BUSINESS ETHICS,

CORPORATE SOCIAL
RESPONSIBILITY, AND
SUSTAINABILITY
PREPARED BY: MS. IDA
Reference: Cabrera, Elenita (Governance, Ethics, Risk Management, and Internal Control)
 Ethics derives from the Greek word ethos –
meaning “character.” Ethics is concerned with
understanding right and wrong and how conduct
should be judged to be good or bad.
Three general areas constitute a framework for
understanding ethical theories:
● Metaethics,
● Normative ethics, and
● Descriptive ethics.
● Metaethics
the study of the nature of ethics. It considers
where one’s ethical principles “come from,
and what they mean.” Metaethical focuses on
issues of universal truths, the will of God, the
role of reason in ethical judgments, and the
meaning of ethical terms themselves.
● Normative ethics
the study of ethical action. It deals on the
practical side of the ethics. It tells the people
what to do and what not to do.
● Descriptive ethics
the study of people’s views about moral
beliefs. It also relates to presenting –
describing but not interpreting or evaluating
– facts, events, and ethical actions in specific
situations and places.
Business ethics refers to the application of
ethical principles and analytical methods to
business.
Business ethics
the study of how personal moral norms apply to
the activities and goals of commercial
enterprise. It is not a separate moral standard,
but the study of how the business context poses
its own unique problems for the moral person
who acts as an agent of this system. - Laura Nash
Business ethics is an organization’s policies and
standards established to ensure certain kinds of
behavior by its members. It must be a
fundamental aspect of mission, since everything
the organization does flows from that. Managers
responsible for strategic decision-making should
consciously apply ethical rules to all their
decisions in order to filter out potentially
undesirable developments.
Course Objectives

● Define the components of business ethics.

● Formulate ethical decision in business
● Understand the concept, applicability, and
reporting in respect to Corporate Social
Responsibility and Sustainability.
● Explain the concept of corporate citizen and
intergenerational responsibility.
 The Board should adopt a Code of Business
Conduct and Ethics and ensure its proper and
efficient implementation and monitoring of
compliance.
Code of Business Conduct and Ethics provides
standards for professional and ethical behavior,
as well as articulate acceptable and
unacceptable conduct and practices in internal
and external dealings. It explains what behavior
is expected of all employees and provides the
standards that guide the work of the company
and how the employees should relate to
customers, competitors, vendors, and to other
employees.
The Code of Business Conduct and Ethics shall
cover and apply equally to all employees. Failure
to comply with the standards contained in the
Code will result in disciplinary action, including
termination of employment. In some cases, civil
and criminal actions are warranted.
Most large companies adhere to the following
ethical principles and values described as
follows:
● Accountability
● Integrity
● Fairness
● Transparency
Some of the commitments of the Company, its
directors, officers and employees in their
behavior and various business dealings are
relate to the following:
● Honesty and Fair Dealing
● Compliance with laws
● Conflicts of Interest and Corporate
Opportunities
● Corporate Entertainment/Gifts
Some of the commitments of the Company, its
directors, officers and employees in their
behavior and various business dealings are
relate to the following:
● Creditor Rights
● Confidential Information
● Accounting of Funds
● Proper Use of Property
Ethical reasoning is required in business for at
least three reasons:
First, many times laws do not cover all aspects or
“gray areas” of a problem.
Second, free- market and regulated- market
mechanisms do not effectively inform owners
and managers how to respond to complex issues
that have far reaching ethical consequences.
Ethical reasoning is required in business for at
least three reasons:
A third argument holds that ethical reasoning is
necessary because complex moral problems
require “an intuitive or learned understanding
and concern for fairness, justice, [and] due
process to people, groups, and communities.
Corporate Social Responsibility or CSR is
defined by the World Bank as the commitment
of business to behave ethically and to contribute
to sustainable economic development by
working with all relevant stakeholders to
improve their lives in ways that are good for
businesses, the sustainable developments
agenda, and society at large.
CSR-related activities include the following:
● Charitable programs and projects,
● Scientific research,
● Youth and sports development, Cultural or
educational promotion,
● Services to veterans and senior citizens,
● Social welfare,
CSR-related activities include the following:
● Environmental sustainability,
● Health development,
● Disaster relief and assistance,
● Employees and worker welfare related
activities.
CSR activities becomes strategic when they are
concerned with the long-term success of the
business and should therefore be beneficial to
the business as well as to society.
Examples of strategic CSR initiatives might
include:
➔ A pharmaceutical company funding the
training of medical staff, in the hope that
when qualified they will source drugs from
that company.
➔ A bank providing free internet training for
senior customers, who might then be
disposed to buying financial products.
Examples of strategic CSR initiatives might
include:
➔ Encouraging employees to nominate and get
involved in good causes, in order to develop
loyalty to the company.
➔ Sponsoring sports teams in return for
advertising space on shirts, other
merchandise, and at the ground.
CSR is a broad concept of corporate citizenship,
which provides that as a citizen, a corporation
has social, cultural, and environmental
responsibilities to the community where is
operates, as well as economic and financial ones
to its shareholders and immediate stakeholders.
House Bill 9061 seeks to institutionalize
corporate social responsibility in corporations,
whether domestic or foreign, partnership and
other establishment performing business in the
country. It also allows corporation to retain
surplus profits in excess of 100 percent of their
paid-in capital stock for corporate social
responsibility projects and programs approved
by the board of directors.
Sustainability

SEC issued Sustainability Reporting Guidelines

for Publicly Listed Companies (Memorandum
Circular No. 4, series of 2019) to promote
sustainability reporting in the Philippines. The
Guidelines adopted the comply or explain
approach for the first three years upon
implementation.
Sustainability

Based on the Guidelines, Sustainability is

defined as “development that meets the needs of
the present without compromising the ability of
future generations to meet their own needs.” It
focuses on how a company manages its
economic, environmental and social impacts,
risks and opportunities.
Sustainability

Sustainability involves developing strategies so

that the organization only uses resources
(inputs) at a rate that allows them to be
replenished (in order to ensure that they will
continue to be available). At the same time
emissions of waste (outputs) are confined to
levels that do not exceed the capacity of the
environment to absorb them.
Sustainability
Sustainability

The phrase “the triple bottom line” was first

coined in 1994 by John Elkington, the founder of
a British consultancy called Sustainability. His
argument was that companies should be
preparing three different (and quite separate)
bottom lines.
Sustainability

The phrase “the triple bottom line” was first

coined in 1994 by John Elkington, the founder of
a British consultancy called Sustainability. His
argument was that companies should be
preparing three different (and quite separate)
bottom lines.
Sustainability
Triple Bottom Line
Sustainability

The aim of the triple bottom line is to measure

the financial, social and environmental
performance of the corporation over a period of
time. Only a company that produces a TBL is
taking account of the full cost involved in doing
business.
Sustainability

The Reporting Principles for defining report

quality guide choices on ensuring the quality of
information in a sustainability report, including
its proper presentation. The quality of
information is important for enabling
stakeholders to make sound and reasonable
assessments of an organization, and to take
appropriate actions.
Sustainability

The Guidelines provides a Sustainability

Reporting Framework for Philippine PLCs that
builds upon four of the globally accepted
frameworks:
1. Global Reporting Initiative’s (GRI)
Sustainability Reporting Standards
Sustainability

The Guidelines provides a Sustainability

Reporting Framework for Philippine PLCs that
builds upon four of the globally accepted
frameworks:
2. International Integrated Reporting Council’s
(IIRC) Integrated Reporting (IR) Framework
Sustainability

The Guidelines provides a Sustainability

Reporting Framework for Philippine PLCs that
builds upon four of the globally accepted
frameworks:
3. Sustainability Accounting Standards Board’s
(SASB) Sustainability Accounting Standards
Sustainability

The Guidelines provides a Sustainability

Reporting Framework for Philippine PLCs that
builds upon four of the globally accepted
frameworks:
4. Task Force on Climate-related Financial
Disclosure (TCFD)
Disclosure are also required on how companies
are able to contribute to the United Nations
Sustainable Development Goals (SDGs) through
their products and services. SDGs are a
universal call to action, to end poverty, protect
the planet and ensure that all people enjoy
peace and prosperity and includes seventeen
(17) goals.
Under the Doctrine of Intergenerational
Responsibility, minors have personality to sue
on behalf of the succeeding generations insofar
as the right to a balanced and healthful ecology
is concerned.
Such a right considers the "rhythm and
harmony of nature."
Nature means the created world in its entirety.
Rhythm and harmony indispensably include,
inter alia, the judicious disposition, utilization,
management, renewal and conservation of the
country's forest, mineral, land, waters, fisheries,
wildlife, offshore areas and other natural
resources to the end that their exploration,
development and utilization be equitably
accessible to the present as well as future
generations.
Needless to say, every generation has a
responsibility to the next to preserve that
rhythm and harmony for the full enjoyment of a
balanced and healthful ecology. Put a little
differently, the minors' assertion of their right to
a sound environment constitutes, at the same
time, the performance of their obligation to
ensure the protection of that right for the
generations to come.

END