I certify that this dissertation is my own work and contains no material, which has been accepted for the award of any degree or diploma in any institute, college or university. Moreover, to the best of my knowledge and belief, it contains no material previously published or written by another person, except where due reference is made in the text of the dissertation.
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Table of content
1. INTRODUCTION 3 2. CSR 4 2.1. Definition 4 3. History of the selected businesses 5 3.1. Accor Hotel Group 5 3.2. Colgate – Palmolive Company 5 4. CSR Practices 6 4.1. Accor Hotel Group 6 4.2. Colgate – Palmolive Company 7 5. Discussion 9 5.1. Accor Hotel Group 9 5.2. Colgate – Palmolive Company 12 6. Conclusion 15 7. REFERENCE LIST 16
INTRODUCTION
Corporate social responsibility (CSR) is a management initiative in which companies incorporate environmental and social issues into the relationships with stakeholders and also in their business processes. By implementing CSR practices, a company thrives on achieving a sense of balance between the triple bottom line (world’s social, environmental and economic needs) and the company’s competitiveness (Madrakhimova, 2013).
Now at days it is becoming very clear that CSR can no longer be associated to the amount of money a company gives to charity, but it should relate to the actions made by companies in order to improve the world’s quality of life. It is also becoming clearer that companies’ decision making does not only affect the business but the society as a whole.
After a thorough analysis of different businesses, the Accor Hotel Group and the Colgate – Palmolive Company have been chosen for the development of this research paper. The following chapters will tell the companies’ history, review the companies’ CSR practices and lastly, examine and evaluate the corporate social responsibility practices from each of the companies as well as provide suggestions on ways to improve.
CSR
This chapter will try to analyse and define the concept of CSR.
Definition
According to Weber (2008), there is not one single “correct” definition of what CSR really is. On the other hand, Com (2001) assures that Corporate Social responsibility is ‘‘a concept whereby companies decide voluntarily to contribute to a better society and a cleaner environment’’ by incorporating social and environmental issues into their daily business operation as well as into their relationship with their stakeholders. CSR has been in a constant evolution (Bebbington, 2001), to the point where now at days every corporation has its “own” definition for this term (Hack, Kenyon & Wood, 2014), and even expanding to the point where research on the business benefits derived by CSR practices is done (Weber, 2008). Business benefits can be divide into 5 main areas which are: A positive image and reputation of the company; it encourages employee recruitment, motivation and retention; cost savings; higher market share and sales which translates to an increase in revenue; and finally risk reduction on CSR related topics (Weber, 2008).
History of the selected businesses
This chapter will briefly discuss the history and company’s profile of the Accor Hotel Group and the Colgate – Palmolive Company.
Accor Hotel Group
Accor is a French hotel group established in 1967 by Paul Dubrule and Gerard Pelisson under the name SIEH (Societe d’investissement et d’explotation hoteliers). The Novotel in the northern French city of Lille was the group’s first property and seven years later, the budget brand Ibis is launched which now at days has become one of the group’s most popular brands. The company continued its expansion by acquiring the Mercure and Courtepaille brands in 1975 and then in 1980 launches the luxury brand Sofitel. In 1983 the SIEH changes its name to the Accor Hotel Group and in 1985 the ultra-budget hotel Formule1 is launched. Now at days, the Accor Hotel Group’s business portfolio consists of 11 brands and more that 3500 rooms in about 92 countries. Colgate – Palmolive Company
Colgate – Palmolive Company is an American multinational corporation dedicated to the production and distribution of personal healthcare household and veterinary products. The Colgate – Palmolive Company was created in 1806 by William Colgate when he opened a candle, soap and starch factory in New York under the name of William Colgate & Company. In 1873, the firm introduces its first toothpaste, but it is not until 1908 that the company starts mass selling of tubed toothpaste. In 1953 the name Colgate – Palmolive Company was established after the merger of Palmolive and the soap manufacturer Peet brothers bought the Colgate Company. Now at days the Colgate – Palmolive Company’s business portfolio consists of 11 brands which are distributed all around the globe.
CSR Practices
This chapter will disclose the CSR practices of the Accor Hotel group and the Colgate – Palmolive Company.
Accor Hotel Group
In 2012, 20 Years after the Rio Summit, Accor launched the Planet 21 sustainable development program which is a direct representation of Agenda 21 which was developed in the 1992 summit by 173 heads of state (Accor Hotel Group, 2015).
Accor’s Planet 21 sustainable development program is grounded on 7 pillars which are: Health, Nature, Carbon, Innovation, Local, Employment and Dialogue (Accor Hotel Group, 2015).
In today’s world, sanitation, environmental and food-related threats are plentiful, that’s the reason for Accor to make Health its first pillar. With this pillar, Accor strives to build environmentally friendly aesthetic comfortable rooms. Promote responsible eating because of the hotel’s understanding that they can be partially accountable for alimentary problems and thirdly, to prevent diseases by training employees to raise awareness within the hotel’s guests about ways to fight HIV/Aids (Accor Hotel Group, 2015).
Planet 21’s second pillar is nature, where the hotel’s objectives are to reduce the water use, stimulate waste recycling within the company’s properties and last but not least, the protection of the world’s biodiversity by implementing the “Plant for the planet” reforestation project which its basic principle is to offer guests to re-use their towels for more than one night and with the 50 % of the bills savings the laundry makes, reforestation projects are funded (Accor Hotel Group, 2015).
Carbon is the third pillar of Accor’s sustainable development program. This pillars seeks to reduce the energy consumption and CO2 emissions from their owned, leased and managed hotels by using efficient appliances and low-consumption bulbs. Furthermore, Accor is emphasizing greatly in the increase of use of renewable energy by using biomass, geothermal and solar panel generated energy.
Innovation is Accor’s fourth pillar. This pillar’s objectives are, to encourage eco-design in order to respect the environment, promote sustainable building for new constructions focusing greatly in the building’s environmental performance with the intention of minimizing the environmental impact the building may have and also introduce responsible hotel offers and technologies (Accor Hotel Group, 2015).
Accor cares for the society and a way to help the community is by accomplishing the aims of the fifth pillar (Local). The first objective of this pillar is to protect children from abuse which started in 2001 by combating child sex tourism and then in 2012 it developed further due to the signing of an agreement with ECPAT France which is a global network of organizations that work together for the elimination of child prostitution, pornography and trafficking for sexual purposes. The second part of the Local pillar is on how the hotel group supports and promotes responsible purchasing practices while the third commitment is the protection of ecosystems because the industry is concerned and understands the importance of taking action in order to ease this problem (Accor Hotel Group, 2015).
Employment is the sixth pillar and it also includes 3 quantifiable commitments which are as follows. To support employee growth and skills being its main target the promotion of the group’s personnel. The second objective is to become more workforce diverse which means that the company will make from diversity an asset. Stress due to work reasons is a problem that now at days society constantly encounters, for this reason, the third commitment of this pillar is to improve the quality of work life.
Planet 21’s seventh and last pillar is Dialogue which refers to the transparency with which the company is steered, secondly, how the company engages the owned, managed and franchised hotels and thirdly, the importance of sharing the hotel’s vision and approach on sustainable development with its stakeholders (Accor Hotel Group, 2015).
Colgate – Palmolive Company
Caring, global teamwork and continuous improvement are Colgate – Palmolive’s core values and base for their sustainability program. The program’s main objective is to make sure the company’s business grows consistently and responsibly while benefiting their employees, consumers, shareholders and other stakeholders while looking out for the well-being of the future generations (Colgate-Palmolive Company, 2014).
Colgate’s long-term sustainability strategy is concentrated into three main areas, respect for people, the company’s performance and respect for our planet. The respect for people strategy involves consumers, business partners, shareholders, employees (Colgate people) with which the company has committed to value the diversity in their workforce, encourage education and training, support work/life balance, keep Colgate people and their families healthy, making occupational health and safety a top priority, combating global pandemics by creating committees, providing education and awareness and finally helping people access treatment. The respect for people policy also includes the communities where Colgate – Palmolive makes business and thus has created programs to promote oral health and hand washing as well as economic support for education around the world (Colgate-Palmolive Company, 2014).
Company performance is the program’s second pillar and Colgate assures that it is more than simply just a financial report but is more about the company’s commitment to grow the business with more sustainable and innovative products that are safely tested and will make the consumers have healthier and more pleasant lives. The company strives to alter existing products or create new ones in order to reduce their impact on the planet by improving the biodegradability of the ingredients as well as engaging suppliers towards green chemistry. Colgate – Palmolive has made a self-policy to minimize and eventually eliminate all animal testing for all consumer goods and the creation of substitute non-animal testing methods with the endorsement of People for the Ethical Treatment of Animals (PETA).
Operating in today’s world, requires companies to be more conscious and focused on preserving the planet for the future generations. For this reason, Colgate – Palmolive’s third pillar on their sustainable development program is respect for our planet. In this pillar, the company’s first commitment is concerned with the reduction of energy use and greenhouse gas emissions. This commitment is addressed firstly by understanding the REAL carbon footprint produced by the company’s merchandises when produced and sold and also assessing ways to reduce it. Another way of reducing the greenhouse gas emissions is by changing the way the company transfers products to its consumers. Colgate – Palmolive is increasingly using intermodal transportation which is said to be more efficient and sustainable. Yet another approach the household producing company is applying, is the use of renewable energy such as solar power and fuel cells, which the company has been implementing worldwide (Colgate-Palmolive Company, 2014).
Water is one of the most basic needs for life and businesses also understand its importance. For this reason, the pillar’s second commitment is about water conservation, access and awareness. The Colgate – Palmolive Company is devoted on reducing the water use in all the production plants worldwide which is accomplished by improving the assessment of water use and also with the treating of water for reuse (Colgate-Palmolive Company, 2014).
In terms of access, the company has partnered with water for people in order to support the NGO’s motif of helping people have safe continuous water forever (Waterforpeople.org).
Discussion
This chapter will discuss the positive and negative aspects of the CSR practices conducted by the Accor Hotel Group and the Colgate – Palmolive Company. This chapter will also focus on ways that the previously mentioned practices can be improved by both companies.
Accor Hotel Group
According to the research made by Font, Walmsley, Cogotti, McCombes & Häusler (2012), the Accor Hotel group is ranked as the number one company out of ten in the Disclosure-Performance gap. This means that the French hotel group has not only the highest number of CSR policies but is also the most consistent company in the implementation of the mentioned policies. For this reason, Accor’s sustainable development program planet 21 is a perfect example of to what extend the hotel industry is accomplishing its role on the development of corporate social responsibility practices.
After a thorough reading and examination of the Accor Hotel Group’s CSR report, the information has shed light in the identification of positive and negative aspects of the CSR practices implemented by the Hotel Group as well as suggestions in order to improve the mentioned.
As previously stated, Planet 21 is divided into 7 main pillars (Health, Nature, Carbon, Innovation, Local, Employment and Dialogue) which each of this pillars is subsequently divided into 3 commitments (Accor Hotel Group, 2015).
The researcher believes that the company addresses the health pillar with the right approach (Nishinaga, Lane & Davis, 2013). But then, he is certain that, the bigger the hotel chain is, the more difficult is to adapt to change. As an example of this, the first commitment of this pillar is to ensure healthy interiors by making hotels in the Accor network use at least one eco-labelled product, yet the latest CSR report published by the company shows that 95% of the properties have achieved this, which is good but it then makes stakeholders question the reasons of not reaching 100% being this a very “simple” objective. In the other hand, the examiner believes that the prevention of diseases which is the pillar’s third commitment is well addressed in “a hotel’s position”, by implementing condom vending machines throughout the group’s properties and also by imparting training to its employees on the prevention of STDs. Even though these implementations are on a micro level, I believe that this is the way in order to start change in a macro level.
The second pillar is Nature, where the French company has made major efforts since 1994 with the creation of the group’s environment department. Reduce the water use and expand the waste recycling are two of the commitments of this pillar which according to the researcher’s perception are well-structured and achievable due to the fact that the results are totally controllable by the properties. The pillar’s third commitment is to protect the biodiversity, in which the hotel group has accomplished great results with the creation of the program “plant for the planet” with which the planting of more than 3.5 million trees has been funded by the laundries’ bill savings by simply giving guests the option of reusing their towels for more than one night. The researcher is certain that this initiative not only makes the company aware of the positive change produced by planting trees, but it engages the customers which makes them take responsibility on the future of our environment (Flammer, 2013)
It is public knowledge that hotels use vast quantities of energy and also emit big amounts of CO2 due to the 24/7 service they provide. For this reason, the third pillar is carbon, where according to the examiner, the hotel group has set its commitments according to their accountability on the environmental impacts they produce.
As previously mentioned, a company’s size has a great impact on the adaptability to change and it is even greater in the innovation field. According to the definition of innovation, the 3 commitments set by Accor for the fourth pillar have no real connection with this concept. Accor’s commitments on this field are merely a demonstration of the slow adaptability the hotel industry has to “new” standards and regulations. The researcher believes that Accor hasn’t realized that the best innovation they have done so far, is the creation of Planet 21 which has set a great standard for the industry and possibly many other businesses.
Child sex tourism (CST) is a latent problem in today’s world and especially in developing countries due to the lack of governmental aid in order to develop (Davy, 2013). Companies around the world have taken different actions, and Accor has not stayed behind with this problem. The researcher believes that the hotels positions around the world concerning this problem is very sensitive because hotels as institutions aren’t promoting CST but on the other hand, it may occur that employees from this institution do, the other problem is that sometimes hotels end up becoming hosts without wanting to be one, simply because of the hotel’s business nature of lodging. Accor’s signature of ECPAT’s child protection code of conduct, the introduction of a manual and the training of the staff on recognizing a suspected case of children sexual exploitation, makes the author believe that the hotel group is taking all the possible actions on this matter.
The Local pillar is a mix between social and environmental commitments. The first commitment being the above discussed (protect children from abuse), the second commitment is support responsible purchasing practices and the third to protect ecosystems. The researcher believes that the local pillar is approached in the wrong way because even though the commitments from this pillar are practices that every business should have, the expectation of this pillar was more about the development of the local community.
Accor’s sixth pillar is Employment where Accor has focused efforts on the social aspect with special focus on the development of the group’s employees. Businesses rely greatly on their employees, and the hotel industry is no exception, for this reason, Accor has developed this pillar with the intention of supporting employee growth and skills via training, also making the diversity of its workforce an asset and finally improve the quality of work life to the extent that Accor has been included several times in the best places to work list made by the renowned organization Great Place to Work (Great place to work, 2015).
Accor Hotel group’s last pillar is dialogue where the company promotes their CSR practices within their franchisers and suppliers. According to the study conducted by Walmsley, Cogotti, McCombes & Häusler (2012), Accor ranks as the number one hotel group out of ten on voluntarily publicly disclosing their CSR results which translates to the pillar’s first commitment of conducting business transparently. According to the researcher, the dialogue pillar is perfectly implemented because the second and third commitments (Engage our franchised and managed hotels and Share our approach with suppliers; on that order) added to the first one, shed light on the understanding that the hotel group acknowledges that in order to generate development through their CSR practices, this can’t only stay in the corporate level but it should spread to all the company’s stakeholders (Weber, 2008).
After a thorough analysis of the Accor Hotel Group’s CSR practices, an extensive reading on corporate social responsibility and the researcher’s personal opinion, the following conclusion has been reached. Accor is a company that has understood the importance of having a reliable, practical and logical sustainable development program. The company comprehends that CSR has been in a constant evolution since its inception and for this reason, Accor has adapted its practices to the needs of today’s world. In accordance with the literature, the researcher claims that Planet 21 is an exceptional sustainable development program but is aware that the company could raise their sustainable development standards in order to achieve more significant results in certain fields and on the other hand, better develop some of its pillars such as the sustainability one.
Colgate – Palmolive Company
The Colgate – Palmolive Company is known worldwide for their household, personal care and veterinary products, but it is also very known for their corporate social responsibility activities to the extend where Forbes mentions it in the top ten companies with the best CSR reputations (Smith, 2015).
Colgate’s sustainable development program is divided into three main pillars (Respect for people, the company’s performance and respect for our planet) which are clearly divided into the triple bottom line’s dimensions of Social, environmental and financial performance (Slaper & Hall, 2011).
According to researcher, the respect for people pillar which is concerned with social issues is very well managed by the company because it includes everyone, the Company’s employees, consumers, business partners, shareholder sand the community. The commitments of this pillar are divided according to whom they are focusing in. The first commitments Colgate – Palmolive has are towards their employees (Colgate people) where the company accomplishes its target of being an employer of choice by stimulating, training, recognizing, overpowering the Colgate on a exciting and motivating work environment while also encouraging a healthy work life balance. The researcher believes that Colgate understands the importance of its employees for the company’s well- being and for this reason the company does major efforts in this field.
The second set of commitments in this pillar are focusing towards the community development. Colgate – Palmolive has been known for its involvement in many programs around the globe such as the “Bright smiles, bright future” (BSBF) program which aims to improve and educate children and their families on the importance of oral health. The researcher believes that the company is doing a great job on creating this type of programs which help with the development and well-being of the communities and also show that the company is working not only for the revenue, but for the future generations. On the other hand, the researcher also understands that the Colgate – Palmolive Company is benefiting from such activities. As previously mentioned, according to Weber (2008), companies benefit from their CSR practices and this is the case of the BSBF program which creates a positive effect on the company’s image and reputation around its stakeholders. Another visible benefit is the marketing created by this program because Colgate becomes the “top of mind” of oral health products for the “helped community” which makes the researcher question the real motivation of this practices but then we would be entering a philosophical discussion on whether the intentions or the outcomes are the most important.
When talking about the community, Colgate – Palmolive not only reefers to human beings but it also extends to animals. The company through its pet care product section helps pet shelters by selling their pet food at a discounted rate which has helped maintain these shelters on business and consequently has lend a hand on the adoption of more than 7 million dogs and cats since 2002 which according to the researcher is an remarkable practice because the company gives pets the importance they deserve.
Colgate’s second pillar is the company’s performance which as mentioned in the chapters above, is much more than just a financial performance report. The first commitment is consumer – driven innovation which in accordance to the literature on innovation, Colgate is doing sustaining innovation which means that new products or improvements are based on listening to customers in order to satisfy their needs (Nielson, 2013).
The next commitments of this pillar are improving product sustainability and product safety testing, which the researcher finds it odd because this pillar was meant to focus solely on the economic side of the TBL. The researcher considers that this commitments should be placed in different pillars because they talk about environmental and social sustainability. On the other hand, the researcher believes that it is very impressive that the company dares to have performance as the second pillar of the company’s sustainable development program because society, could consider that the reasons of doing CSR practices are exclusively done for monetary benefits, but it is the researcher’s understanding that Colgate – Palmolive understands that environmental and social practices have major roles in a company’s CSR but in order to achieve these, a business needs to be economically sustainable.
Respect for our planet is the third pillar in the sustainable development program conducted by Colgate – Palmolive. Companies from various different industries have understood that a constant and disproportionate use of the world’s natural resources is jeopardising the future of our survival and for this reason, corporations such as Colgate – Palmolive are taking measures in order to address climate change for the prosperity of the future generations (Funaru & Funaru, 2013). As mentioned in the chapters above, the researcher believes that macro changes concerning environmental sustainability occur after policy changes are made in the micro level, which according to the American multinational’s 2013 sustainability report were achieved. The multinational company starts addressing the “environmental” pillar with the commitment of reducing a 20% on energy use and greenhouse gas emissions by 2015 which according to the latest (2013) report, the company has reached a 17.1% and 16.3% reduction accordingly. This information sheds light on the understanding that the company has done an extraordinary job with this commitment because they established a SMART (Specific, Measurable, Achievable, Realistic and Time bounded) goal and are striving to achieve it (Bara, 2010). For the company’s commitment on waste reduction is almost the same case as the previously mentioned, with the slight difference that this goal was achieved before the established time bound. Even though Colgate is making enormous efforts in order to become a more environmentally sustainable company, it is the researcher’s believe based on the 2013 report that the company could and should focus more efforts on implementing renewable energy throughout their manufacturing plants and corporate buildings and not only “evaluating” energy sources (Colgate-Palmolive Company, 2014).
After a thorough analysis of the Colgate – Palmolive Company’s CSR practices, the researcher’s personal opinion backed on the reading of corporate social responsibility literature, the following conclusion has been reached. The American multinational has made major efforts on adopting and implementing CSR practices to its core values and day to day business activities. The only question that the researcher is left with, is if they are doing their maximum based on their economic resources and all-region reaching capacity.
Conclusion
Businesses have embraced the key role on the development of CSR practices due to the understanding of their respective industries’ distinct and singular positions in today’s world. From a major city’s downtown to the most rural areas, hotels and multinationals are doing business everywhere in the globe and for this reason, businesses are major witnesses of the world’s social, environmental and economic problems. Yet, various issues were found while researching, such as the fact that there is no real definition for CSR which leads to companies having their own understanding of the concept. Another problem found is that CSR has become a trendy concept which some companies exclusively think of it as a way to have higher profits and not as an aid to the current situation of the world. The researcher believes that certain CSR practices should become international minimum requirements and governments around the globe should have more input in order to make Corporate Social responsibility practices have a greater impact in the world as a whole by making transparency and disclosure of social, environmental and economic practices a requirement (Madrakhimova, 2013).
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