Corporate citizenship - SUM: Sustainability Management Wiki

Authors: Ann-Kathrin Sieberns, Nick Fischer, Joern Hoppmann, Lisa Gerdes-Röben, Marleen Christ
Last updated: March 19, 2023

1 Definition and relevance

The term “Corporate Citizenship” (consecutively abbreviated by CC) describes firms’ civic or social engagement activities by which it contributes to the common good and seeks to portray itself as a “good citizen.” The definition is based on the broader concept of citizenship, which the Cambridge Dictionary describes as “the status, rights and duties of a citizen, especially of a particular country, etc.”. ¹ Corporate Citizenship transfers the concept from the individual to the firm level, pointing out that, similar to individuals, firms can drive social causes, e.g., as they donate money or systematically encourage volunteering by employees. In this sense, Corporate Citizenship is part of the greater concept of Corporate Responsibility and includes the concept of Corporate Philanthropy. At the same time, it differs from concepts of Corporate Social Responsibility and Corporate Sustainability as Corporate Citizenship describes activities that are usually not directly tied to a company’s core business. While several authors have pointed out that great Corporate Citizenship includes anchoring social and environmental issues in firms’ products, business models, and strategies, most frameworks that operationalize the concept describe Corporate Citizenship as an add-on strategy and use the concepts of CSR and CS to describe more strategic sustainability-oriented firm activities instead.

Definition

“Corporate citizenship is the entire coordinated commitment of a company to solving social problems that follows a uniform strategy and goes beyond the actual business activity.” ²

“Corporate citizenship refers to activities with the help of which companies themselves invest in their social environment and assume joint responsibility for regulatory policy…” ³

“Corporate citizenship is how a company exercises its rights, obligations, privileges, and overall corporate responsibility within our local and global environments. The measurement […] of corporate citizenship is defined by how well companies responsibly manage not only their financial performance but also their environmental and social impact. […] great corporate citizenship goes beyond a focus on addressing surface-level sustainability efforts or corporate philanthropy.” ⁴

Table 1: Definitions of Corporate Citizenship in the literature

2 Background

The basis of Corporate Citizenship is the observation that companies exist in symbiosis with their environment. The social, civil and political environment affects them and their actions, in turn, affect the social, civil and political ecosystem.

While, especially in the early 20th century companies strongly focused on maximizing their returns and revenues, the demands of society concerning companies have gradually shifted. Sustainability became more and more the focus and thus the idea matured to make not only the individual citizen but also companies responsible for doing business more sustainably and taking on social responsibility. “Consequently, the question now is: ‘What is their role in our global economic and social system?’ Providing goods and services and making a profit for their shareholders are important, but in that process, they also have responsibilities to their stakeholders and the wider society. Companies are in fact corporate citizens of society; just as individuals are private citizens.” ⁵

Due to this changed focus in society, the terminology of CC has seen a massive growth in usage. Whilst the term first occurred in the realm of management practice in US business circles in the 1980s, it has since begun to enter the language of the global business community. ⁶ Moreover, CC transcended the boundaries of the business community and developed into a topic of high relevance for politics and the global economy. Therefore, the UN Global Compact presented to the World Economic Forum at Davos in 1999, sought to create a voluntary international CC network to bring together private-sector and other social actors. ⁷ Only three years later, during the World Economic Forum in New York in 2002, the joint statement on ‘Global Corporate Citizenship – The Leadership Challenge for CEOs and Boards’, was signed by CEOs from 34 of the world’s largest multinational corporations. ⁸ The Companies should thus be held accountable to engage themselves in social investment, philanthropic programs, and public policy, introducing CC as an integral part of a company’s policy.

Besides those global political landmarks for CC, a further indicator of the proliferation of CC is the remarkable quantity of academic work specifically dedicated to that topic. For example, from 2001 to 2017 there had been a dedicated ‘Journal of Corporate Citizenship’, that published articles integrating the theory and practice of CC, each quarter. ⁹ Furthermore, several research centers at multiple Universities (e.g. The Boston College Center for Corporate Citizenship) framed explicitly around CC have emerged. As well as a growing number of government units specifically dedicated to CC (e.g. The Chamber of Commerce Center for Corporate Citizenship) and consultancies (e.g. The Corporate Citizenship Company) appeared within the last years. In many ways, this symbolizes the proliferation of the terminology and practices of CC in the business-society field within the last decades. ¹⁰

3 Practical implementation

The most commonly described approach to implement Corporate Citizenship lies in using a mix of

Corporate Giving
Coroporate Foundations
Corporate Volunteering
Social Sponsoring¹¹, ¹².

Examples from the recent past are the explicit support of gay rights, the support of the Black Lives Matter movement and the public involvement in the highly controversial political debate about the overturned “Roe v. Wade” landmark legal decision of 1973 on abortion rights. In regard to that, one best practice example of the implementation of CC in their business activities, by openly supporting social movements and protecting civil rights, is the Swedish furniture imperial IKEA. ¹³ In 2020, when the Black Lives Matter movement emerged in the US, IKEA held a series of virtual town hall meetings, to listen and gain insight from their Black colleagues on how IKEA can become an ally in the pursuit of racial equity. Those discussions led to the company donating to multiple Black Lives Matter initiatives and openly supporting furnish Black and minority-owned small businesses. ¹⁴

Another best practice example is the roastery Starbucks. “Starbucks has achieved corporate citizenship milestones including reaching 99% ethically sourced coffee, creating a global network of farmers, pioneering green building throughout its stores, contributing millions of hours of community service, creating a groundbreaking college program for its partner/employees, hiring refugees across 75 countries, reducing the environmental impact of its cups, and engaging its employees in environmental leadership.” ¹⁵ The company publishes numerous reports each year on its global environmental and social impact, civil rights and sustainability. ¹⁶ Furthermore, Starbucks publicly stands up for gay rights and supports the LGBTQIA2+ community by donating to non-profit organizations, selling pride merchandise and also providing employees a safe environment by encouraging diversity at the workplace.

A recent best practice example of implemented CC is the reaction from the file-sharing and cloud storage company Box to the Supreme Court’s decision to overturn Roe v. Wade. The CEO Aaron Levie shared a statement saying, “that Box will continue to support paid time off and will also cover travel and medical expenses for employees to obtain critical reproductive health care services.” ¹⁷

References

1
N.N. The Cambridge Dictionary. Citizenship https://dictionary.cambridge.org/dictionary/english-german/citizenship (2022).
2
Westebbe, A., Logan, D. Corporate Citizenship. (Gabler Verlag Wiesbaden, 1995), p. 17.
3
Habisch, A. Corporate Citizenship – Gesellschaftliches Engagement von Unternehmen in Deutschland. (Springer Verlag Berlin, 2003), p. 58.
4
N.N. Corporate Citizenship. The Boston College Center for Corporate Citizenship. https://ccc.bc.edu/content/ccc/research/corporate-citizenship-news-and-topics/corporate-citizenship.html (2022).
5
Logan, D. Corporate Citizenship: The Role of Companies As Citizens of the Modern World. (Panoma Press, 2018), p. 1.
6
Crane A., Matten, D. Corporate Citizenship: Towards an extended theoretical conceptualization. Academy of Management Review Vol. 30, No. 1, 1-6 (2005).
7
Hancock, L. The Advantages of a Proactive Business Response to Human Rights Reporting. The Journal of Corporate Citizenship No.23, 21-24 (2006).
8
Crane A., Matten, D. Corporate Citizenship: Towards an extended theoretical conceptualization. Academy of Management Review Vol. 30, No. 1, 1-6 (2005).
9
McIntosh, M., Murphy, D., Shah, R. About the Journal of Corporate Citizenship The Journal of Corporate Citizenship Issue 11, 1 (2003).
10
Crane A., Matten, D., Moon, J. The Emergence of Corporate Citizenship – Historical Development and Alternative Perspectives in Corporate Citizenship in Deutschland – Gesellschaftliches Engagement von Unternehmen. Bilanz und Perspektiven, 2. Aufl. (eds. Backhaus-Maul, H., Biedermann, C., Nährlich, S., Polterauer, J) 720-722 (Wiesbaden 2010).
11
Clark, N., Watson, T. Four Steps to Successful Corporate Citizenship Corporate Citizenship Center U.S. Chamber of Commerce Foundation https://www.uschamberfoundation.org/blog/post/four-steps-successful-corporate-citizenship (2018).
12
Knowlton, T. Best Practices in Corporate Citizenship Structures TCC Group – Solutions for Social Impact https://www.tccgrp.com/insights-resources/insights-perspectives/best-practices-in-corporate-citizenship-structures/ (2017).
13
N.N. IKEA culture and values IKEA https://about.ikea.com/en/about-us/ikea-culture-and-values (2022).
14
David, V. 10 Companies that Support #BlackLivesMatter CareerAddict https://www.careeraddict.com/companies-support-blm (2020).
15
Hayes, A. Corporate Citizenship Investopedia https://www.investopedia.com/terms/c/corporatecitizenship.asp (2020).
16
N.N. Committed to Transparency—People, Planet, Coffee Starbucks Coffee Company https://www.starbucks.com/responsibility/reporting-hub/ (2022).
17
N.N. Over 100 Companies Have Responded to Supreme Court Overturning Roe v. Wade CNET News https://www.cnet.com/news/over-100-companies-have-responded-to-supreme-court-overturning-roe-v-wade/ (2022).

1
N.N. The Cambridge Dictionary. Citizenship https://dictionary.cambridge.org/dictionary/english-german/citizenship (2022).
2
Westebbe, A., Logan, D. Corporate Citizenship. (Gabler Verlag Wiesbaden, 1995), p. 17.
3
Habisch, A. Corporate Citizenship – Gesellschaftliches Engagement von Unternehmen in Deutschland. (Springer Verlag Berlin, 2003), p. 58.
4
N.N. Corporate Citizenship. The Boston College Center for Corporate Citizenship. https://ccc.bc.edu/content/ccc/research/corporate-citizenship-news-and-topics/corporate-citizenship.html (2022).
5
Logan, D. Corporate Citizenship: The Role of Companies As Citizens of the Modern World. (Panoma Press, 2018), p. 1.
6
Crane A., Matten, D. Corporate Citizenship: Towards an extended theoretical conceptualization. Academy of Management Review Vol. 30, No. 1, 1-6 (2005).
7
Hancock, L. The Advantages of a Proactive Business Response to Human Rights Reporting. The Journal of Corporate Citizenship No.23, 21-24 (2006).
8
Crane A., Matten, D. Corporate Citizenship: Towards an extended theoretical conceptualization. Academy of Management Review Vol. 30, No. 1, 1-6 (2005).
9
McIntosh, M., Murphy, D., Shah, R. About the Journal of Corporate Citizenship The Journal of Corporate Citizenship Issue 11, 1 (2003).
10
Crane A., Matten, D., Moon, J. The Emergence of Corporate Citizenship – Historical Development and Alternative Perspectives in Corporate Citizenship in Deutschland – Gesellschaftliches Engagement von Unternehmen. Bilanz und Perspektiven, 2. Aufl. (eds. Backhaus-Maul, H., Biedermann, C., Nährlich, S., Polterauer, J) 720-722 (Wiesbaden 2010).
11
Clark, N., Watson, T. Four Steps to Successful Corporate Citizenship Corporate Citizenship Center U.S. Chamber of Commerce Foundation https://www.uschamberfoundation.org/blog/post/four-steps-successful-corporate-citizenship (2018).
12
Knowlton, T. Best Practices in Corporate Citizenship Structures TCC Group – Solutions for Social Impact https://www.tccgrp.com/insights-resources/insights-perspectives/best-practices-in-corporate-citizenship-structures/ (2017).
13
N.N. IKEA culture and values IKEA https://about.ikea.com/en/about-us/ikea-culture-and-values (2022).
14
David, V. 10 Companies that Support #BlackLivesMatter CareerAddict https://www.careeraddict.com/companies-support-blm (2020).
15
Hayes, A. Corporate Citizenship Investopedia https://www.investopedia.com/terms/c/corporatecitizenship.asp (2020).
16
N.N. Committed to Transparency—People, Planet, Coffee Starbucks Coffee Company https://www.starbucks.com/responsibility/reporting-hub/ (2022).
17
N.N. Over 100 Companies Have Responded to Supreme Court Overturning Roe v. Wade CNET News https://www.cnet.com/news/over-100-companies-have-responded-to-supreme-court-overturning-roe-v-wade/ (2022).

1 Definition and relevance

2 Background

3 Practical implementation

References

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