Unit 20: Investigating Corporate Social Responsibility
Learning Aim A: Examine the CSR issues facing large private sector businesses
A.P1: Explain how CSR issues impact on the stakeholder of businesses
Definition of CSR – CSR stands for corporate social responsibility. It is a self-regulating business model that helps a
company to be socially accountable to itself, its stakeholders and to the public, By practicing CSR, companies can be
conscious of the impacts they have all society such as the environment and other social and economic factors.
Examples of CSR issues
Working Conditions – Businesses must ensure that their employees work under the best possible conditions,
creating high quality jobs and following all the correct labour standards and statutory provisions.
Gender Equality – Business should be guided by the principle of gender equality. This means they should steer away
from employees based on their gender when recruiting, training and other tasks.
The Environment – Companies must continuously aim to improve the impact that they have on the environment.
This involves things such as the consistent reduction of greenhouse gas emissions, pollution, C02 levels, food mile
and overall just the aim to reduce harmful effects on the environment overall.
Chosen Business 1 – Lush Cosmetics
Lush Cosmetics is a British cosmetics retailer. It is a private owned company that is headquartered in Poole, United
Kingdom, and has 951 stores across 49 countries worldwide. The company produces and sells health and beauty
products including cream, soaps, moisturisers and more.
CSR Issues 1 – Poor Working Conditions
In August 2020, Lush Cosmetics was accused of poor working conditions for their staff in Australia - specifically in
their factory in Villa wood, Sydney. There were claims that workers had suffered physical injuries, breathing
difficulties, and even been targeted for sexual harassment and bullying.
Employees have stated their experience when working in the factory, examples include the following:
- Wrist and back injuries due to lifting 500kg of materials per day
- Working without the correct tools or PPE – Including during the pandemic
- Lifting buckets of up to 15kg individually
- Injuries in wrists, back and shoulders from monotone, repetitive movements
- Having to make large quantities of items per day, especially if it a bestselling product
- Working long hours
- Being refused medical assistance when needed
- Being refused tools and equipment that is needed
- Victims of bullying, sexual harassments, and homophobic comments
The workers who had spoken out about these issues had said that their reports and claims were disregarded by the
company and not taken seriously. The company stated that over the past three years, all statements and complaints
had been ‘’ resulted in some form of disciplinary action’’ but in reality, over a third of the reports filled had resulted
in the employee being fired.
Staff expressed that they were not pushing for a customer boycott but instead wanted Lush to act responsibly and
do things such as providing better equipment and readjust their reporting system for harassment.
CSR Issue 2 – Human Rights
, In 2018, it was revealed that Lush Cosmetics had been underpaying their Australian staff from 2010 to 2018. This
underpayment affects just over 3,000 employees across the management chain from sales assistants and production
assistants all the way up to retailer super visors and managers. Overall, the company had saved over $4.4 million.
The company was able to underpay their staff through the lack of staff training, its manual payroll systems and not
having a fully dedicated HR department.
This resulted in the company having to do the following:
- Engage an expert auditing firm to ensure future compliance
- Make a $60,000 contrition payment to the Commonwealth Consolidated Revenue Fund
- Introduce and establish a hotline to help employees with pay enquires for the next three years
- Display public and workplace notices with details to workplaces breaches
- Conduct reviews of all contracts of all salaried employees
- Provide staff training
Although the company had owned up for their mistakes and agreed to take the necessary measures to rectify the
underpayment, fans of the brand are not pleased. Turning to twitter and Instagram and having conversations about
their disappointments in the company, more specifically about how the company treats their Australian workers very
poor overall. This is supported by the fact that there was a scandal about the poor working condition in their
Australian factory that was released only a few month prior.
Chosen Business 2 – Amazon
Amazon is a very popular American technology company. The business focuses on things such as e-commerce, cloud
computing, digital streaming and much more. It is based in Seattle, Washington and is thought to be one of the most
valuables brands. The company only operates in 15 countries but spans and reaches consumers in 58 different
countries worldwide.
CSR Issue 1 – Poor working conditions
Amazon is known for their very fast same and next day delivery services. This is possible because of their employees
who inspect and scan a rate of 1.800 amazon packages an hour before leaving the facility for delivery. However, 600
workers in the Amazon warehouse had signed and delivered a petition calling on the business to improve their
working conditions. The petition demanded that instead of having two 15-minute breaks, have one 30-minute break,
have more reliable public transit services to the warehouse. In addition to this, the warehouse had an injury rate so
high that it was three times the national average for warehouses.
Employees say that company does not take proper measures to ensure the workers safety and instead of dealing
with the issues, employees get fired for anything. Quoted workers say that the businesses only concern is meeting
hourly rates, as opposed to employee health. The unnecessary dangers of the job have led to numerous employee
injuries, countless workplace reports and clams, increase employee turnover and much more.
CSR Issues 2 – Human Rights
It has recently been discovered that Amazon delivery drivers are being treated poorly and being denied basic human
rights. Fourteen-hour shifts have become a common occurrence as delivery service providers would not allow drivers
to return to the depot with any packages. This pressure on meeting delivery rates meant that workers did not even
have time to even go to toilet and resulted to using plastic bottles on daily on their routes. A worked quoted that any
time a van goes off route or stops for longer than 3 minutes, workers at the depot would get notified and in turn call
the drivers. This is only one example of how amazon drivers have complained of the high level of surveillance and
pressure they receive through the van cameras and the tracking app.
