The ISR concept is as old as The Golden Rule — “Do unto others as you would have them do unto you”. ISR promotes a proactive stance towards positively influencing and affecting the people and environment in and around one’s immediate circle.
ISR drives CSR, as a corporation is comprised of individuals and hence ISR determines the culture of social responsibility it creates. Individuals are increasingly becoming socially responsible and, thus, Corporations and Companies are required to become more socially responsible to meet demands.
The International Organization for Standardization (ISO) states: “In the wake of increasing globalization, we have become increasingly conscious not only of what we buy, but also how the goods and services we buy have been produced. Environmentally harmful production, child labor, dangerous working environments and other inhumane conditions are examples of issues being brought into the open. All companies and organizations aiming at long-term profitability and credibility are starting to realize that they must act in accordance with norms of right and wrong.”
Many organizations exist to make money. There are others who are serious about giving back to the society and provide a required service to a community or to the world. Each of these organizations have a corporate responsibility towards its shareholders, customers, employees, to the public, and the world it trades in.
The public has now become much more globally aware. There are a number of groups that have been monitoring corporations closely. These groups are the ones concerned about the conditions of the world like the social issues of the world, labor laws, exploitation of workers, environmental issues, like the rainforests disappearing, desertification, pollution, etc.
Large global corporations are aware of people watching them and that any of their wrongdoings will not go unnoticed. Many corporations have forcefully taken up corporate responsibility. For them, it does not make good business sense to be perceived as a company that damages our world. Huge penalties and fines also loom corporations who do not adhere to ethical and environmental laws.
A recent report indicated that majority investors are now willing to invest in a corporation that has depicted corporate responsibility. Investors are fully aware of the strength of customer opinion regarding unethical companies. The customer is now in a better position to shape corporate responsibility than ever before.