Corporate Social Responsibility - buzzwords or strategic value
Corporate Social Responsibility (CSR)
In our previous article we looked at the concept of businesses of the future will find more market success as a result of a more robust approach to sustainability. Customers, shareholders and governments will react more favourably to those enterprises with a clear and relevant strategy in improving their environmental impact.
So how does business measure their flight path to achieving their sustainability objectives that, in the majority of cases, seek carbon neutrality at some point?
CSR reporting
A company’s CSR report suite will typically be published periodically to demonstrate the impact of their business activities on the 3 main principles of sustainability reporting – Environment, Society and Economy or the 3 P’s – Planet, People, Profit.
The objective is two-fold. Firstly, to show the company itself how it is performing against it’s own sustainability goals and secondly, to demonstrate the same to the external community and stakeholders.
It is important to note at this point, we are not just considering eco-friendly metrics as companies with a sustainability mind-set are also concerned about social issues like gender equality, happiness at the workplace and taking care of the communities affected by their activities. COVID has only gone to further prioritise the measures around human capital management and wellbeing.
I will look at the CSR flight path in a moment but first let’s summarise the key factors that contribute to a robust and successful Sustainability strategy.
Sustainability Ambassadorship
The definition of your company’s CSR policies is not a one-time event. Regulation and market trends develop and as such so will the contributory factors surrounding your overall CSR strategy. It is therefore prudent to have one part of your organisation devoted to this subject.
As well as owning the metrics and reporting elements, this role will help maintain and define further strategy moving forward.
Stakeholders
Leading on from the first point, it is essential that there is buy in at the senior levels of your organisation. CSR policies will require some changes to work and business practices that only
be achieved if supported from the board level.
It is also crucial to bring them along with the journey to ensure effective support and quick decision-making. Stakeholders can help by partaking in the regulatory approvals process, improving relationships proactively, or solving CSR roadblocks and potential crises.
Define a Sustainability Framework and Strategy
CSR should become part of your company’s DNA and given the same credence and priority as any core business function. Corporate decision-making should consider the impact on this CSR strategy.
Key factors
Corporate CSR objectives
Legal Requirements
Market Trends
Customer Feedback
Set the Flight path
As mentioned, larger enterprises are making clear statements about being carbon neutral at some point in the future. Just like any programme in business this has to be mapped out in terms of timeline to allow this goal to be achieved. Without a flight path you cannot measure your progress and likelihood of hitting the timescale
Set Measurable Goals
The more detailed the metrics you define the more obscure and difficult they are to measure. Try and avoid over-engineering the process and go for relevant but easily defined measures.
For instance – how many business trips are made through your T&E system, what is your staff turnover like, how many cars per day are in the car park.
Depending on the level of technology in your back office, measures can be captured relatively simply and presented to give a compelling argument in favour of your sustainability credentials.
Assess your product lifecycle – supply chain review Historically manufacturers were driven by the desire to produce products as cheap and as quick as possible. The afterlife of that product is now seen as a key driver to the sustainable production line and this goes beyond the physical plant. The links in the supply chain and subsequent suppliers to that chain have to be assessed in the same way you would for your own internal processes.
As stated companies that exhibit sustainable and innovative production practices can see improvement in customer rapport and brand loyalty and this will subsequently have a direct effect in their market share and bottom line.
Sustainability/CSR Reporting
CSR reporting is key to demonstrating a company’s sustainability credentials to the outside world. There are providers now that specialise in this level of reporting but there are certain criteria you should use to evaluate them.
There are two globally recognised reporting standard protocols – GHG (Green House Gases and GRI (Global Reporting Initiative) and if you’re looking for a any tool or software to support your CSR initiative you should assess their appreciation of these standards at the very least.
One thing that is also important to realise is that these standards are set by industry and not government so they will change modify and vary as the global sustainability journey continues – make sure your provider has a seamless way of adapting these changes.
Transparency is key here and companies are now reporting their CSR suite on their websites with easy access and download formats.
