Approach to Corporate Social Responsibility (CSR) Assignment Sample

👉 Topic: Approach to Corporate Social Responsibility (CSR)
👉 Document Type: Accounting Assignment Sample
👉 Subject: Management Accounting
👉 Number of Words: 3000 words
👉 Pages: 12 pages
👉 Referencing Style: APA

Growing consumer demand for sustainable products and ethical business practices has pushed global beauty brands to focus on sustainability through CSR initiatives (Kolling et al., 2022). More global beauty brands are emphasising environmental issues, product design sourcing natural or organic materials, vegetables as raw materials and using biodegradable and recyclable packaging (Culliney, 2022).

In South Korea, Innisfree has positioned itself as a sustainable cosmetic brand and its approach towards CSR is focused on sustainability through community engagement programs like “Green Christmas”, “PlayGreen Campaign", ethical & and eco-friendly sourcing of ingredients from Jeju Island, engaging in “Fair Trade” with local farmers and forest conservation programs in Jeju (Innisfree, 2023).

Word Count: 109

CSR Impact on External Stakeholders

Two crucial external stakeholders for Innisfree are; Local communities and Environmental Organizations (Amorepacific, 2022).

In the case of local communities, Innisfree's CSR has a positive impact through the ethical sourcing of natural ingredients which are locally harvested. Contributing to the economic and social well-being of local farmers through engaging in fair trade (Innisfree, 2023).  To further enhance the positive impact, Innisfree can offer opportunities for training and education to local farmers which can enhance their skills, and offer better livelihood opportunities.

However, the negative impact of such a sourcing policy is overharvesting and harm caused to the local ecosystem causing disruptions to the livelihood of local communities (Liu, 2022). To mitigate this risk Innisfree can promote sustainable harvesting practices for the long-term health of the local ecosystem & and natural resources, by closely partnering with the local communities and environmental experts. Innisfree can put a limit on the quantity of materials harvested and enforce conservation measures across its supply chain (Liu, 2022).

In the case of environmental organizations, the eco-friendly packaging CSR policy of Innisfree can have a positive impact on them by addressing their objectives of eliminating plastic wastage and promoting sustainable practices (Martins & Marto, 2023). To further enhance the positive impact, Innisfree can partner with them in environmental campaigns, amplifying their impact.

However, if the manufacturing and supply chain practices of Innisfree result in environmental pollution then the company might face backlash from environmental organizations (Goldberg, 2023). To mitigate this risk, Innisfree can conduct regular sustainability audits and report the findings ensuring transparency along with highlighting the corrective actions taken to develop trust with environmental organizations. 

Word Count: 243

CSR Impact on Internal Stakeholders

The internal stakeholders of Innisfree are employees, business partners and shareholders.

1. Employees:

Positive Impact: Through CSR Innisfree can have a positive impact on its as working for an organization that has adopted sustainability can boost employee morale and engagement as they feel more satisfied to work in a socially responsible organization (Kolling et al., 2022).

Innisfree can further enhance the positive impact by investing in employee engagement programs that are linked to its CSR initiatives, and by requesting the employees to volunteer in its sustainability campaigns.

Negative impact: Risk of higher workload due to expectations to be associated with sustainability initiatives of Innisfree as volunteer or reporting, that cause stress and burnout if not managed effectively (Kolling et al., 2022).

2. Business Partners:

Positive Impact: Commitment to ethical and sustainable sourcing, promoting Fair trade, establishing long-term partnerships with business partners having shared values, and reputation of the company's ethical and sustainable practices & and products increases marketability. Innisfree can enhance the positive impact of its CSR on its business partners through open & and transparent communication with business partners, supporting them through training & and resources for capacity building and regular performance assessment of its business partners (Kolling et al., 2022).

Negative Impact: Higher compliance requirement on business partners to ethical sourcing, environmental standards and labour practices. Increasing supply chain complexity puts more financial burden on business partners affecting their profitability. These risks can be mitigated through financial assistance and incentives to business partners, offering flexible timelines for compliance and through collaborative sustainable goal setting (Macassa et al., 2020). 

3. Shareholders:

Positive Impact: The CSR initiatives of Innisfree towards sustainable practices and ethical governance can help shareholders to get long-term value creation through higher brand loyalty, minimum risk exposure and better market positioning. To enhance these positive impacts for its shareholders, Innisfree can undertake transparent and regular reporting on the outcome of its CSR initiatives.

Negative impact: There are certain short-term costs associated with CSR initiatives which don't offer immediate returns that might be concerning for shareholders.  The negative impact on shareholders can be mitigated by actively engaging with shareholders to convince them of long-term benefits & and strategic importance for their share value (Macassa et al., 2020).

Word Count: 344

Business Competitor

The most likely competitor for Innisfree brand is “The Face Shop”, which is a major Korean skincare products and cosmetics manufacturer which also claims to use natural and organic ingredients in its products. It’s a subsidiary of LG Household & Health Care (LG H&H ESG Report, 2022).

The Face Shop also focuses on using natural ingredients and sustainability initiatives are aligned to promote eco-friendly sourcing and manufacturing practices. The brand also has switched to eco-friendly packaging and actively undertakes reverse container recovery (The Face Shop, 2023).

However, The Face Shop has faced issues concerning to being engaged in Greenwashing whereby the company marketed the products overstating their environmental benefits. Consumers have also critiqued that certain products of the brand contain synthetic ingredients and there is a lack of transparency in the ingredient sourcing (The Derm Review, 2023). It is alleged that the company has undertaken animal testing for launching its products in China and The Face Shop still uses significant plastic in its packaging and branding (Cruelty Free Only, 2022).

Word Count: 153

Performance Measures - Financial 

The Profit Margin is an important financial parameter to measure the success of Innisfree. A positive profit margin for Innisfree can indicate that the company is financially profitable while actively engaging in sustainable practices which is important for the long-term success of the continued implementing of its CSR initiatives. The positive profit margin indicates the effectiveness of cost management and positive revenue generation that leads to the effectiveness of resource allocation by Innisfree. This is a key metric for shareholders and investors to assess how much returns the company can provide making it an attractive proposition for investment both financially and ethically. Profit Margin and allows competitive positioning and strategic decision-making for Innisfree. As of 2022, Innisfree had a net profit of 22.49 billion South Korean Won which is 8.24 billion Won higher than in 2021 (statista.com, 2023).

Word Count: 131

Performance Measures – Non-Financial

1. Reduction in Carbon Emissions: The carbon emission reduction is directly associated with Sustainable Development Goal (SDG)- 13, which is related to taking urgent steps to combat climate change and its effects (United Nations, 2023).

In terms of Innisfree, reduction of carbon emission is crucial since the company has committed to adopting sustainable practices and all its operations such as manufacturing, running stores, warehousing and distribution have a major environmental footprint (Amorepacific, 2022). Reducing the carbon emissions can allow it to mitigate the risk of climate change which will also reflect Innisfree's commitment towards achieving the SDG-13 objective.

2. Ethical Sourcing and Transparency in the Supply chain:  This measure is directly linked to SDG 12 which emphasises responsible consumption and patterns for production (United Nations, 2023). Innisfree has positioned itself as an organization that lays great emphasis on ethically sourcing its ingredients from Jeju Island in Korea. It claims to have a strong and sustainable supply chain (Amorepacific, 2022). By monitoring this parameter, it will be possible for Innisfree to evaluate how well inclined are its ethical sourcing policies and sustainable supply chain practices to achieve the SDG 12 objectives. This will help the company to mitigate the risks of negative environmental & and social impact due to its sourcing and supply chain activities.

Word Count: 204