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Companies falling short on 'CSR'


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Children plant trees as part of a BP-sponsored conservation inititiative, but many people remain skeptical about corporate social responsibility.
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London, England (CNN) -- Businesses still have a long way to go to convince workers and customers of their commitment to corporate social responsibility, according to recent research.

The top 100 companies on the London Stock Exchange gave less than one percent of their pre-tax profits to charities and community projects last year, the annual "Giving List," compiled by the UK's Guardian newspaper, reported this week.

Although the total value of donations was up seven percent from last year to £872 million ($1.6 billion), only 34 FTSE 100 companies gave away more than one percent. The bottom 14 companies donated less than 0.01 percent of their earnings.

International insurance company Royal and Sun Alliance topped the list with a donation of 8.7 percent of earnings, including a total cash donation of £1.54 million ($2.84m), followed by media company ITV (6.8 percent) and bank Northern Rock (five percent).

The biggest individual donations came from pharmaceuticals giant Glaxo Smith-Kline with £144 million ($266m), or 2.3 percent of profits, followed by oil companies Shell (£57 million/$105m/0.5 percent) and BP (£50 million/$92.5m/0.7 percent).

But the contribution of Britain's 860,000 businesses amounted to just 4.3 percent -- down from 4.8 percent -- of total annual charitable income.

British big business is also failing to earn public trust, according to a MORI survey conducted to accompany the list.

Just 15 percent of those polled thought large corporations had a genuine commitment to social responsibility. Almost 10 percent rejected that notion, while a further 70 percent had doubts about business behavior.

More than 80 percent thought companies should make more of an effort to tell people what they are doing.

Meanwhile, a recent survey compiled by recruitment firm Monster revealed that a third of shop floor workers didn't understand the concept of corporate social responsibility while only 16 percent were aware if their company ran an active "CSR" program.

"This survey highlights the urgent need to spread the CSR philosophy beyond boardrooms to the shop floor. Corporate Responsibility should not take place on a 'need-to-know' basis -- it exists for communities within companies as well as outside them," said Brendan May, head of CSR at PR firm Weber Shandwick.

"There is increasing evidence that people want to feel good about where they work. If they don't know about the positive things their company does they can't tell others. If you want your people to be your ambassadors, it's essential to arm them with the stories you want them to tell."

There is, however, evidence that a more positive attitude towards CSR is taking root at senior levels of management.

According to the Ashridge Strategic Management Centre's 2004 management index, nine out of 10 senior executives believed it was important that their company had a good corporate responsibility record. More than three-quarters of them also believed their company acted in a socially and environmentally responsible way.

Worldwide more than 1,500 companies produced non-financial reports in 2003, while the emergence of indices such as FTSE4Good and the Corporate Responsibility Index and Web sites such as ethicalcorp.com have created a business environment in which companies' CSR record is under scrutiny.

"Some parts of the business community are clearly taking their corporate social responsibilities seriously," Karl Wilding of the National Council for Voluntary Organisations told the Guardian. "However, many are still seeing CSR as a cost rather than an opportunity."


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