Corporate Social Responsibility of AIG

Posted by Matthew Harvey on Oct-17-2018

1. CSR at AIG

CSR s embedded in the business philosophy of AIG. At AIG, the business operations and processes are designed in a way that they do not become an obstacle or a burden in the way of people’s and the environment’s wellbeing. At the same time, these processes and designs boost business growth. The systematic design of operations at AIG enables the management to ensure that the organization achieves sustainable business growth by reducing attached risk factors as well as through community building goals and ambitions. AIG strives to increase its social impact and influence on the environment and in people’s lives- by focusing on three big goals. 

1.1. Values at AIG

AIG works for CSR through the CSV approach. This is made easier to incorporate in the company systems because of the core values practised at AIG. These are:

Respect – for every one

  • Trust
  • Integrity
  • Honesty
  • Accountability

1.2. CSR goals at AIG

1.2.1. Improving livings standards for communities through increasing employment opportunities

AIG believes in working for the people, and working with the people. With the growth of the business across the world, AIG ensures that it creates new employment and livelihood opportunities for millions across the globe. This is done through direct employment and contracts, as well as through inclusive business opportunities.

1.2.2. Enhancing the health and wellbeing of communities engaging with AIG

AIG works with communities at large and aims to help them become healthier and happier. AIG provides nutritional boosting and support to communities where it runs operations, as well as to other communities living in regions marked below poverty. Additionally, AIG also produces and distributes health and hygiene products to enhance the wellbeing of its customers along with the various communities it has engaged with.

1.2.3. Reducing environmental footprint

AIG works towards reducing its environmental footprint by ensuring that it allows the legislation regarding carbon production and release. Also, AIG works towards designing operational processes that reduce water and land pollution. All products manufactured and distributed by AIG come with a disposal method to reduce wastage, and increase recycling. 

2. Creating shared value (CSV) at AIG

AIG works hard to create value for not only the shareholders but for the society at large. This approach of creating shared value has enabled impressive business growth for AIG, as well as allowing its expansion regionally as well as in its product portfolio. Through creating shared value, AIG brings value to the lives of communities where it operates by influencing those aspects of the society which intersect and coincide with the business offerings and business operations.

2.1. How to maximize value creation?

Through the CSV approach, AIG can create the most value in the following aspects:

2.1.1. Nutrition

AIG focuses on investing in the health of communities by focusing on nutrition and medication, as well as on sanitation and hygiene. The primary focus remains on ensuring health safety for children and infants.

2.1.2. Water

AIG works hard with third parties and external as well as internal support systems to ensure that its operations do not cause water damage. In addition, it administers all its internal sewage plants to dispose of waste optimally without risking water life.

2.1.3. Air cleansing

AIG maintains carbon units as per legislation in all its operations across the globe. The company also takes responsibility for ensuring that all its industrial sites and operations are placed away from residential areas to reduce maximum exposure of plant operations to the public.

2.1.4. Rural development

 AIG strives to develop communities where it operates. This includes rural communities and settlements from where AIG gets its raw materials and inputs as well as labour. AIG created varied employment and livelihood opportunities for these communities to help them raise their living standards and quality of life.

3. Commitments made by AIG

Commitments at the AIG have helped shape its CSR and CSV approach based on multiple trends from across the globe. These commitments have helped AIG maintain focus in giving back to the community as well as in developing a more sustainable environment and workplace. Commitments are the long term goals that AIG wants to fulfil and achieve in the following different aspects:

3.1. For individuals and families

3.1.1. Living healthier lives

For families and communities, the CSV approach of AIG focuses on helping individuals attain a balance between healthy nutrition and physical exercise as a means of a healthier lifestyle and healthy living. With today’s work style and busy schedules, this is quite a challenge. AIG works intending to develop programs and products to help communities manage time well and stay motivated towards increasing their wellbeing.

3.1.2. Having nutritional knowledge

AIG works with the long term aspiration of enhancing the lifestyles of communities. The company plans to do it by sharing information regarding nutritional facts, and by raising awareness of nutritional intake. The company does this by not only making the nutritional value available for its own manufactured products but also develops programs and information sharing networks to help individuals learn about healthy eating and make informed dietary decisions.

3.2. For communities

3.2.1. Rural development

AIG works towards developing rural communities-especially where it is operational and present. The company engages not only in employment creation but also infrastructure development and education deployment programs to help communities improve their living standards. AIG also conducts vocational training programs frequently.

3.2.2. Promoting diversity

AIG also works towards inclusion through its diversity programs. The company has designed programs and policies to ensure the inclusion of all community groups in the employment cycle. In addition, the company also conducts training and skill enhancement sessions for all community groups –including disabled and special persons

3.3. For the planet

3.3.1. Protecting water

AIG understands the need for protecting water resources across the globe and is also an active fighter for water preservation. With the high scarcity of clean drinking water, AIG works and strives to provide communities with clean drinking water through having installed filter plants

3.3.2. Protecting natural resources

 With increased urbanization, natural landscapes of forests and grasslands have quickly turned into urban centres. AIG ensures that all its operational sites are designed in a way that they do not harm or risk the natural ecosystem. In addition, the company works towards protecting the environment by building green spaces.

3.3.3. Safeguarding the environment

The operations of AIG, like other players in the industry, are being affected by the climatic changes, and the weather alterations. To fight this change, and to safeguard the environment, AIG works towards creating safe green spaces through high rate plantations. This is to ensure environmental sustainability and enrichment of the ecosystem.

4. Value chain at AIG and CSR

At AIG, SCR is embedded in the company DNA. AIG ensures that the CSV approach is integrated into all operations and systems at the company, including THE VALUE CHAIN.

4.1. Supply chain

4.1.1. Rural development

AIG allies with farmers and other partners to obtain the high quality raw material. In doing so, the company ensures that it invests in the wellbeing in the development of its partners and related communities through educational opportunities as well as various training programs and infrastructure development.

4.1.2. Responsible sourcing

AIG participates in responsible sourcing. All its partners throughout the supply chain and for raw materials have been tested against set ethical backgrounds to ensure that all raw sources and materials are obtained from partners doing sustainable business.

4.1.3. Animal welfare

In all its sourcing, AIG ensures that no animals are harmed. AIG makes sure that all animals are fed high quality fodder, and that they are kept in a clean and safe environment. In addition, AIG also provides safe breeding grounds for animals and regularly authorizes veterinary check-ups for all animals in partner farms.

4.1.4. Human rights

AIG is also particularly careful to ensure that all human rights are upheld in its business operations. This includes no child labour, and inclusive diversity, amongst other things. Also, the business operations of AIG also include high dependence on local workers for labor and management – making sure all local and global human rights are followed thoroughly.

4.2. Manufacturing

4.2.1. Water, sanitation and hygiene

During the manufacturing process and value additions, AIG maintains an emphasis on water, sanitation and hygiene. All plants and manufacturing units operated by AIG have an authorized sanitation system in place which ensures minimal water wastage. Besides, all industrial waste is disposed of off through authorized channels only – ensuring that no natural water body and water source is harmed or polluted.

4.2.2. Natural resource stewardship

AIG is also an active pioneer of natural resource stewardship. AIG has devised ways to ensure that natural resources are sustainably used for industrial operations, and are not damaged during business processes. AIG shares this knowledge publicly for the overall welfare of the environment and the planet.

4.2.3. Women empowerment

During its manufacturing process, the AIG also ensures to employ women labour in various managerial and operational level jobs. These women are usually from local communities and are trained for new skill development and enhancement. In doing so, AIG ensures that women are equipped with the confidence and decision making abilities s that they advance not only in their professional but also in their personal and social lives.

4.3. Retail and consumers

4.3.1. Responsible marketing and influence

AIG makes sure to use ethical means of marketing its products. This means not only does it disseminate rightful information and data regarding the company, but also makes sure that it does not use unethical appeals in its marketing communication.

4.3.2. Marketing to children

AIG is also careful in its marketing to children so that it is not exploitative. Rather, marketing to children is done through influencing adults towards the products offered by AIG.

4.3.3. Product Safety

AIG ensures product safety in consumption at all times. This is done not only through mentioning nutritional value and facts but also through a clear statement of manufacturing dates and batches. This is to make sure that consumers are aware of the product quality and life cycle. Also, the company mentions clear ways and processes of disposing of the products to ensure that the environment is sustained and not harmed.

5. Working towards achieving sustainable goals 

 The CSR and CSV approach at AIG is closely guided by the sustainable development goals chalked out by the United Nations. Through working on the attainment of the SDGs, AIG, and many other companies work together to create a peaceful and harmonious future that has sustainable resources and environment.    

Through connecting AIG’s goals and commitments with the SDGs, the company has created avenues of channelling a positive impact on society through its operations and business as a whole.

5.1. No poverty

  • AIG creates opportunities for skill enhancement and vocational training
  • AIG also provides equal employment opportunities to all labours from the local communities
  • AIG promotes and supports small business ventures through inclusive business support and funding – especially for women who are micro-entrepreneurs in the community

5.2. Zero hunger

  • AIG works towards implementing a model of less food wastage and food loss – in the manufacturing as well as the supply chain process
  • AIG provides subsidized products in communities that are living below the poverty line, as well as in communities where it is operational and has industrial units and sites
  • AIG has developed recycling plants in local communities to ensure that there is no food wasted during consumption, and it is recycled into other products needed for a sustainable environment

5.3. Clean water and sanitation

  • AIG strives to ensure high water efficiency and water sustainability in all business operations and processes
  • AIG advocates and also internally implements positive water policies
  • Infrastructure developed by AIG in different rural communities and settlements ensures authorized sewage networks and lines to avoid dumping in freshwater reserves

5.4. Life on land

  • AIG works towards establishing the green supply chain
  • AIG ensures that no Green spaces are destroyed for its business and industrial purposes, and also works towards creating healthy green spaces through numerous plantations
  • AIG places a high emphasis on maintaining regular health check-ups for all community members – free of cost, and also focuses on animal welfare for farmers

5.5. Good health and well being

  • AIG works towards improving the living standards and quality of life of communities it engages with
  • For farmers, AIG has also improved farm economics
  • AIG works towards protecting the children in the supply chain processes, as well as creates diverse livelihood opportunities for adults

5.6. Quality education

  • AIG provides a hands-on learning opportunity for young adults from local communities through internship opportunities
  • AIG also sponsors various scholarship programs for different grade levels in communities where it is operations
  • AIG has inaugurated primary schools in three different regions where it has operations – in rural settlements – as a step towards achieving quality education for all.

6. Partnerships and collaborations for a greater positive impact

6.1. United Nations Global Impact

The AIG works with the United Nations through the united nation global compact (UNGC) avenue. AIG has close and successful collaborations with UNGC based on the commonality of goals and values, as well as short term sustainable plans for environmental wellbeing. Collaboration with UNGC is two way for AIG:

  • It helps AIG strengthen its integration of the CSV approach, and its various aspects and channels. Working with UNGC allows the AIG to redesign and improve its operations to ensure that all systems are ethically sound and sustainable
  •  Working with UNGC allows AIG to help in whatever way possible, towards the attainment of the SDGs developed and defined by the UN. By being partners with UNGC, AIG ensures that it's business operations and practices, as well as external engagements, work towards accomplishing the defined SDGs.

6.2. International Federation of Red Cross and Red Crescent Societies (IFRC)

AIG has collaborated and worked with IFRC in different regions of Africa for more than a decade – striving towards improving water sanitation and hygiene issues. The company has worked tirelessly to help provide communities with safe drinking water. The efforts of AIG have been tied, especially with first communities that reside in crop and local farms, as well as for communities who live near bottled water plants in different African regions.

7. Accounting and CSR at AIG

CSR is also very evident in the accounting practices at AIG. Incorporation of CSR at all fronts and in all departments of the organization has helped AIG achieve a distinctive competitive edge, and has also improved its image and standing amongst consumers as ab active advocate of sustainable living and sustainable consumption.

The overall organizational CSR at AIG has been achieved in large because of its emphasis on incorporating CSR at the base level functions – such as that of accounting

7.1. Accounting Principles at AIG

AIG follows the international standard and policies in its accounting principles. The company has in-house trained and qualified individuals from each region where it operates, along with managerial support from the headquarters for developing and auditing accounting principles and accounting activities in the business. All activities and processes, as well as accounting systems, are vetted for local and international legislations attached, and ensure to follow an ethically built framework that is within the legal boundaries.

7.2. Governance structure at AIG

All managerial levels at AIG, including the strategic leaders, are supervised by governing internal bodies. The strategic leadership is supervised by the board of directors, while other managerial levels are supervised for their performance internally by other managerial groups and levels. The purpose of governance at AIG Is to ensure that the company is in line with its CSV approach at all times and that all business operations and decisions are made in perspective of the company’s value of sustainable living.

7.3. External advisory partners

To ensure that all practices at AIG are ethical, and followed as per international benchmarks and expectations, the AIG also contracts with a third party, external advisors. These advisors audit and vet the company systems, processes, and accounting numbers to make sure that everything is in line with the expectations, and the business model.

8. Finance and CSR at AIG

It is interesting to note that while CSR activities and engagements help <?=$title?> improve its image and standing amongst the public and other stakeholders, and help it build credibility and trust, it also results in improved financial position and performance.  

8.1. Financing opportunities

AIG finds higher opportunities for financing its projects because of its engagement in various CSR activities. This is because the company faces lesser financial constraints because of its improved image ad standing. Moreover, it is also now easier for AIG to secure finances for funding new projects and ideas.

8.2. Higher investment opportunities

When firms like AIG perform and engage in CSR activities, they include them and mention them clearly in the annual report and other official company documents. This increases the overall transparency for AIG and communicates values of commitment, trust, and passion. 

 As a result, it attracts new investments from local as well as international investors for business expansion and business operation enhancement. With higher transparency, potential investors feel less doubtful and less fearful about investing in AIG. 

8.3. Improved stakeholder engagement

CSR engagement by AIG in various aspects, and on various platforms has resulted largely because of higher participation, engagement and encouragement by the stakeholders. This active engagement by stakeholders and shareholders alike has convinced strategic managers for AIG to develop a long-form and a futuristic strategy. This has been important for AIG for resource allocation and contracting and planning with the right outlook and resources in perspective. 

9. References

Cole, G., 2003. Strategic Management. Boston: Cengage Learning EMEA.

Gerlach, A., 2003. Sustainable Entrepreneurship and Innovation. University of Leeds, s.n.

Hill, C. & Jones, G., 2007. Strategic Management: An Integrated Approach. Boston: Cengage Learning.

King, D. & Lawley, S., 2016. Organizational Behaviour. Oxford: Oxford University Press.

Kotler, P. & Keller, K., 2009. Marketing Management. New Jersey: Prentice Hall.

Martinez-Ferrero, J. & García-Sánchez, I., 2015. Is corporate social responsibility an entrenchment strategy? Evidence in stakeholder protection environments.. Rev. Manag. Sci. , Volume 9, p. 89–114.

Mazurkiewicz, P., n.d. Corporate Environmental Responsibility: Is a common CSR framework possible?. s.l.:World Bank

McWilliams, A. & Siegel, D., 2001. Corporate social responsibility: A theory of the firm perspective. Academy of Management Review, 26(1), p. 117–127.

Perez, A. & Rodríguez del Bosque, I., 2014. The role of CSR in the corporate identity of banking service providers. Journal of Business Ethics, 108(2), pp. 145-166.

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