Critical Analysis of CSR Initiatives of Rio Tinto
Purpose of the Research Paper
The purpose of the paper is to critically analyse the operations and CSR initiatives of Rio Tinto, which is a well-known organisation based in Australia.
About Rio Tinto and its Operations
Rio Tinto is a leading mining company based in Australia. However, the group combines Rio Tinto PLC, which is based in London and Rio Tinto Limited, which is based in Australia. These two firms are joined as a DLC structure and together known as Rio Tinto Group. The company is a leader in mining and related materials. The company operates across the world, supplying key minerals and metals to fulfil global needs and also enable people to improve their living standards (Ellem, 2014). The activities of the Group are expanded across the globe in the countries including Australia, North America, Asia, Europe and Africa. The key products of the organisation include alumina, bauxite, coal, diamonds, silver, gold etc. because the company is in the mining business so corporate social responsibility is extremely important for it. The key business of Rio Tinto is in the mining of aluminium. The company has a huge employee base because of its presence in six continents. The operations of the firm are divided into two crucial business units, namely Bauxite and Alumina. The group owns various mines, deposits, refineries, smelters, generating plants across the globe. The products of the company are derived from different stages of the production process.
There are several changes stated in corporate social responsibility in the last few years. This is because the environment is of prime importance for any organisation. Because of the increasing need to improve the environment, there is a need for introducing several initiatives such that the environment is not influenced by the firm’s activities (Perfetto & Vargas-Sánchez, 2018). Organisations take steps for improving the community and environment. As far as Rio Tinto is concerned, the company has always ensured that the activities of the firm do not hamper the environment. Organisations like Rio Tinto have been taking steps for ensuring corporate social responsibility and the operational influence on the society and environment.
There are different theories used by organisations for ensuring CSR.
- Legitimacy theory: the first CSR theory used by organisations is legitimacy theory. As per this theory, the organisations take up different CSR initiatives to be legitimate for the community. In this theory, the firms often change their CSR initiatives as per the need and latest issues of the industry. The theory shows that legitimacy management is the same as managing the views of the community (Salisbury, 2018). For this, the organisations ensure the firms can develop legitimate CSR initiatives. As per this theory, the organisation’s key focus is to incorporate the legitimacy element in the organisational structure. This also ensures that the existing resources of the firm can be used with the best potential. Organisations that have complicated structures need to have proper use of resources so that they can survive.
- Stakeholder theory: Another theory of CSR is the stakeholder theory. The theory deals with the expectations of the stakeholders such that the managers of the organisation focus effectively on the stakeholders. This theory also shows that activities such as human resources, fund suppliers, and customers are considered (Woods-McConney, Roe & Burgess, 2019). Corporate disclosure is considered being a tool for data collection for managing the stakeholder group. The managers can use this information for creating a healthy relationship with the stakeholders effectively.
These are some CSR theories that are used by managers to ensure that the activities do not hamper the reputation of the organisation appropriately. Firms like Rio Tinto use these theories to ensure that the activities of the mining firm do not influence the environment in a bad way.
CSR at Rio Tinto
The corporate social responsibility initiatives and engagements of Rio Tinto have enabled the organisation to evaluate the issues of the stakeholders. It enables the management of the organisation to ensure that any risk on the environment because of the activities of the firm should be determined beforehand. This helps in the ineffective management of the risk. Also, the management ensures that they conduct the analysis of the CSR activities often for being aware of the harmful impacts of the organisation’s activities (Woods-McConney, Roe & Burgess, 2019). The management of Rio Tinto has taken various initiatives to develop trustworthy relations with the stakeholders, and its CSR initiative has been a key step towards it.
As per the official website of Rio Tinto, the slogan of the company is ‘The way we work,’ which is developed for
ensuring corporate social responsibility of the organisation. There are various activities taken by Rio Tinto for effective social engagement. However, the activities keep varying from one location to another depending upon the role of government and local bodies. Rio Tinto has developed a special department and foundations for ensuring the corporate social responsibility of the firm (Ellem, 2014). The company also has various NGOs, as per the need and relevance of Rio Tinto. In Rio Tinto, stakeholder theory is effectively implemented for ensuring corporate social responsibility. Rio Tinto’s management also focuses on partnership, which aims at coping with global issues. For instance, there are Biodiversity conservation initiatives developed by the mining company wherein the management of the firm encourages the stakeholders to discuss various Biodiversity issues.
It can be concluded that Rio Tinto has effectively developed various CSR programs. These programs ensure that the activities of mining companies do not hamper the environment. The CSR initiatives of the firm a strategy to minimise the environmental risk and increase profit by developing healthy relationships with the stakeholders. This also ensures that the company uses CSR activity as a tool for developing a good image of the firm in society. This can be used for building strong products in the industry and making the organisation’s cope with the increasing competition.
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