**2.1 Corporate social responsibility—theory of stakeholder**

Corporate Social Responsibility (CSR) involves the relationship between enterprises and society and is strongly related to stakeholder management.

The theoretical concept of Social Responsibility was originated in the 1950s [6], when formal literature on CSR grown up at United States and Europe. At that time, researchers' concern was the excessive autonomy of business over society without proper responsibility for negative consequences of their activities, such as environmental degradation, labor exploitation and economic abuse. After some scandals, entrepreneurs started to engage in social activities to benefit the community, outside the scope of the companies' businesses, just as a moral obligation, in a temptation of compensating negative impacts. It is worthy to point out that when this movement started to gain density, it created a social sanction. But at that moment, it was subtle, and companies acted pretty much by reaction.

Aligned to this reactive behavior, the first vision was the **shareholder model**. This model, defended by the economist Milton Friedman (1985) [3], reflected a classic view of Social Responsibility, where it is to increase their profits, maximizing the shareholder value. He defines business as a self-search for profit: other considerations are society's responsibility and not of business. If business in its searching for economic efficiency faces conflicts with the wider social concerns, then it is the government responsibility to restrain business through legal measures that may affect economical decisions [3].

The evolution of prior model led to the **stakeholder approach** representing the firm's concept on the perspective of contract theory [4]. It tries to define social responsibility largely related to the groups of interest, which affect or are affected by corporate actions. It incorporates the notion of obligation to those groups, besides shareholders and employees.

The concept of CSR is associated with the recognition that decisions and results of companies' activities reach a universe of social agents much broader than that composed by their owners and shareholders. Many of the business decisions and activities have consequences for the local community, the environment and other aspects of society that go far beyond the targed market [4].

Under this approach, corporate responsibility can be considered the contract between company and society. There is a cycle of social responsibility that involves critical issues to business management in order to construct a sustainable society. In other words, it implies the convergence of efforts to balance the interests of stakeholders, leading to innovation and market prosperity to meet the social, environmental and ethical expectations of civil society.

The stakeholder concept implies that enterprise activity is not just a market transaction, but also a web of cooperative and competitive relations of a great

number of persons, organized in diversified ways. The enterprise is an organization in which and by which many individuals and groups spend efforts to reach their goals. The model personifies social responsibilities, identifying specific groups or people that business must address to when orienting social responsibility and actions, giving names and faces to society members. Incorporating social responsibility in actions is seen as a process composed of various phases, that Wheeler describe as (i) the inclusion of stakeholders or "stakeholding, (ii) the establishment of goals, (iii) the implementation of the process and (iv) evaluation of it; all of them, based on cooperation and on building the relationship with stakeholders. This relationship is based on trust and integrity, focused on long term sustainability [5, 6].

#### **2.2 Sustainability**

Sustainability is a concept related largely to environmental concern, which involve economic and social dimensions. The debate polarizing economic growth and quality of life arose in the 1970, with the publication of the book Limits to Growth [7]. The dispute focused on traditional economic policies but set limits to income, considering population growth and which could not be met by exhausting natural resources and jeopardizing ecosystems. And this dissonance between quality of life and economic growth began to change in the 1980, when a review of concepts took place and sustainable development was adopted as the great motto for reconciling growth with quality of life [4, 7].

The most relevant work on the concept of sustainable development is the Brundland Commission Report, produced as a summary of the United Nations's (UN) World Commission on Environment and Development [8]. The concept at its origin had wide scope, associating development and environment, where development must be bearable, viable and durable. In other words, "*a development that meets the needs of the present generation without compromising the ability of future generations to meet their own needs*" [8].

Concern about environmental resources and the promotion of environmental awareness has become consolidated from the United Nations Conference on Environment and Development (CNUMAD), also known as ECO 92, realized at Rio de Janeiro, Brazil. A document was established at this meeting with new parameters and actions for the reversal of continuous deterioration of environmental system. It was named Agenda 21 and began to contemplate general principles and turned to be the basis for specific principles of sustainable development [9].

In 2012, RIO +20, a UN meeting to evaluate the 20 years after Rio-92, focused on themes of green economy in the context of sustainable development, poverty eradication and international governance for sustainable development. Green economy is the concept that has guided the formulation of public policies for sustainable development. The UNEP - United Nations Environment Program defines the green economy as one that results in the improvement of human wellbeing and social equity, reducing environmental risks and ecological scarcity. The concept of green economy does not replace that of sustainable development or sustainability; in practice, it is a development agenda that proposes a transformation in the way of facing the relationship between economic growth and development [10].

In 2015, The Sustainable Development Goals (SDGs) (Agenda 2030) approved along the United Nations Summit on Sustainable Development brought together 17 global objectives and 169 targets with the aim of ending poverty by 2030 and universally promoting economic prosperity, social development and environmental protection. It designed a common agenda for society.

#### *Corporate Social Responsibility and Sustainability in Corporate Strategy: Brazilian Cases Studies DOI: http://dx.doi.org/10.5772/intechopen.94414*

The concept of sustainable development is—today—fully integrated into the concept of social responsibility: there will be no long-term economic growth without social progress and also without environmental care. All sides should be considered with equal weights as they are interrelated aspects. Just as economic growth does not sustain itself without social and environmental equivalence, corporate social or environmental programs will not be sustained if there is no economic balance of the company.

The idea of sustainability for the organizations has been represented by the raising of expectations regarding social and environmental performance in addition to the economic, translated into the concept of triple bottom line (TBL) - Profit-Planet- People - created by Elkington in 1994. It refers to the adoption of new corporate postures committed to social and environmental issues, in addition to the common goal of companies to make a profit [11, 12]. The triple bottom line is a sustainability framework that examines a company's social, environment and economic (no just financial) impact. **Figure 1** shows one of several ways this concept has been divulgated.

The triple bottom line term had become part of the business lexicon and since then influences corporate accounting, stakeholder engagement and increasingly, strategy.

It is still under course a transition in business management models, from single bottom line vision to the consideration of triple bottom line as a management system that will encompass the tripod of sustainability. The triple economicsocio-environmental dimension has been considered in the strategic business planning and in the definition of its goals and actions. Social Responsibility and Sustainability are complementary concepts and must not be interpreted as a new wave as occurred with other topics involving business management.

It remains difficult to reconcile enterprise sustainability to increasing shareholder value objectives as the language of business and sustainability are still distant. The ambiguous and multidimensional nature of sustainability increases difficulty to connect them. To this end, Hart and Milstein have developed a sustainable value framework that links challenges of global sustainability to value creation by companies. In the sustainable value creation companies are challenged to minimize losses from current operations (combating pollution, mitigate environemental impacts), while redirecting their portfolios toward more sustainable technologies and skills (clean, ecoefficient, circular economy technologys) [14].

These sustainable technological innovations are packaged as green technology management, where companies lower the net cost of meeting environmental

**Figure 1.** *Triple bottom line [13].*

#### *Corporate Social Responsibility*

regulations in order to create strategic advantages [15]. About this aspect, notwithstanding, it is worthy to detach that sometimes, companies absorb a pragmatic perspective oriented toward efficiency and hide fake greenery behaviors [16].

Companies are also challenged to engage into broad interaction and dialog with external stakeholders, looking at current offerings (product responsibility, social inclusion, social business), as well as developing economically interesting solutions to future social and environmental problems (vision of sustainability). Taken together, as in a portfolio, such strategies and practices have potential to reduce costs and risks, elevate the reputation and legitimacy of the company, accelerate innovation and repositioning, and crystallize paths and trajectories of growth [14]. There are some studies relating eco-innovation with culture and social structures and some characteristics include knowledge diversity within company, persistent leadership, changes in bureaucratic structures and cultural indulgence [16].

Eco-innovation is strongly influenced by cultural factors and may disrupt company's business. It is different from incremental innovations, more often chosen by companies as represent lower risk and uncertainty. An interesting result points that the government's role is fundamental to induce disruptive green innovations but not by monetary and fiscal incentives and mainly by R&D investments and others creative ways [16].

The great challenge in this path is how to measure relevant impacts. Profit is very easy to measure, but social and environmental impacts are more diffuse and diversified to be captured by a simple set of indicators. In part, this difficulty explains the proliferation of tentative to apprehend the adherence of companies to what is expected by society.

#### **2.3 Management tools**

Many management tools were developed as well as international standards, created by specific bodies or institutions, mainly non-governmental and multilateral organizations, in order to stablish and consolidate a set of acceptable, auditable standards and indicators regard to environmental, social and governance aspects.

The adoption of standards and tools has been an important element of the CSRmovement in Brazil, and organizations in the country have turned to be pioneers in using voluntary certification schemes or contributed to development of tools, standards and certifications.

The participation and mobilization of civil society were fundamental for the development of social and environmental responsibility movement, playing the role of catalysts of these precepts, among them, the Group of Foundations and Companies Institutes (GIFE), the Ethos Institute, the National Thinking of Corporate Bases (PNBE), the Abrinq Foundation for the Rights of the Child and the Brazilian Business Council for Sustainable Development, linked to the World Business Council for Sustainable Development (WBCSD) and the Global Compact Network in Brazil, GRI, focal point in Brazil.

The most relevant tools for Brazilian companies are described as follows.

#### *2.3.1 Norms and certifications*

Norms and certifications are very important to drive internal processes management. Some of the main norms are that stablished by The International Standard Organization (ISO), as ISO 9000 and ISO 14000 Standards which certify companies for their managerial capacity (quality of the production process) and respect for the environment. National equivalent standards are the *Corporate Social Responsibility and Sustainability in Corporate Strategy: Brazilian Cases Studies DOI: http://dx.doi.org/10.5772/intechopen.94414*

NBR 16000 and ISO 26000 which has been developed under common leadership of Brazil and Sweden [1].

The Social Responsibility standard – ISO 26000 is an integrative document of several internationally recognized management instruments in order to guide the decision-making process aligned with strategies and needs of organizations and stakeholders. Adherence to the standard is voluntary however, without certification.

Certification Schemes establish principles and criteria to attest the sustainability practices and products along the value chain, ensuring differentiation, origin identification and product quality assurance, based on parameters defined by each specific regulatory body.

Socio and Environmental labels consist on the declarations contained in the product labels, indicating their environmental, social and ethical attributes. It is a statement in which a nongovernmental organization (NGO), an institute or an association attest that a particular product has excellent environmental qualities, that their product is environmentally superior to others in the same category. The most known certification schemes are organic certification, forest production practices, fair trade, and socio biodiversity products and label. They are granted by Forest Stewardship Council FSC certification, Fair Trade, Brazilian Organic Food, accredited by the International Federation of Organic Agriculture Movements – IFOAM, Union for Ethical Biotrade (UEBT), the last, a certification process for socio-biodiversity chains.

The UN Global Compact is a voluntary initiative based on CEO commitments to implement universal sustainability principles and to take steps to support UN goals. Launched in 2000, the United Nations Global Compact is both a policy platform and a practical framework for companies that are committed to sustainability and responsible business practices. As a multi-stakeholder leadership initiative, it seeks to align business operations and strategies with ten universally accepted principles in the areas of human rights, labor, environment and anti-corruption and to catalyze actions in support to UN Sustainable Development Goals (SDGs) [17].

The UN SDGs provide an agenda for identifying further opportunities to develop socially and environmentally responsible products and services. Global Reporting Initiative, GRI the World Business Council for Sustainable Development (WBCSD), and UN Global Compact developed the SGS Compass Guide, to support companies in aligning their strategies with the UN SDGs and managing their contribution to the realization of them.

Other certification defines companies as "B" corporations when they have the purpose of generating positive social and environmental impact, with expanded responsibility for consideration of their stakeholders in the short and long-term decision and commitment to transparency for measuring and reporting of their triple impact. The system is managed by Blab, a non-profit organization founded in 2006, in United States and Canada. To obtain certification, companies are analyzed through a rigorous impact assessment process in multiple dimensions: governance, business model, consumers, employees and environment and they have to achieve a minimum score on the B Impact assessment. Once certified, they formally undertake the commitments to look at their long-term impact and consider their chain as a whole in decision making. Today, more than 2500 companies are certified as B Corporations, in more than 50 countries, among that, 140 are Brazilian [18].

#### *2.3.2 Indicators*

A very important trigger for CSR-management on the national and regional level have been the so called "Ethos Indicators for Sustainable and Responsible

Business", a set of scaled indicators, to measure their performance and compare to benchmarks in the sector and countrywide on an annual basis. The Indicators are a self-assessment tool and are not meant to be a reporting or certification standard. Companies use the results internally and are not obliged to disclose the results. The application of the Indicators led many companies to the decision to adopt other CSR-certifications, in order to formalize policies and processes necessary to advance in their evaluation. More than 3.700 companies applied to the indicator's measurement process [1].

#### *2.3.3 Reports and index*

The GRI Sustainability Reporting Standards are the first and most widely adopted global standards for sustainability reporting. They were developed with multi-stakeholder in a consensual process aiming to help business, governments and other organizations to understand and communicate their impacts, provide a reporting system that promotes comparability between companies and present indicators on the three sustainability elements (economic, social and environmental), treated separately. Almost 15.000 companies follow and publish their sustainability reports, 519 are Brazilian companies [2].

Increasingly, the directors of any publicly listed company have to explain how their company's actions will impact its employees, customers, suppliers and the environment (stakeholders).

The triple bottom line inspired multiple capital models focusing investors and financial analysts on Environmental, Social and Governance, known as ESG Approach. This framework is a set of criteria and filters that analysts, banks and investors use to assess whether companies and with which they operate are committed to the Environmental, Social and Governance aspects. Only those companies that achieve a certain score in this assessment, or submit plans to evolve, would be eligible to receive investments and/or loans.

The Dow Jones Sustainability Index (DJSI World) launched in 1999, is one of the main indexes that represent the sustainable corporate quality of companies. The analysis and selection of the recipients is made by RobecoSAM, a company specialized in asset management and products and services in the field of sustainable investments. The index assesses economic, environmental and social performance data, as well as items such as corporate governance, corporate ethical responsibility and environmental concern. The methodology consists of rules that are converted into a general score, which determines inclusion in the DJSI. The world index brings together 317 companies from 58 industries spread across 29 countries, among them six Brazilian companies [19].

The Index of Sustainable Enterprises of the Brazilian Stock Exchange, the so-called ISE Ranking, was created in 2005, being the fourth of its kind in the world. The process of construction and application of the questionnaires which is responded by publicly listed companies was formatted and applied by the Center of Sustainability Studies of Getulio Vargas Foundation (GVces) until 2018 (now ABC Associados is the technical partnership). Companies that own the 200 most liquid shares in B3 are invited to participate. Process of application of ISE starts each year in public consultations on the questionnaire and ends with the publication of the portfolio in November. Since its launch, demonstrates a very positive performance, outperforming significantly the average index of the stock exchange [20].

Rather than take this as succession of models, where the shareholder approach was replaced by the corporate responsiveness approach and so on, we suggest that these approaches exists simultaneously, each of these models co-exist in the social integration approach, representing waves of influence in the dominant approaches, *Corporate Social Responsibility and Sustainability in Corporate Strategy: Brazilian Cases Studies DOI: http://dx.doi.org/10.5772/intechopen.94414*


**Table 1.**

*Evolution of CSR approach.*

rather than temporally distinct conceptions. **Table 1** presents the evolution of the approach of CSR.

It is worthy to register that the objective was not to exhaust all certifications, norms and other managerial instruments but just to present an overview of the landscape. Specific instruments will be commented along the cases.
