has become an international
phenomenon and raised its awareness in the recent years (Kang, et al. 2010).
According to Langhelle (2010), the acceptance and deployment of a wide variety of
CSR initiatives and programs in the organisations ranging from small scale to large
scale firms have raised since 1990 and has contributed immensely to growth and
development of the brand image of the business firms.
According to Drews (2010), the deployment of CSR within the businesses provides
upgraded sustenance behaviour along with gaining stakeholder support that provides
support in building a corporate image for a prolonged period of time and also improves
the promotion activities of the stakeholders. With the development in the business
activities, the practice of CSR has taken an eminent place in the global market and has
thus assisted the organisation’s businesses to get competitive benefits by implementing
a wide variety of CSR activities that provide advantage to the society as well as the
organisations (Hansen, et al. 2011).
The three basic principles of Corporate Social Responsibility activities as stated by
Crowther and Aras (2008) are namely sustainability, accountability and transparency.
The principle of accountability is concerned with the fact that firms recognise that its
actions have an impact on the external environment. It helps in recognising that the
organisations are an important part of wider community network rather than just the
proprietors of the organisation (Langhelle, 2010). In the terms of accountability as stated
by Dobers and Springett (2010), it is vital for the development of suitable measures of
environmental performance and reporting the activities of the firm. The principle of
transparency implies that the external impact of the activities of an organisation can be
determined by the fact the organisations reporting and relevant facts are not disguised
in that reporting. The transparency principle of CSR is of particular significance to
external users of such information as these handlers do not have the contextual details
and knowledge accessible to internal users of such information (Crowther and Aras,
2008).
5

Another principle of CSR activities is sustainability that can be defined as the capability
to remain maintained at a certain level and is a comprehensive approach towards
management of organisations that is mainly concentrated on long-term social and
environmental and economic value. According to Kuhlman and Farrington (2010),
Sustainability is majorly concerned towards the preservation of resources and
conducting operations in a manner that is favourable to long-term trading. Sustainability
takes into account the necessities of the future generations and is involved in the daily
life operations and activities of the companies. One of the main motives of sustainability
is to protect the individuals and environment so as to produce more products and
generate profit thereby. Sustainability maintains a balance between the use of
resources and supplies over the period of time or in other terms it provides assurance of
intergenerational equity (Hahn, 2013).
According to Orlitzky, et al. (2011), the concept of sustainability focuses on reduction of
waste and make it down to zero, prevention of pollution that can involve any kind of
pollution prevention techniques, adapting the use of clean energy, conservation of
water, reducing carbon emissions and thus move towards green planet, the use of
sustainable materials that will lead to generation of the sustainable products and thus
increasing energy efficiency.
There are 5 core principles of sustainability as stated by Ben-Eli (2015) are described
one by one. According to the first principle, sustainability ensures that the resource flow
in and outside the economy is nearly non- declining a legalized by physical laws. It
comes under the Material domain among the five fundamental domains for explaining
the principles of sustainability. The second principle in the economic domain states that
adopting a suitable accounting system for guiding the economy with full alignment with
the planet’s biological processes and thus reflecting complete biosphere pricing. The 3rd
principle underlying in the domain of life states that the vital diversity of all forms of life
in the environment is maintained. The principle underlying in the social domain is the
fourth one that focuses on maximising the degree of freedom and possible self-
realisation of all individuals without any person or a group adversely impacting others.
6

The fifth principle is in the spiritual domain that determines the essential attitudinal
orientation and offers a base for a universal code of ethics.
According to Sharma, et al. (2010), the sustainable business practices include
becoming intentional and aware about the sustainability concept that needs to be
included in the corporate strategies and reflect in the business goals. Another good
practice is training and development programs for the employees of the organisations
making them aware of environmental sustainability and the contribution organisations
can give in the conservation of resources (Schaltegger, et al. 2016). Another method for
practising sustainability is through conservation of water that can be done through
reducing opportunities for wasting the precious resource through the use of energy
efficient faucets. The development of a recycling program for the products like light
bulbs, electronic equipment, paper products and supplies can be done by taking help
from a waste management vendor for the creation of a recycling process. The
sustainable practice of chemical management encourages the use of green non-
chemical products for carrying out a number of business operations. The purchase of
energy efficient electronic products is environment-friendly that are EPEAT registered
for ensuring a higher level of efficiency (Lotich, 2013). Also, the development of
sustainability work policies and procedures for reinforcement of efforts. The policies at
the workplace that somehow contribute to sustainability can be adopted at a workplace
like the use of power down equipment for energy saving.
The ideas from the employees can be solicited for resource preservation. According to
Lafferty and Eckerberg (2013), the sustainable business practices are classified into 3
parts namely internal consistency, external credibility and forging external relationships.
The practices incorporated into internal consistency include the preparation of the
mission statement, the process of measurement and reporting on the progress and
performance of the work, waste reduction and teams for pollution prevention, the
materials that make the employees aware about social, environmental and economic
trends and lines of communication. In the external credibility, the sustainable
development report preparation can be practised and commitment can be given for
honest and accessible public relations and community efforts in the form of providing a
7

contribution to the community projects rather than just contributing monetary resources
to the charities (IISD, 2013). Another category of sustainability practice by International
Institute for sustainable development is forging external relationships by working with
innovative business associations, taking help from the expertise of non-profit
organisations, signing contracts with the appropriate corporations and with the help of
low-cost innovative changes making the workplace a fun place rather than a stressed-
out place.
8

CRITICAL ANALYSIS AND CASE STUDY
Siemens AG established 170 years ago headquartered in Munich, Germany is a
conglomerate industry manufacturing product in power generation technology, medical
technology, fire alarms, industrial and building automation, railway vehicles, PLM
software and water treatment systems. The company provides services such as
business services, project engineering and finance and in construction. The company
operates in 190 countries and has 372,000 employees as of 2017 data (Siemens plc,
2018).
The CSR activities adopted and implemented by Siemens are explained as follows-
 Providing support to universities and thus promoting technical and science
education is done by Siemens with the help of collaborating with top rank
international universities for developing groundbreaking technologies. The
company is working with Berkeley in the major research area of sustainability. It
also operates as a CKI alliance with MIT, Boston for developing new
technological innovations (Corporate citizenship, 2014)
 The Siemens scholarship program is aimed at encouraging and promoting
scholarship programs for promoting engineering education among skilled
students of less privileged families. The company provides limited scholarships to
the deserving students for pursuing a career in engineering, manufacturing and
research and development
 Up gradation of Industrial Training Institutes (ITI) that are government owned that
provides hands-on practice on latest technology like industrial automation.
Industrial drivers and computer numerical controls etc. The ITI’s have machinery
and equipment for the students to practice and learn about the new technology
which is provided additional aid by Siemens by providing latest machinery and
providing the knowledge about their operations to the faculties.
 Siemens provides aid in primary health care and health education to underserved
communities by rendering health care services, referral services, and health-
seeking behaviour and facilities linkages. The initiatives for promoting health care
9

services are executed in partnership with nonprofit organizations, government,
local bodies and several welfare communities (Corporate citizenship, 2014).
 Supporting refugees through several rescue teams. For example, SRE-DE was
formed for providing space for the refugees throughout Germany at 15 locations.
Special 6 month training courses or vocational training programs are offered to
the refugees. In Austria, 3 buildings were made available to Viennese refugee aid
organization proving accommodation to around 300 refugees in critical situations.
 The organization has been working in collaboration with St James settlement at
Eco Park WEEE recycling centre situated in Tuen Mun for recycling and
refurbishing the home appliances and donate those to the needy. This is done by
the staff members and the business partners who are the main participants.
 The company considers its employees as the valuable assets and thus offers
more retirement benefits than actually set by the company standards that include
voluntary contribution that further improves the retirement protection of the
employees and duly discharged its MPF obligations. The company always
encourages its employees to provide support to the societal needs by joining and
contributing to charity events and activities (Corporate citizenship, 2014).
SUSTAINABILITY
For the organization Siemens, sustainability means performing in the interest of future
generation at the best level possible in context to the environment, the society and
company’s business. The activities of Siemens in the United Kingdom are governed by
fundamental resolve for acting responsibly on behalf of the upcoming generations. The
company takes full account of the challenges of sustainability and the opportunities for
creating value and long-lasting growth. Also, by providing assurance that the
organization considers the financial and non-financial performance of the company
strategies and operations. The company Siemens in the UK follows 3 sectors of
sustainable development as defined and formed by the company at the global level and
effectively managed by the team in the UK. These areas are Environment, Business
and Society (Sustainability, 2018).
10

Environment
The company having an environmental portfolio and environmental platforms, the
company makes a significant contribution for resources and climate safety through
decarbonisation strategy that is working towards minimizing the emission of carbon
dioxide and thus reduces the impact of global warming. The company is going carbon
neutral by 2030. Also, it has adopted programs and initiatives for conservation of
resources like “Serve the Environment” program that is aimed towards minimizing the
negative impact of Siemens operations on the environment, use of smart waste
management methods, responsible water management (Melville, 2010). Product
stewardship that involves creation of products that are energy efficient, economical and
environmentally friendly through the company’s internal eco-design process and life
cycle analysis that ultimately benefits the environment as well as customers.
Figure 1: Carbon Neutral Mission, 2030
Source:
[https://www.siemens.com/global/en/home/company/sustainability/decarbonizatio
n.html]
Society
11