Proviction - Responsible Leadership Blog

CSR Discussions: Wesley Gee from Canadian Business for Social Responsibility

Tom Snell — Thu, 22 Apr 2010 23:35:33 -0400

On April 1^st, Nick and I had the opportunity to meet numerous CSR professionals at Toronto’s first Sustainability Leadership Exchange. Amongst this group of experts was Wesley Gee from Canadian Business for Social Responsibility (CBSR), a member-led non-profit with the mission of ‘Changing the Way Business Does Business.’

As CSR Advisor and Member Development Manager, Wesley helps promote and improve corporate social responsibility practices in Canada. I recently had the opportunity to ask him a few questions about CBSR and Canadian corporate social responsibility.

CBSR was founded in 1995. Do you feel that there's been a significant difference in the way that Canadian businesses have responded to social and environmental concerns since then?

Wesley Gee (CBSR): Definitely, over the past few years we have noticed a significant shift in mindsets and activities from ‘random acts of kindness’ to those which are more strategic and focus on trying to link CSR with bottom line success.

Most if not all aspects of CSR have improved and are continuing to move in a positive direction (e.g. energy and waste reduction, supply chain integrity, social equity, reporting and disclosure, governance, employee engagement), though there is still much room to grow. The next big challenges will come from moving beyond ‘low hanging fruit’ into more transformational approaches so that companies can think creatively about new market opportunities, better recognise their areas of risk, and gain competitive advantage, rather than simply ‘keeping up with the Joneses’.

Where did your personal interest in corporate social responsibility stem from?

WG: It started with in 1996 through my involvement with an international student organization called AIESEC, which is based in universities across Canada and in roughly 100 countries. I meet a number of emerging young thinkers and doers who focused on topics like business ethics, sustainability and values-driven leadership. As a biology-turned commerce student these topics seemed critical in appreciating how businesses, people and the natural environment could coexist and thrive – this 3BL approach has always seemed like common sense.

I was lucky as a fourth year undergraduate to be allowed to take Masters level courses in environmental management and sustainability, which helped build a strong a foundation. Following university I lived abroad in several countries, worked for several companies, and met many talented and inspiring people. I truly learned (the hard way) how to gauge the interests of and investment from senior executives, as they were a tough bunch, but they helped me move out of my “ivory tower” and into the real world of understanding how big, bottom line businesses make big decisions.

Has there been any indication that Canadian business leaders value CSR more than their international peers, or do you feel that Canadian leadership has been lacking on a global level?

WG: We are moving in the right direction, even though Canada is not always considered to be in a leadership position on sustainability. There are a number of Canadian companies doing many positive things (e.g. Cascades, MEC, Loblaws, Hydro-Quebec), and other companies following the leadership of their internationally-based head offices (e.g. Wal-Mart, Seventh Generation, Nike, Shell). We are doing more than simply following the practices of our EU-based peers, but we are also not overly represented in lists such as The 100 Most Sustainable Companies – perhaps because we tend culturally to ‘play it safe’.

What would you say are the biggest challenges faced by businesses when making efforts to integrate CSR into their strategies and operations in this post recessionary economy?

WG: Gaining the C-suite and board level buy-in is critical as this is where big decisions and investments will be made, and where accountability will flow. However many businesses believe that once this occurs they will become sustainable, which couldn’t be further from the truth. I believe the biggest challenge is in learning how to operationalize the commitments that are coming from the top, which often requires a significant change management effort – i.e. changing the way people think about what success looks like (longer term 3BL thinking), improving corporate accountability, communicating openly and honestly, and collaborating with both colleagues and unusual suspects to capture new opportunities.

How do you see CSR and CBSR evolving over the next decade?

WG: In terms of CSR, one word: disclosure. There is a growing need for much more of it when related to disclosing company, product and project level environmental and social risks. More info, better metrics and standard practices/approaches will help businesses make business decisions, in terms of who they decide to partner with, buy from, invest in and recognise as an industry leader.

CBSR is a constantly changing organizing that has grown significantly over the past few years, in terms of our member companies, team members and overall ability to encourage and support the shift to better business practices. As CSR becomes more and more mainstream, companies will be investing in more in-house staff, while consulting firms will continue to develop and expand their CSR capabilities.

As a result, CBSR will not only need to remain ahead of the curve in terms of knowledge, networks and service delivery, we will need to strategically partner with organizations that can keep creativity high and help us further our mission of “changing the way business does business”.

To get more specific, our interactions will be more virtual and viral, we will have better touch points with the investor community, and we (along with our members) will need to be better engaged with several sectors of society to continue to thrive and survive.

What exciting news, projects, or events can we expect to see from CBSR over the next year?

WG: There is plenty of research, tools development, learning events and networking opportunities planned for our members and the broader business community in 2010. As we have a very diverse team of advisors and associates, we will be ‘specializing in versatility’, focussing on topics including employee engagement, measuring social impact, understanding the new business case for CSR, integrated water management, governance of sustainability and collaboration for managing change. We are also growing our team of advisors in Vancouver, Calgary and Toronto to match our growing membership base and needs for both executive and operational level support. More information on our upcoming events, tools and research, and employment opportunities can be found on our website at www.cbsr.ca.

Wesley Gee (BComm, MSc) is a Corporate Social Responsibility Advisor and Member Development Manager with Canadian Business for Social Responsibility. His work experience includes roles as an Industry Manager (Energy & Industrial) with The Canadian Institute, and a Market Analyst with Ernst & Young. Wesley also currently serves as a Board member with The Canadian Baha’i Business Forum (CBBF), and Chair of Board for AIESEC York.

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Blog Photo Author Name:

Razvan Caliman

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http://www.sxc.hu/profile/tsk

Small CSR Blunders that Raise Big Questions

Tom Snell — Sun, 18 Apr 2010 23:22:06 -0400

This post is dedicated to a Fortune 500 company where a friend of mine is employed. At a recent meeting in a Canadian branch, several top executives spoke about the company's commitment to environmental sustainability. Just as the presentation highlighted the many years it takes for plastics to break down, the refreshments arrived with little plastic water bottles for all. Oops!

As far fetched as this story sounds, there's an important lesson to be learned. Businesses can significantly reduce carbon emissions and donate millions of dollars, but overlooking particular small items can raise big questions about your seriousness and commitment to CSR. They may not be the most material issues that your business faces, but they often contribute to larger areas of commitment, and can raise eyebrows when not addressed.

As the old Chinese proverb goes, "Men trip not on mountains, they trip on molehills."

Five items to watch for:

1) Using Virgin Paper

Most of the biggest and best businesses today have programs and initiatives that are aimed at reducing their carbon footprint and minimizing their environmental impacts. Yet many of these businesses still use paper that contains no post-consumer recycled content and has not been sourced from a responsibly managed area of forest. Many of the excuses for avoiding post-consumer content paper are outdated. Quality has improved to meet that of virgin paper, and the price premiums have declined, and completely disappeared in some cases. A quick fix to correcting your virgin paper consumption is simply setting a policy that requires a minimum amount of recycled content in all paper purchases, or requiring all paper to be FSC Recycled Certified.

2) Printing Single Sided

While it's great to see sustainable supply chains and corporate recycling programs, it's equally important to look for ways to reduce the amount of materials you use. Almost every office still uses paper today, and the simplest way to cut your paper consumption in half is to print double sided. The biggest barrier is usually psychological, as there's a belief that double sided printing cheapens the presentation of print materials. But even for those who insist that reports and handouts should be single sided, how many drafts, articles, emails and unofficial documents do you print that aren't going to a client or your boss? Encouraging double sided printing can easily reduce paper expenditures by at least 25%, and implementation is as simple as changing this setting to default on your printer and photocopier (or perhaps giving IT a quick call, or referring to the manual).

3) Using Plastic Cups, Cutlery, and Bottles

Little paper cups at the water cooler? Plastic utensils in the cafeteria or break room? These might seem like small things, but they add up over weeks, months, and years. If you want to eliminate the amount of unnecessary waste that your office produces, it will be important to get rid of these items. Investing in reusable cutlery and cups is always a good idea, but you can also purchase biodegradable plates and cutlery if disposable items are absolutely necessary. And for workshops or meetings, a couple pitchers of water and glasses around the table is a good alternative to plastic bottles.

4) Non-Fair Trade Coffee

Another familiar item that can be easily overlooked is the coffee in your office. Since coffee isn't typically considered to be part of your supply chain, it can get left behind when deciding on social and environmental criteria for suppliers. Purchasing Fair Trade helps ensure that farmers in developing regions are receiving equitable prices for their beans, and aren't being exploited. While there might still be a lack of awareness in corporate procurement, Fair Trade is quickly becoming more mainstream thanks to strong advocates and support from most major coffee chains. Unfortunately, Fair Trade is often associated with higher prices, but premiums are actually close to negligible. The University of British Columbia has a great resource on Fair Trade Coffee, and I'd encourage a quick read through if interested in bringing Fair Trade coffee to your workplace.

5) Keeping Computers and Monitors On

Despite commitments to reducing energy consumption, few organizations ask employees to shut off their computers and monitors when leaving the office. While doing so won't prove to be your biggest area of energy reduction, it's a free and simple way to show your people that small every day actions are part of your commitment to sustainability. According to Natural Resources Canada, computers left on at night waste about $100 worth of energy per workstation. Thus every 10 computers left on cost you $1000 dollars per year. When implementing this change, you might also want to adjust the energy-saving settings, so that monitors shut off and computers sleep after a short period of inactivity. This will help ensure energy savings in case staff members forget while adapting to the change.

In most cases, a company committed to being responsible will have missed these items by accident. Unfortunately, that won't always stop certain stakeholders from questioning your intentions, growing more cynical, and providing less buy-in for existing initiatives. The good news is that you can be proactive in identifying the small items that can have big impacts.

Taking a page from the eight behaviours of a responsible leader, the best way to avoid these blunders is to engage people. Find out what is important to your stakeholders, and ask them what initiatives and opportunities your organization should be considering. While your priority should always be the most material items, sometimes the smaller issues are cheap and easy to address.

It will also be important to maintain an open dialogue with your stakeholders, and continuously seek improvement. Make giving feedback as easy as possible, and stay open to new ideas and suggestions. By having good, ongoing communication with your stakeholders, you'll be able to avoid small CSR mistakes and mitigate negative reactions for those that have slipped through the cracks.

What other small but serious blunders have you seen? Share in a comment below!

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Blog Photo Author Name:

Alexandre Jaeger Vendruscolo

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http://www.sxc.hu/profile/alejaeger

Governments Should Practice Social Responsibility Too

Nick C. Morris — Wed, 24 Mar 2010 11:50:10 -0400

It may go without saying that governments are "socially responsible." After all, our governments have been democratically elected to represent the interests of the public-at-large. By their very mandate, they are responsible to society.

But if we evaluated the social responsibility of governments in the same way we evaluate the social responsibility of corporations, how would they stack up? Are our governments - and their agencies, ministries, departments, Crown corporations, etc. - acting with leadership when it comes to environmental sustainability, workplace wellness, diversity, ethical and sustainable procurement, human rights, volunteerism and so on?

The results are mixed. Some agencies and departments are true leaders, while others  have lagged. The websites for Canadian Crown corporations VIA Rail, Hydro One, and Canada Post go into depth about their community and environmental initiatives. The U.S. Army goes into extensive detail about their sustainability efforts. The American federal government recently committed to reducing its greenhouse gas emissions by 28% by 2020. Meanwhile, the websites of Environment Canada and the U.S. Environmental Protection Agency, despite discussing their financial performance at length, do not even hint at the environmental performance of their own agencies.

A future article will go into more detail about the current state of government social responsibility. Today, I would like to discuss the reasons why we should care.

Why Government Social Responsibility Matters

Governments Are Big

Local, regional and national governments make up the lion's share of many developed economies. Government employment in OECD countries is nearly 25% of all non-agricultural employment and government expenditures can be upwards of 40% or 50% of gross domestic product. The sheer size of this economic activity implies that governments have a dramatic effect on the environment, the workforce, and society. As Pres. Barack Obama recently noted, the U.S. federal government occupies nearly half a million buildings and uses more than 600,000 vehicles. The social and environmental impact of such an operation can hardly be ignored.

Results-based Management

Corporate social responsibility (CSR) has generally suggested a deliberate approach to planning, monitoring, recording, and reporting a company's social and environmental impact. This approach is very consistent with calls for government to run itself "more like a business" and public management approaches that focus on results. Similarly, stakeholder engagement, a core tenet of CSR, is common practice at many government agencies (although more modern approaches are only starting to take root). Social responsibility is very compatible with existing government management structures.

Social Benefits & Government Mandate

For many corporations, social and environmental goals are something new, having previously focused narrowly on economic goals. For these companies, the social and environmental benefits of CSR have been something "extra" going above and beyond their traditional role as a business.

But for governments, these benefits are firmly aligned with their primary mandate. Governments that engage in deliberate social responsibility are not achieving something "peripheral" to their mission but instead something that contributes to it directly.

"Business" Benefits

Corporate social responsibility is often promoted because of its "business case" - its potential to improve the efficiency and effectiveness of the company as a whole. Indeed, many companies build more loyal relationships with customers, employees and communities. They improve their brand recognition and reputation. They cut costs and reduce waste. They inspire innovation and creativity.

But what government department or agency wouldn't enjoy these benefits too? Governments - perhaps even more so than private corporations - often struggle to attract and retain the most talented leaders. There are extensive cultures of "satisficing" in many agencies that hinder innovation. And governments face a constant challenge to maintain their legitimacy in the eyes of a finicky public. They often face extensive media scrutiny.

Government As a Role Model

Finally, governments around the world are working hard to promote and facilitate corporate social responsibility. But how can these efforts seem sincere and legitimate if governments don't practice what they preach? Governments must walk the talk if they expect corporations and individuals to follow suit. In the meantime, governments should also be learning lessons and developing best practices to be passed on to the private sector. And certain initiatives, such as ethical and sustainable procurement, can also create incentives for corporate social responsibility without the need for regulation.

In follow-up articles over the coming weeks, we will examine what governments can do to enhance their social responsibility through specific policies and initiatives. In the meantime, what do you think about government social responsibility? Should governments should become more involved or not? Is President Obama's commitment to improve the environmental responsibility of the federal government a welcome announcement? Or is it a distraction from more pressing concerns?

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Blog Photo Author Name:

Harrison Keely

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http://www.sxc.hu/profile/harrykeely

March Webinar - The Basics of CSR: Drivers & Benefits You Can't Ignore

Provictus — Fri, 12 Mar 2010 00:03:26 -0400

Don't miss out on this premium webinar offered by Provictus Consulting, available now for no cost.

The Basics of CSR: Drivers & Benefits You Can't Ignore

Does your business see Corporate Social Responsibility (CSR) as an obstacle or opportunity?

While you may consider implementing responsible business practices, are you fully aware of the forces driving CSR and the benefits it can bring? This webinar will help you understand how Corporate Social Responsibility has evolved to become an integral part of successful business, and why you can't afford to ignore it. Learn about the major pressures your organization may face to be socially responsible, and how CSR can lead to increased competitiveness on top of social and environmental benefits.

Tom Snell and Nick Morris, managing directors at Provictus Consulting, will help you understand how CSR has evolved in importance, what forces are currently driving it, and the value it can bring.

Join us on Thursday March 25th at 3:00pm (EST) for this exclusive webinar, available this time for free. Learn why the drivers and benefits of corporate social responsibility can help improve both your business and the world. Click the blue REGISTER button below.

Also, don't miss:

The Basics of CSR: Starting Your Stakeholder Conversation Right (April 29, 3:00pm EST)

The Basics of CSR: Finding the Issues & Opportunities that Matter Most (May 25, 3:00pm EST)

Getting the Most out of your CSR Report: Introduction to Reporting Guidelines

Tom Snell — Wed, 10 Mar 2010 02:29:43 -0400

The first two articles in the CSR Reporting Series looked at five reporting best practices and five steps to get your CSR report off the ground; topics to help reporting rookies get the ball rolling. Today's post will continue to help first-timers by introducing reporting guidelines. While in the past CSR reporting was typically limited to larger businesses, the last ten years have seen an increase in SME reporting, and a more widespread use of formal guidelines.

Guidelines: To use or not to use?

Not using reporting guidelines can be very tempting. You can produce reports quicker, highlight only what you think is important, and avoid transparency and scrutiny in uncomfortable areas. But as enticing as these benefits may seem, using your own reporting methodology often proves to be a short sighted strategy. Besides helping you stay focused and organized, using established frameworks helps SMEs with the very common and serious challenge of establishing CSR credibility. If you're committed to using a widely accepted reporting guideline, it shows stakeholders that you're committed to being a responsible company.

Another major benefit of using recognized guidelines is that  they allow for easier comparison with peers and competitors. Having the ability to compare your CSR performance to other organizations in your industry allows for easier critiquing, and can help provide more motivation to improve. Adopting these guidelines shows your stakeholders that you are serious about your CSR performance, and willing to be both transparent and accountable.

So now that we've touched on the benefits of adopting established guidelines, let's take a quick look at the most common. There are several guidelines in use today, but the following completely dominate the reporting world.

Global Reporting Initiative (GRI) G3

Based in Amsterdam, the Global Reporting Initiative released its first series of reporting guidelines in 2000. In 2006 the third and most recent version was released (the G3), containing 42 company profile disclosures and 79 performance indicators in 6 categories (economic, environment, human rights, labour standards, product responsibility, society). These CSR reporting guidelines are the most commonly used throughout the world, with an estimated 1500 organizations from 60 different countries using the G3 as of January 2009. The GRI allows you to report at different transparency levels (A through C, or U for 'Undeclared') based on how many indicators you adopt.

United Nations Global Compact Communication on Progress (COP)

The Global Compact is a United Nations initiative that encourages businesses to adopt and report on ten principles of responsible business. Launched in 2000, the Global Compact's ten principles revolve around human rights, labour relations, environmental impacts, and anti-corruption. While geared more towards helping larger multinational corporations contribute to the Millennium Development Goals, small and medium sized enterprises can adopt the Global Compact as well. When a business joins the Global Compact, they make a reporting commitment to produce an annual Communication on Progress (COP). The Global Compact sets specific COP requirements that must be followed, including a statement from the CEO reaffirming the organization's support for the Global Compact, a description of all practical actions taken, and a measurement of all outcomes.

Accounting for Sustainability Connected Reporting Framework (CRF)

Accounting for Sustainability, launched by The Prince's Charities in 2006, is an initiative whose mission is to help embed sustainability into the decision making and reporting process of public and private organizations. As part of its activities, Accounting for Sustainability has developed the Connected Reporting Framework, guidelines to help focus CSR reports on the long-term needs of investors and executive management. These reporting guidelines are meant to help identify the connection between an organization's social responsibility practices and its strategy, and highlights key performance indicators and progress in achieving objectives. The CRF is built on other reporting guidelines and standards (such as the GRI, the Global Compact COP, and AccountAbility), and can be used alongside these other guidelines or on its own.

AccountAbility AA1000 Assurance Standard

AccountAbility is a not-for-profit organization based in London, England and governed by multiple stakeholders. The organization works to promote 'accountability innovations for sustainable development', and was founded in 1995. At the core of its offerings are its AA1000 Series, made up of the The AA1000 AccountAbility Principles Standard, the AA1000 Assurance Standard, and the AA1000 Stakeholder Engagement Standard. AA1000 is not actually a reporting guideline, but rather a standard used to provide a framework for measuring CSR reports against the principles of materiality, completeness, and responsiveness. However, since you use these principles to measure reports, you can also use these principles to design reports. The standard can be used on its own, or with reporting guidelines such as the GRI.

While every organization has different needs, most CSR professionals typically recommend adopting the GRI G3. The Global Reporting Initiative has seen a large increase in users over the last few years, and out of the twenty-four reports nominated for in the 'Best First Time Report' category of the 2008 Corporate Register Reporting Awards, only two did not use the GRI guidelines. By providing different transparency level options, special resources and support, and free use of its guidelines, the GRI G3 is very SME friendly. However, it's important to get to know the most applicable guidelines better in order to chose what works best with your organization.

If your organization is considering adopting the GRI guidelines but not sure what reporting level to begin at, I would highly recommend reviewing Elaine Cohen's Reporting Levels 101.

One last thing to leave you with, as mentioned in What Should Your Company Call CSR? 5 Principles to Help Your Communication, do not get stuck with analysis paralysis. Instead of over-analyzing pros and cons, you should simply discuss, select, commit, and report. It's almost certain that your first report won't be perfect, but it will provide you with a solid starting point to improve on. Now stop reading and get reporting!

What reporting challenge does your organization face? How did you decide whether to adopt a reporting standard or not? Leave a comment below!

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Blog Photo Author Name:

Ivan Soares Ferrer

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http://www.sxc.hu/profile/ivanferrer

Assess Your CSR Strengths and Weaknesses

Nick C. Morris — Mon, 08 Mar 2010 04:28:51 -0400

How does your company's social and environmental performance stack up? Are you meeting the expectations of your stakeholders? Are you taking advantage of your corporate social responsibility (CSR) opportunities? Are you having a positive impact on the world around you?

An assessment is the best way to get answers to these questions. While a proper assessment involves investigating a number of areas, such as the expectations of your stakeholders, the pressures for CSR, the potential benefits, the relevant issue areas, and your major opportunities, today we review just one aspect: assessing your social and environmental performance. In other words, how do you determine your major strengths and weaknesses?

There are two major things to think about:

Your Impact: Every company has both positive and negative effects on the world around it. When assessing your company's social and environmental performance, your challenge is  to define and measure these effects.

Your Activities: Many companies also conduct policies or initiatives, either formally or informally, that are designed to enhance their social responsibility. Like any business initiative, these activities can be successful or unsuccessful, effective or ineffective. Your assessment of CSR performance should also evaluate the effectiveness of these policies and initiatives.

Assessing Your Impact

Your first step is to analyze the positive and negative impact that your company creates - both intentionally and unintentionally - for its customers, suppliers, employees, community, environment, the public-at-large, and other stakeholders. A simplified impact assessment will look like this:

Determine the areas to assess: Begin by listing the individuals, groups, and environments on which your business has a positive or negative impact. Who does your company influence? Who does it have responsibilities to? Who depends upon your organization? You might also consider those impacted by your entire supply chain.

Next, list the most significant areas of impact that your company has on each of these groups. What areas are most important to employees? To the community? To your customers? To the environment? Conversations with your stakeholders will help you develop this list, but you might also consider using CSR standards to get ideas. Standards and guidelines such as the UN Global Compact, the GRI G3 Performance Indicators, the SA8000 Labour Standard, or the Caux Round Table Principles for Business list various CSR-related issues that you can choose to include in your assessment.

Collect information about your impact: For each of these significant areas, you will need information with which to assess your impact. Impact assessment data can come from a variety of sources. Smaller businesses will find it useful to simply talk to or survey customers, employees, or other stakeholders to reveal their impressions and expectations. Relatively simple measures of environmental impact are also available, like electricity consumption (which can be converted to greenhouse gas emissions) and raw material use. Larger companies will find value in more thorough, statistically-robust methods of data collection.

Evaluate your impact: For each area that you assess, you will need to define "good performance." Does good performance mean that you meet expectations? Or that you exceed them? You might also consider the number of people affected, the value of the issue to those people, and the presence of controversy around the issue.

Evaluating Your Activities

You might have in place an ethical code of conduct, employee volunteering programs, a waste-diversion system and socially-responsible procurement, but are these initiatives effective? Are they advancing your company's social and environmental objectives? Are they improving the positive impact you have on other people? Could they be better?

The answers to these questions are important. They will help ensure you are focused on the right initiatives in the first place. They will also guide you to remedy or eliminate weak programs and build upon the strengths of successful ones.

While every initiative could be evaluated on different merits, there are three generic ones you should always think about:

Content: Is the initiative aligned with your company's business and strategy? Does it relate to your company's products, services, and/or stakeholders? Do stakeholders care about it? Does it contribute to the most significant areas that you identified when assessing your company's impact?

Management: Does the initiative have goals? Are staff members responsible for its success? Is the initiative well-communicated to internal and, if appropriate, external stakeholders? Is the impact of the initiative being measured and reported? Are there systems in place for continuous learning and improvement?

Results: Is the initiative producing desirable results? Is the intended benefit being realized? What is the magnitude of these results? Are there any unintended consequences - positive or negative - being caused by the initiative?

Next Steps

What do you do with this performance information once you have it? Knowledge of your strengths and weaknesses shows you where deficient performance can be improved and where strong performance can be built upon. Coupled with the other important elements of an assessment, you will be able to make informed decisions about your CSR initiatives: removing the irrelevant ones, improving the under-performers, and adding new initiatives in under-served areas. You will be able to focus your efforts on those areas with the greatest potential to benefit your business, society and the environment.

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Pontus Edenberg

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http://www.sxc.hu/profile/pontuse

The Truth About CSR II: Five False Promises

Nick C. Morris — Fri, 05 Mar 2010 15:03:28 -0400

Is corporate social responsibility (CSR) the best thing since sliced bread? Does it possess an unlimited ability to solve the world's problems? Will it revolutionize our systems of supply and demand, and consumption and production? In our previous "Truth About CSR" article, we examined some of the myths and misconceptions that circulate about CSR. Today we'll look at the other side: the false promises of CSR and the truth behind them.

Efforts to implement corporate responsibility and sustainability are laudable and they bring great benefits. But sometimes the promises exceed the reality. As businesspeople interested in CSR, it's important to know what we can and cannot expect. It's important to understand the limits of CSR just as well as its opportunities.

So here are the five "false promises" of corporate social responsibility:

CSR Always Pays for Itself

The related promise is that it is perfectly aligned with business profit. Indeed, many of us in the industry have strongly argued the business benefits of CSR, to the point that one might believe that CSR always pays for itself. And it certainly is the case that CSR can often provide profit benefits for the firm. But this isn't the whole story.

Misaligned Strategies: If you do want business benefit - financial benefit - from CSR, then it's not good enough to just do anything. Your initiatives must be tied to the company's goals and operations. Otherwise, it is quite likely they will not pay for themselves and yield the benefits you might expect. If corporate responsibility is implemented poorly, it certainly will not pay for itself.

Values-Driven Strategies: Not all CSR initiatives are designed to provide financial value back to the firm. Many occur because of values and beliefs about how the company should operate and its role within society. This is OK. But it's important to recognize the value here is social and the return is a social return on investment. The initiative cannot be judged solely on its financial benefits.

CSR is for Every Company

Every company is already engaged in socially responsible activities, even simply by providing employment and paying taxes. CSR generally recognizes a more strategic approach, but nevertheless, does it naturally follow that CSR is right for every company? Should all organizations be considering their social and environmental impacts and taking steps to moderate them in a positive way?

I would like to say yes (it would mean more clients for my business) but the answer is no. CSR is not for every company. It is inappropriate at many companies, and here's why:

Companies Lack the Prereq's: Many companies and their leadership lack the basic prerequisites to engage in CSR. For example, it requires a personal interest on the part of someone leading the effort, and ultimately it requires alignment with the personal values of most people at the firm. It requires sincerity of purpose and the courage to implement the changes required. Don't bother with CSR if you don't have the foundation.

Companies Lack the Opportunity: Most companies are capable of making positive social, environmental and economic changes. But some simply aren't. And this can be exacerbated if you only care about achieving a very specific benefit for your company. If you lack the opportunity to achieve this benefit through CSR, then don't bother. Most managers lack a solid grasp of their company's social and environmental opportunities, so assessing them is a good first step.

Everyone in the Firm will Benefit from CSR

The complement to CSR being for every company is that it is for everyone. Will CSR benefit everyone at the company? After all, it is about a positive impact on organizational stakeholders, and employees are a major group. There are great benefits - personal and professional - that accrue to employees and managers from CSR. So why wouldn't everyone benefit?

Because it changes the power dynamic at work. CSR programs involve change and that change can intrude upon the mountains of power and influence that certain individuals have built up within your organization.

Ultimately, this will probably hurt the greedy manager that has horded knowledge and resources. Or the one that derives satisfaction from disrespecting their subordinates. Or the one whose "success" has been driven by a disregard for anything but profit at-any-cost. Or the one who has relied upon shady business practices. Or many others whose modus operandi is simply inconsistent with socially responsible business.

Indeed, some people just don't care! While most people find satisfaction in making the world better, others are driven solely by their own personal profit. They will view CSR efforts with extreme hostility. I wouldn't recommend trying to change them. Just determine whether they belong in your company.

CSR Will Solve All the World's Problems

Will CSR be the answer to famine, war, climate change, species extinction, drugs, energy crisis, unemployment, poverty, etc.?

Well, no. It will help. But problems involving corporations, or under their influence, are just a fraction of the social and environmental challenges we face. Many of these problems occur on an individual level. Others on a political level. And while corporations can often help to overcome these issues, they are just one actor that must be involved.

So we engage in corporate social responsibility with optimism and enthusiasm that it will make a positive difference in the world, but tempered by the realization that others must be involved and we must make personal and political changes too, in order to achieve the world in which we want to live.

CSR Will Overcome Government Ineffectiveness

I mentioned in the previous post that some are worried government's role will be usurped by the growth of corporate social responsibility. But others have actually been enthusiastic about this possibility, citing government apathy and ineffectiveness as reasons why different actors - namely consumers, corporations, and civil society - must step up to lead social and environmental progress. Indeed, there are many reasons why governments are handicapped when dealing with specific social and environmental issues involving companies.

So to an extent, CSR will help to overcome the ineffectiveness of government in managing certain social and environmental issues. But CSR is no substitute for government. Why? Because:

Companies lack a real ability to coordinate many different actors and negotiate with them, especially across borders.
They are well-suited to address specific, firm-level problems, but often not macro problems that affect a country as a whole.
They do not have the redistributive powers that economically-developed governments have with their systems of taxes and transfers.
They are not representative of the population. They are, essentially, undemocratic. Consumers and shareholders certainly have the power to guide corporate policy, but even consumers do not represent the entire population, and those with greater purchasing power have more influence. That is certainly not how we envision our democracy.
They lack an absolute power to mandate social and environmental performance. (Although they can sometimes be very influential, like when Wal-Mart tells suppliers what to do.)

Have you encountered other false promises about CSR? Share in a comment below and we can discuss them. And if you haven't yet read the other article in this series, you can do so here: The Truth About CSR I: 10 Myths & Misconceptions.

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Lysanne Ooteman

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http://www.sxc.hu/profile/Protect

The Truth About CSR I: 10 Myths & Misconceptions

Nick C. Morris — Mon, 01 Mar 2010 06:42:55 -0400

Does CSR mean philanthropy? Is it primarily a PR issue? Is an expensive luxury that hurts competitiveness? Or is it a big business issue only? In this two-part series, I will dispel come of the most common myths, misconceptions and false promises surrounding corporate social responsibility (CSR). In this first article, we look at myths & misconceptions: what mistaken beliefs about CSR are most commonly held and what is the truth behind them?

Some of these myths are also commonly heard as objections - reasons why a business shouldn't or cannot engage in CSR. But as we'll see, they quickly fall apart even when exposed to some simple logic.

1. CSR is a PR/Marketing/Communication Issue

Corporate social responsibility is more often than not the child of those responsible for a company's marketing, public or government relations, or general corporate communications. This setup recognizes that a crucial piece of CSR involves stakeholder engagement and that some of its major benefits involve the company's image and benefits.

But what about the rest of it? What about  employee engagement? What about your suppliers and supply chain? What about operational efficiency, resource consumption, and waste? Packaging and facility design? What about volunteerism? Governance? Ethics codes? Customer service?

PR-focused CSR can neglect these issues. It can even sometimes ignore important stakeholders by being overly outward-focused, not recognizing the importance of employees, owners, and suppliers to the process and the objectives.

CSR involves public relations but, at the end of the day, is really about so much more. Leaders should be careful not to confuse CSR and PR. A more holistic approach is necessary to realize CSR's true potential.

2. CSR is Corporate Philanthropy

A similar misconception is that CSR primarily consists of corporate philanthropy - donating a portion of profits to charitable causes. Philanthropy can certainly be an aspect of CSR, but it is hardly fundamental. This misconception arises for four reasons:

Because the charity of large companies has been one of the most visible aspects of CSR.
Because philanthropy is already easy for people to understand. Defining CSR as philanthropy is a sort of cognitive shortcut.
Because philanthropy is fairly easy to implement. To engage in philanthropy, you need only write a cheque.
Because there is a long history of charitable donations being tax deductible by corporations. Philanthropy is well-established in the mainstream of corporate activities, while CSR itself is still emerging.

A focus on philanthropy leads to ineffective CSR programs that fail to achieve very dramatic benefits for the community or the company. The fact is, a company has far greater resources to tap for the sake of social good than its earnings before income tax. Philanthropy can be an effective component of the CSR puzzle, but it is just one piece.

3. CSR is Expensive

"We can't afford to do corporate social responsibility." The misconception that CSR is an expensive luxury is widespread, and it's rooted in the other myths, like the thought that CSR only involves giving money away to charity. Indeed, if that's all you do, it will be expensive, and probably won't provide much return on investment. But as we've already pointed out, that's not CSR.

Most initiatives cost little or nothing. The best initiatives to drive employee engagement and happiness don't cost a dime, they're just about treating people differently. The same goes for customer service. Community involvement can often be costless as well. And sometimes, even philanthropy can be free - if, instead of giving your own case, you work to encourage and facilitate donations by others (such as at the point of sale).

Many initiatives create savings. Some initiatives, especially environmental ones, can result in a reduction in the overall energy and resources that you consume. This can cause you to reduce your expenses, as a result of CSR.

I have one more objection to this myth. If some companies - big or small - apparently cannot afford CSR, then why are all of them engaging in it already? That's right, every company is already engaged in some socially beneficial activity, even if just by making money and providing employment. It would be hard to say you couldn't afford to do those things. And while definitions of corporate social responsibility generally involve a more strategic or formal approach, there is nothing about such an approach which is inherently expensive. Ultimately, CSR is about finding socially responsible initiatives that are appropriate (and beneficial!) for your business. How can you not afford that which will make your business stronger?

4. CSR Hurts Competitiveness

The corollary to the expensiveness argument is that corporate social responsibility is inconsistent with the firm's goals of profit maximization. Many have specifically claimed that by engaging in CSR, they would be placed in a competitive disadvantage.

For corporate social responsibility to damage a company's competitiveness, it would have to be expensive or would have to direct resources away from more productive alternatives. We've already addressed the expensiveness issue, but competitiveness is also about the productivity issue. Which brings me to my next point:

Many initiatives benefit the company economically. They win customers and allow the company to enter new markets with new products. They help recruit and retain top talent. They boost the image and reputation of the firm. They differentiate the company from its competitors. Do these things hurt competitiveness?

After all, it begs the question: If CSR is bad for competitiveness, why are companies in many industries rushing to be leaders in their CSR performance? (For example, the intense rivalry between Coca Cola and Pepsi)

Three things to remember:

CSR is about opportunities. Find the focus areas that will improve your competitiveness, rather than the options with no benefit!
CSR is about the long term. If you are stuck living quarter-to-quarter, you might need an attitude adjustment before CSR will make sense to you. CSR is about building a strong and sustainable company that will excel well into the future, not about maximizing this one quarter's earnings.
CSR takes some guts. If your customers aren't yet buying on ethical criteria, perhaps you should be engaging them, encouraging them, and educating them as to why it matters.

5. CSR is Impractical in a Recession

If corporate social responsibility simply invovles giving money away to charity, then this is definitely true. When CSR is viewed as an expensive luxury, untied to the company's strategic goals, then it simply consumes scarce resources - resources that are even scarcer in hard economic times.

But we know now that CSR is about opportunities to make your company stronger and more resilient. This doesn't suddenly lose its importance in a recession. If anything, it becomes ever more paramount. Ask yourself whether, in a recession, you could say:

We don't need the loyalty of our most important stakeholders
We don't need to be seen as a respectable, trustworthy, upstanding citizen
We don't need to be as efficient and waste-free as possible
We don't need our staff to be engaged and inspired by their work

I said before that resources are even scarcer in a recession, but sometimes even this is not completely true. Sometimes, even more resources are available. Companies that see a fall in demand but that don't lay off staff can actually have a surplus of employee productivity. What better way to keep them active, engaged, and learning then to involve them in CSR-related projects?

6. CSR Violates Fiduciary Duty

In most jurisdictions, corporate law mandates that directors and managers act in the best interests of their shareholders - the owners of the corporation. This requirement is often interpreted to mean that management must strive, within legal reason, to maximize the company's profits at any given time. Indeed, the argument offered in 1970 by American economist Milton Friedman was that if shareholders wanted social responsibility, they would give their own money to charity rather than invest it in corporations (as if CSR = philanthropy). Their investments in corporations exist solely to achieve an economic return.

But to claim that corporate social responsibility violates the duty of directors and managers makes several flawed assumptions:

CSR is inconsistent with the goals of shareholders. This could sometimes be true (every company is different!) but is false in general. Whether the goal is short term profit maximization or long term wealth creation, CSR can usually contribute (but especially toward the latter goal). And with the drivers of CSR growing each day, it is quickly becoming a necessity for businesses desiring profitability and growth to demonstrate their responsible business practices.
Managers only owe a duty to shareholders, not other stakeholders. This certainly isn't true. In a legal context, corporate managers have, on many occasions, been held liable for damage done to non-shareholders. Owners are not the only entity that permits a corporation to exist; society at large grants it its license to operate.
"Corporate" Social Responsibility and "Personal" Social Responsibility are perfect substitutes. Friedman suggested that in lieu of corporate social responsibility, individuals should do it themselves (if they so desire it). If social responsibility is simply philanthropy, this would be possible. But it's not, and the simple fact is that individuals do not have the same opportunities as corporations to better the world. Thus, many shareholders will encourage CSR even if it does not provide an economic return (and at least some of the growth in socially-responsible investing is due to this), because it provides a desirable social return.

Indeed, if the shareholders of public companies really didn't want CSR, they could simply sell their stock. We would expect a fall in prices amongst the companies that engaged in the most CSR activity. If they really thought CSR was contrary to their goals, we would see shareholders rising up in opposition to its growth. We don't. Even in Europe, where institutional investors take a much more active role in the management of the companies they own, CSR is rapidly growing.

7. CSR is for Big Business Only

"Corporate" social responsibility. It sure sounds like a big business issue. And it's certainly something that big businesses are preoccupied with. Around 80% if the world's largest companies regularly issue CSR reports. Can that be said about small and medium sized enterprises (SMEs)? Certainly not. So is CSR principally a big business issue

To answer this question, examine two things: the drivers and benefits of CSR, and the resources of small businesses. In other words, do SMEs have the motivation to engage in social responsibility, and do they have the resources necessary to implement it?

The answer to both of these questions is a resounding yes. SMEs, like their larger cousins, are facing demands from consumers and their supply chain to demonstrate social responsibility. They have the same need to build customer and employee loyalty. They too want to build a strong and sustainable business that will last and provide long-term value. And their owners and managers and employees too care about social and environmental issues. They case about CSR.

And they are capable of doing it. In fact, there are good arguments why SMEs are better able to implement social responsibility programs, due to their flexibility, speed, culture, and closer relationships with key stakeholders, for example. Big businesses have a tough time getting everyone at the company on-board. Small companies are much more able to build the support and leadership needed for the program.

It is true that it CSR looks different in small companies, and SMEs will engage in different initiatives and will have different focus areas. Regardless, corporate social responsibility is a small business issue, no question about it.

8. CSR is Less Important Than Other Business Functions

"I agree that CSR is important, but we need to fix our customer service and human resources first." Even those that recognize the importance of corporate social responsibility sometimes deprioritize it, suggesting that other business "functions" and "strategies" are more critical.

But this uncovers another fundamental misperception about what CSR really is. It is not a function like marketing or human resources. It is not a strategy like total quality management or customer relationship management.

Rather, it is an integration of all of these things and every aspect of the business. It is a way to do every function better and every strategy better, by enhancing the positive impact and mitigating the negative impact that each of these strategies have on your most important stakeholders.

If CSR is about making HR stronger, how can you say that HR is more important? If CSR is about making marketing more effective, how can you say marketing is more important? And if CSR makes operations more efficient, how can operations management be more important?

9. CSR is Immeasureable and Thus Unmanageable

"You can't manage what you can't measure" goes the old management adage. If CSR is tough to measure, how can we hope to be able to manage it?

In fact, corporate social responsibility can be measured, it often is measured, and it is getting easier to measure. Many - if not most - areas of corporate responsibility can now be quantifiably measured. Not only that, but standards are emerging (the GRI G3 being the best example) that specifically identify the metrics one can use when reporting CSR performance.

Many businesses, especially smaller companies, overestimate the cost and difficulty involving in measuring their performance. But it's often easier than they think. A few simple processes and habits can routinely provide a great deal of useful information. A lot of the data is already right at their fingertips. And the management adage is correct, collecting this information will help a company to manage its CSR.

The real issue is not measurement, but comparability. How do we compare a company that reduces pollution with a company that provides community education opportunities? That issue will never be solved; it is a moral issue that each individual must judge for themselves. But it hardly hinders, and certainly encourages, the measurement and reporting of CSR performance.

10. CSR Displaces Government Power

Finally, an interesting complaint I occasionally hear is that corporate social responsibility somehow displaces the power of governments to regulate corporate activities and maintain social and environmental standards. And this displacement of regulation will allow companies, ultimately, to be more irresponsible.

That's right: by improving their business practices, and by being more socially responsible, companies will be able to be more irresponsible.

As you can guess, I don't buy it - and neither should you. If governments lack the will to regulate, then this is a political problem, not a corporate one. At the very least, this is not an indictment of corporate responsibility programs. Because even if there are (and there are) companies engaging in CSR simply to persuade government that regulation is unnecessary:

These companies are still subject to new and existing regulation;
The burden still remains on government to determine whether the voluntary corporate actions are authentic and adequate and whether regulation is necessary. CSR has caused them to lose no power, vested in them constitutionally, to do this.

Other Myths

What other myths and misconceptions have you run across?

CSR expert Wayne Visser has a list of seven other CSR myths. Since I tried to avoid overlapping with those that he mentions already, you should definitely check out his article too.

Finally, you might have the sense from this article that CSR is the best thing since sliced bread - or that I seem incredibly biased. Stay tuned this week for a follow-up article that will address both of those by discussing the "false promises" of CSR and what you shouldn't expect from it.

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Blog Photo Author Name:

Claudia Meyer

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http://www.sxc.hu/profile/claudmey

45 Forces Driving Corporate Social Responsibility

Nick C. Morris — Mon, 22 Feb 2010 05:02:10 -0400

As the popularity of corporate social responsibility (CSR) and sustainability grows, it is interesting to investigate the various drivers of its growth. Why are businesses engaging in CSR? What are their motivations? Where are the demands coming from? As we'll see in this article, these drivers are many and varied, and they come from every different stakeholder group imaginable.

I have organized these drivers into overarching themes. Despite this separation, it is worth noting that many of these drivers are related and complementary. It is a necessary simplification that we review them here in a linear fashion.

With no further ado, here are the 45 biggest drivers of corporate social responsibility and sustainability.

Stakeholder Priorities

Increased Public Expectations: More than ever before,  the public-at-large is placing social, ethical and environmental expectations on organizations large and small. Many companies are now engaging in corporate social responsibility simply to catch up with these expectations.

Ethical Consumerism: Ethical consumerism is a strategy to encourage sustainability and responsibility in our systems of production and consumption, by making purchase decisions based on social and environmental criteria. This strategy is increasing in popularity. In the UK, for example, spending on ethical food and drink increased threefold from 1999 to 2008. Green home expenditures increased fivefold and spending on eco-travel and transport increased ninefold. [See also: Guide to Ethical Consumerism]

New Markets: Not only are these trends increasing demand for socially-responsible, sustainable products, they are also creating whole new markets centered on them. For example, organic foods, green brands, and locally-produced goods are niche markets quickly becoming mainstream. Further, heightened demand for energy conservation and renewable energy has propelled a rapidly-growing environmental industry focused on innovation to meet those needs.

Socially Responsible Investing (SRI): Consumers aren't the only ones demanding social responsibility. Investors large and small are incorporating ethical criteria when making their investment decisions. By 2007, at least $2.7 trillion in assets was managed using an SRI strategy, an increase of nearly 18% from two years earlier. Institutional investors control the majority of these assets but SRI-focused mutual funds, ETFs, and other pooled investment products are also growing in popularity. SRI indices, such as FTSE4GOOD, the Jantzi Social Index, and the Dow Jones Sustainability Indexes, are also facilitating investment in socially responsible companies.

Shareholder Activism: Investors are also bringing their social concerns straight to the boardroom. Shareholder resolutions related to social and environmental issues have steadily increased year-on-year. Through these resolutions, activist investors attempt to sway management policies either by passing a binding resolution or simply by forcing the board and senior management to respond publicly to social concerns. And shareholder support for these resolutions is growing too: a 57% increase from 2005 to 2007.

Managers' Values: Despite these external drivers, perhaps the most important drivers of CSR at many companies, especially smaller ones, are the personal values and attitudes of business leaders and owner-managers. Evidence shows that many social responsibility initiatives simply arise because the CEO feels a moral obligation to act while recognizing the opportunities the company has to create positive social change. Middle managers too, are often the socially-responsible change agents, even without the support of top management.

Lack of Meaning at Work: Some of this activism by managers can be attributed to feeling that their work is unimportant and insignificant. Many managers have been successful in their business roles but have not been rewarded with a meaningful impact on the world. Many are turning to CSR as a way to add meaning to their everyday work by having a visible positive impact on their workplace, their community, and their world.

Grassroots Employee Activism: Indeed, employees at all levels are suffering a lack of meaning at work. Even at the lowest levels of many companies, entrepreneurial employees are launching their own initiatives targeting social and environmental issues within the context of their company. Oftentimes, word of these initiatives and their successes will reach the boardroom, and will inspire top management support for a more formalized CSR program.

CSR & Ethics Education: In response to the growing interest in corporate social responsibility, companies are sending staff to workshops focused on sustainability, ethical decision making, and other dimensions of CSR. MBA programs worldwide are incorporating these aspects into their curriculum. These programs aren't only in response to CSR interest, they also enhance interest by reinforcing CSR principles, establishing them in the mainstream, and giving managers the confidence to implement CSR successfully.

CSR Reporting Norms: Nearly all of the world's largest corporations now report their social and environmental impact (see the KPMG study here). And as more companies report, more are being driven to follow suit. The reporting norm is even spreading to smaller companies. As a driver of CSR activities, this norm is important because these companies need to create positive initiatives to include in their reports. Of course, some reporting companies that aren't sincere about CSR have attempted to "greenwash" their activities, but this becomes more difficult as the public becomes more better informed and more demanding.

Demographics

Social Awareness: A greater proportion of the population is now acutely aware of the major social and environmental issues that plague our planet. To a large degree, our education systems can be credited for this. Social problems and environmental threats are now covered extensively in most school systems. But media coverage and the activism of non-governmental organizations and celebrities are also responsible for a mainstream concern about society and the environment.

Entitlement Generation: Generation Y has been labeled - often pejoratively - the "entitlement" generation, for having high levels of self-esteem and an expectation that the world should yield to their preferences. But Generation Y is also helping to drive CSR forward because, more than any generation before, they are demanding jobs which are meaningful, companies that are responsible, work-life balance, and an environment that makes them feel good, respected, and appreciated. Even with youth unemployment between 15 and 20%, many first-time job seekers are declining second-best job offers, instead waiting for companies offering a better experience.

Diminished Trust in Business

Financial Crisis: The financial crisis has eroded trust in many industries. 77% of Americans trusted businesses less in 2009 than a year before. 58% trusted companies to do what is right in 2008 versus just 38%, the lowest level in ten years, when asked again in 2009. Companies working to regain public trust will use corporate social responsibility to bolster their image and reputation.

Corporate Ethics Scandals: In the last decade, a number of high-profile corporate scandals, from Enron to AIG to Nortel, have not only eroded corporate trust, but have also spurred calls for greater accountability and assurances of corporate responsibility. Perhaps most disturbing, these scandals impact whole industries, not just the parties involved. In the wake of Enron and Arthur Andersen, for example, public trust in auditors fell and the accounting profession as a whole was forced to do damage control.

Perceptions of Greed: Financial crisis and ethics scandals, while bad in their own right, have created a much more dire situation: a public perception that many companies and senior business leaders are driven solely by short-term greed. To combat this perception, leaders are doing three things: a) taking action to demonstrate long-term thinking, b) publicly showing generosity, and c) considering the needs of their full range of stakeholders. All three of these things are key components of CSR.

Supply Chain Demands

Ethical Consumerism "Trickle Down": For a time, business-to-business companies were insulated from the demands of ethical consumers; their corporate clients didn't generally have ethical buying criteria. But all that has changed as customers are now looking deep into a product's entire supply chain when evaluating the company that sells it. Subcontractors, outsourcers, and suppliers of all kinds are now being held to the same social and environmental criteria as front-line, customer-facing distributors.

Sustainable Procurement: Ethical consumerism is just one factor driving sustainable procurement, but companies with all sorts of CSR motivations are incorporating their supply chain into CSR programs and policies. In fact, ethical procurement is one of the most popular CSR initiatives because, depending on the supplies being bought, it can be fairly easy to implement.

Certification Programs: In order for buyers to verify the social and environmental record of their suppliers, many are turning to certification programs that provide independent verification. ISO 14001 was one of the first and most popular of these programs, but many more have been launched since. And as these programs become more numerous and well-established, they will facilitate sustainable procurement by those for which it would have been impractical before.

Ethical Labeling Initiatives: Some buyers look to ethical labeling initiatives to provide the information they need to make ethical procurement decisions. Others are driven to purchase ethically because these labels exist on their own products. Ethical labels put information about a product's social and environmental impact directly on the packaging, and this transparency motivates sellers to engage in CSR and ethical sourcing in order to improve these statistics. As a profound example, Walmart's upcoming sustainability index, which will roll out to each of its 100,000 global suppliers, will drive CSR initiatives at most, if not all, of those suppliers.

Competitive Advantage

Waste Reduction & Operational Efficiency: One common myth of corporate social responsibility is that it is costly to implement. But on the contrary, many companies are being driven to engage in responsible business practices out of a desire to save money. Firms that conserve energy & resources and create a more efficient value chain help the environment and their bottom line. Some companies are even earning revenue through their activities. For example, some are installing solar panels on roofs and selling energy back to the grid.

Fluctuations in Energy & Resource Prices: Another reason driving energy and resource conservation is that it helps insulate companies from fluctuations in resource prices, a significant business risk in many industries.

Workforce Engagement & Pride: Employees that share the social, ethical and environmental values of their company are far more likely to be engaged, to be productive, and to stay with the firm. Even as far back as 1997, this fact could be appreciated. One study showed that amongst those employees saying their organization's ethics were positive, 86% were highly committed to the company. Among those not regarding the firm's ethics highly, only 14% were similarly committed. As companies in many industries struggle to recruit and retain top talent, and as workforce engagement is at some of its lowest levels ever, many companies will engage in CSR to overcome these challenges and bring their workforce together.

Commoditization: As globalization spreads, as market barriers break down, and as technology is diffused, the products and services sold in many industries are becoming commoditized. That is, they are becoming indistinguishable from supplier to supplier in terms of quality, service, convenience and price. Social and environmental performance has become a new way for companies to differentiate themselves from their competitors and command greater market share, especially when the traditional methods of differentiation are infeasible.

Brand Image & Reputation: For some companies, corporate social responsibility is becoming a core component of their overall branding strategy. Given the positive impact that CSR can have on a firm's reputation, and the usefulness of CSR to bond with stakeholders on an emotional level, firms are increasingly turning to it as an alternative to traditional marketing activities.

Technology & Media

Affordable "Green" Technology: As technology improves, costs for renewable energy and "green" technology will fall, becoming more attractive to buyers from a cost-benefit perspective. Ultimately, the argument that these sustainable technologies are too costly will completely erode. We are already seeing instances where these practices can save money, and as technologies improve, the number of these instances will increase.

The Internet & Social Media: Once, the internet enhanced the public's access to information - including information about social issues and the social & environmental performance of companies. With "Web 2.0", this diffusion of information has reached new levels. On Facebook, Twitter, Myspace, thousands of review sites and tens of thousands of discussion forums, people's compliments, complaints, and criticisms are readily shared with the world. And customers are listening. Thanks to social media technology, even a single incident can become a major controversy (consider Dave Carroll's broken guitar song on Youtube that created a PR nightmare for United Airlines). Companies ignoring their broad spectrum of stakeholders now risk a backlash that can be viral in a matter of hours.

Mobile Access to Information: Information once accessible only while sitting in front of a desktop computer can now be at your fingertips wherever you find yourself. Standing in the dairy aisle of the grocery store with just a cell phone, you can scan the bar code of a product and learn about its environmental footprint and the producer's CSR record. Information like this - easy, fast, and free - is making it far more practical for individuals to make split second decisions based on social and environmental criteria. Although still new, these technologies will quickly enter the mainstream. [For more information, see the discussion of "Good Guide" in our article about ethical consumer resources.]

Crowdsourcing: "Social media" isn't the only thing giving individuals a louder voice. The traditional media is complicit too. Many prominent news outlets (CNN perhaps being the most famous example) have turned to the public-at-large to provide news reports and opinion. Their focus is now less on reporting the facts of a story, and more on reporting public reaction. Expert commentary is slowly being supplanted and some networks are even using social media applications, like Twitter, to comb and report public sentiment.

The Environment

Climate Change: With widespread scientific agreement that human activity is responsible for increasing greenhouse gas concentrations and rising mean surface temperatures, the pressure is on for those responsible to halt the trend. Thus, many consumers are searching for products with smaller environmental footprints. And businesses, which directly cause the majority of all greenhouse gas emissions, are reducing their dependence on fossil fuels, reducing waste and unnecessary packaging, and taking other measures to avoid the consequences of global climate change and the public criticism associated with their role in it.

Resource Depletion: Oil is undoubtedly the most often discussed depleting resource, but other renewable and non-renewable resources are also facing resource depletion as demand grows beyond the capacity of current supplies. These constraints drive up prices and lead progressive companies to seek alternatives and find ways to manage current resource stocks in a more sustainable fashion.

Development and Industrialization: To meet consumer demand domestically and abroad, and to facilitate their own economic development, developing countries like China, India and Brazil are undergoing rapid industrialization. But we already know that our current levels and systems of production and consumption are environmentally unsustainable. Should the planet have any hope of maintaining our current standards of living, these systems will need to change dramatically. Companies are being pressured to engage in CSR, particularly the innovative aspects of it, in order to realize this change.

Globalization

Inequality: Globalization was once touted as a great equalizer - a force that would close the gap between countries rich and poor. To some extent, this has happened. One need only look at Taiwan, Hong Kong, Vietnam and now Mainland China to see how export-oriented growth can indeed bring millions of people out of poverty. But, by and large, the benefits of globalization have accrued disproportionately to multinational companies and their shareholders and the consumers in the "West" that enjoy the low prices of products built overseas. CSR is being driven by those that seek to redress this inequality and some specific initiatives, like Fair Trade, target this issue directly.

Heightened Competition: Globalization has also forced domestic companies to compete like never before, often with foreign firms that have different core competencies, resources, and strengths. In response to this heightened competition, some companies are turning to their social and environmental record to differentiate themselves. Others have no choice, because their new competitors are already leading the way in CSR and they are forced to play catch up.

Values Exporting: Domestic companies that also operate in developing nations offer a unique opportunity for those concerned with international development. By persuading these companies to adopt the development cause, they can "export" things that we largely take for granted, like a living wage, occupational health and safety, and freedom from harassment. Individuals and groups inside and outside of these companies are recognizing this opportunity and are pressuring firms to carry out this bidding in order to apply their social values overseas.

Government & Regulation

Regulation on Social & Environmental Reporting: In a fairly recent development, some jurisdictions are now pursuing legislation or securities regulation that would force companies to report on social and environmental performance, similar to mandatory financial reporting to shareholders. These laws will have a similar effect as the CSR reporting norms already established for large companies, but more pronounced and more widespread.

Taxes, Penalties & Subsidies: Governments are also using positive and negative financial incentives to encourage more sustainable behaviour by both individuals and corporations. Here, governments attempt to reward companies for the positive impact they have on society as a whole, and punish them for negative impacts. Typically, these social benefits and costs (often referred to as "externalities") are not included in the normal prices that a company faces, which is why profit-maximizing firms might engage in less CSR than would be socially-optimal. Through financial incentives, governments attempt to correct this problem and encourage appropriate levels of CSR.

International Treaties: Another important type of government intervention driving CSR involves national accession to international treaties. Generally these treaties target specific areas of CSR, for example the UN Declaration of Human Rights, the Convention on the Rights of the Child, the Convention Against Corruption, the Montreal Protocol on Substances that Deplete the Ozone Layer, the Convention on Environmental Impact Assessment in a Transboundary Context, and so on. Some treaties have been straightforward, built upon a widespread existing consensus. Others have been far more controversial, such as current attempts to develop an ambitious climate change mitigation treaty. In either case, these treaty efforts are indicative of growing pressures for public bodies to address CSR-related issues.

Voluntary Regulation & Industry Codes of Conduct: Whether out of attempts to avoid binding government regulation or simply out of a growing consensus that social issues are important, many industries are attempting voluntary regulation. For example, the Electronic Industry Code of Conduct is a set of guidelines on labour practices, health and safety, environmental management, governance and ethics that can be voluntarily adopted by interested companies. The mere existence of these codes encourage CSR activities, and can punish the image of companies that hesitate to participate.

Perceived Government Failure: Through most of the 20th century, social and environmental concerns were considered the domain of government. Now, despite the actions discussed above, many feel that government has failed to properly address many of these issues. Lobbyists, whether individual citizens or well-organized advocacy groups, are turning their attention to companies, who have the potential to solve many social and environmental problems directly, without the lag and bureaucracy of government. [See also: Why Not Leave "Social Responsibility" to Governments? for more reasons.]

Global Governance Challenges & Political Conflict: A major area where governments have difficulty is in issues of global governance. These are issues that, like climate change and international trade, involve and affect people and organizations in many different countries. The response to these problems requires the cooperation and coordination of many different jurisdictions. Sometimes, this has been straightforward, like in some of the international agreements named above. Other times, it has been incredibly contentious and has led to a great deal of political conflict. In these cases especially, there is pressure on other global actors, especially corporations, to take voluntary action instead.

Non-Governmental Organizations

NGO Pressure: A major role of the non-governmental organization (NGO) is to raise public awareness of social issues and to pressure those with the power to fix those issues. This activism is responsible for much of the increase in public awareness of social issues and the questionable activities of some companies, as well as shifting attitudes toward the social role of the corporation.

Partnership Opportunities: Corporations and NGOs historically had adversarial relationships, precisely because of the pressure corporations felt from NGOs and the fact that many NGOs regarded companies as untrustworthy, unfeeling, capitalist machines. Today, many companies and NGOs are recognizing the benefits of cooperation. Corporate-NGO partnerships have grown considerably in recent years and companies can enhance their credibility and reputation, build relationships with the social sector, and gain expertise. The possibility of these partnerships is thus just another driver of CSR activities.

International Standard Setting: Major international standards and methodologies, such as ISO 14001, ISO 26000, the UN Global Compact, the Equator Principles, the GRI Guidelines, the AA1000 Standards, and the SA8000, drive CSR in at least four ways. According to Wayne Visser of CSR International, these codes can be activist tools that strive to shift awareness and behaviour; they can generate and consolidate consensus; they can embed incremental improvement, giving companies a path to follow in order to improve performance; and they can completely change industry sectors, like the Forest Stewardship Council has done to the forestry products industry.

Independent Certifiers & Auditors: The emergence of independent certifiers of social and environmental performance, together with public interest in CSR performance, leads to demands for and expectations of the performance needed to meet those standards. Companies attempting to demonstrate their social responsibility to stakeholders will be motivated to improve performance in order to attain the recognition of certifying bodies.

CSR-themed Membership Associations: Finally, companies in all industries are being encouraged to join membership associations focused on social responsibility and sustainability. For example, Canadian Business for Social Responsibility (CBSR) in Canada, Business for Social Responsibility (BSR) in the UK, and the Boston College Center for Corporate Citizenship in the US. These organizations provide a platform to share stories, best practices, advice, and encouragement regarding the practice of CSR.

What Else?

What else is driving corporate social responsibility at your company? Please leave a comment below!

Blog Photo:

Blog Photo Author Name:

cmonville

Blog Photo Author Link:

http://www.flickr.com/photos/4x4paper/

2010 Trust Barometer: Corporate Social Responsibility More Important Now Than Ever

Nick C. Morris — Thu, 11 Feb 2010 06:25:55 -0400

Two weeks ago Edelman announced their 2010 Trust Barometer and revealed encouraging findings: in the aftermath of the recession, public trust in business is beginning to recover around the world. But the study - the tenth in an annual series that surveys thousands of people on five continents - also had significant findings relevant to corporate social responsibility (CSR). Here we summarize four major issues revealed by the report, of which anybody interested or involved in CSR should take note.

Trust Recovery is Temporary; Long-Term Solutions Needed

Findings: The informed global public has a significantly higher belief that businesses will "do what is right". In the United States trust in business increased 18% from last year. But despite this increase, 70% suspect that business and financial companies will "revert to old habits". Further, the key drivers of trust this year are simply related to the end of the financial crisis: businesses punishing irresponsible employees, paying back their debts, and reducing executive compensation.

Implications: The current trust recovery is temporary and has come on the back of temporary measures. If companies are to maintain stakeholder trust in the months and years ahead, they will need  long term strategies to do so. Companies must demonstrate to the public at large that there is no more "business as usual". Even those completed unconnected to the financial crisis must reassure stakeholders that their way of doing business is a responsible and sustainable one.

Trust, Transparency, Citizenship Key to Reputation

Findings: Profits, service, and quality were recently the biggest drivers of corporate reputation. But in the aftermath of the financial crisis, everything has changed. Now, transparent and honest business practices, trustworthiness, frequent communication and corporate citizenship have entered the top spots. Financial returns are now the least important factor used to evaluate a company's reputation.

Implications: While quality, service, and financial stability are still important, business owners must recognize the growing importance of a clear commitment to responsible business practices. With transparency, responsibility, and citizenship on the mind of most investors, consumers, and employees, only companies that successfully address these issues will be able to maintain their reputations and relationships with the public.

All Stakeholders Important, Not Just Shareholders

Findings: Around the world, a majority of people agree that when a CEO makes an important business decision, the interests of all stakeholders - investors, customers, society, employees, and government - are equally important. This contrasts with the typical notion that primarily shareholders should guide the company's direction.

Implications: The public now expects that business leaders will weigh the interests of all stakeholders when making decisions. The age of the investor-led company is over. Only companies that properly integrate the needs of all stakeholders will be able to thrive in this decade. Thus, stakeholder engagement will be a major challenge faced by businesses of all shapes and sizes, and it is one that most organizations are still unprepared to face.

Corporate-NGO Partnerships Build Trust

Findings: A vast majority of people are significantly more likely to trust companies that partner with non-governmental organizations for a social or environmental purpose. Companies working with NGOs on issues like poverty, disease, human rights, and climate change will much more quickly build trust and a favourable reputation.

Implications: Companies already engaging in social responsibility efforts would be well advised to augment their current efforts by teaming up with a like-minded non-profit/charitable organization. Companies just getting started could use such a partnership as a launchpad for their corporate responsibility strategy. These partnerships contribute to the company's trustworthiness and will also improve the quality of their CSR efforts.

See the 2010 Edelman Trust Barometer for more information.

Blog Photo:

Blog Photo Author Name:

Dimitri Castrique

Blog Photo Author Link:

http://www.sxc.hu/profile/dimitri_c

What Should Your Company Call CSR? 5 Principles to Help Your Communication

Nick C. Morris — Tue, 09 Feb 2010 15:34:21 -0400

When implementing corporate social responsibility (CSR) (or whatever you want to call it) you will have to call it something. The name you use may seem like a subtle and insignificant issue, but this is not the case. You will find yourself talking about CSR far too often for comfort, and more often than not, people will not understand what you mean. Using a CSR name successfully is key to effectively communicating your CSR efforts. It could mean the difference between enthusiastic buy-in and skepticism & hostility.

Last week we saw why names are important and what makes a good name. This week we'll examine the five essential principles when choosing what name to use in your own company.

Consider the sheer variety of terms you can choose from. There are the usual suspects like sustainability, corporate (social) responsibility, citizenship, stewardship, double or triple bottom line, accountability, and sustainable development. Some companies use more generic terms like responsible business practices, ethical business, or simply good business. Or you could invent a phrase of your own, like how Hewlett-Packard famously coined The HP Way to describe  its management culture and its commitments to community responsibility and the advancement of humanity.

#1: Use What Makes Sense For You

Find and use a term that reflects your approach, your strategy and the major economic, social, and environmental issues faced by your company. Are your efforts primarily directed at improving your environmental impact? Then a term like sustainability might be most appropriate. Does your company manage fragile but precious resources? Perhaps stewardship is ideal. Do you feel that addressing these issues is a moral obligation? A term with responsibility could communicate this. And if none of the common terms really reflect your company's approach, you could invent something new.

When writing on this blog, I use what makes sense for me: corporate social responsibility or simply corporate responsibility. I use these terms not because they are fundamental, but because they contribute to my objectives. They are widely known (albeit not necessarily widely understood) and thus people will recognize them when they get to this site. I want all the business leaders that are trying to understand and leverage CSR to find this site, and so I need to use the terminology they will be looking for. Your objectives, of course, will be different! So pick a term that reflects that.

#2: Consider Your Stakeholders

What will your stakeholders (your customers, employees, investors, community members, etc.) understand and identify with? What terms will resonate with them? What are the issues that are most important to them?

If you plan to communicate your corporate responsibility actions to your stakeholders (and your employees, at least, will be involved) then the terms you use will need to make sense to them as well.

Consider: if you invent your own phrase to describe your CSR, this phrase could be more difficult to explain to outsiders than a common phrase like sustainability. And if they come to your website looking for CSR, sustainability or a related term, they might not find it if you exclusively use your own terminology. On the other hand, inventing a phrase could ultimately result in less confusion, since people won't bring in their own (incorrect) assumptions about what the term means.

#3: Say What You Mean

Whatever term you choose should be accompanied by a definition. Don't just throw out a litany of words and expect people to understand them. When you choose terms to describe CSR, explain what they mean to your company. This is true even (and perhaps especially!) if you are using common words like sustainability which mean many different things to different people.

Your definitions should be simple and clear. They should relate to things that people already understand. Remember that they must, first and foremost, make sense to your stakeholders. In a recent comment, Chris MacDonald offered a few good suggestions about how to begin definitions of CSR, but you could use these for the definition of any term:

"CSR is the obligation to..."
"CSR is the belief that..."
"CSR is a mechanism to..."

#4: Be Repetitive & Consistent

If you switch back and forth between the words sustainability, CSR, and ethics, people will understandably get confused. Do you mean different things when you use these different words? Or do you mean the same thing but are trying to sound more interesting?

When speaking about unfamiliar concepts, it is important to be consistent in how you explain them. The last thing you want to do is confuse people. Confused employees become insecure and feel threatened. Confused customers are skeptical and will question your sincerity.

And don't be afraid to be redundant and repetitive. Use these new terms. In conversations, speeches, emails, interviews, training, newsletters, intranets, websites, brochures. Everywhere. Encourage other people to use them. These terms will only become comfortable when they have been repeated a thousand times.

#5: Get Going

It is important to pick an appropriate name and to craft an effective definition for it, but it also important to move on and start acting upon your corporate responsibility goals. So avoid analysis paralysis at all costs.

Don't go crazy trying to find the perfect term than everyone likes. Remember, the particular name you choose doesn't matter all that much (after all, you can just invent something). What matters is how you use it. What matters is what you decide that name will mean. And will you ensure that everybody understands what you mean?

So pick a name that sounds good, is appropriate to your goals, and makes sense to stakeholders. Define it clearly. Use it consistently and use it over and over again. This is just the beginning of an effective CSR communication strategy. But it is an important first step, so take it seriously and you will be off to a great start.

Blog Photo:

Blog Photo Author Name:

Rohan Baumann

Blog Photo Author Link:

http://www.sxc.hu/profile/wbd

CSR, By Any Other Name?

Nick C. Morris — Fri, 05 Feb 2010 15:28:43 -0400

What's in a name?" mused William Shakespeare, "That which we call a rose, by any other name would smell as sweet." But for Romeo and Juliet, names meant a lot and had deadly implications. Shakespeare, of course, was an expert at giving names to meaning, introducing hundreds of words to the English language, and putting thousands more to print for the first time. And he knew that names do matter.

So what are the implications when we use names like corporate (social) responsibility (CSR)? Or accountability? Citizenship? Sustainability? Responsible business? Triple bottom line? Corporate social performance? Ethical business? And so on...

Does it matter that we are plagued with so many names? And as a business leader that just wants it to work, is figuring out what the heck to call "it" just another thorn in your side?

Some will argue that a deluge of names for corporate responsibility creates confusion. Especially among those that are new to discussions about CSR. Others will argue that an abundance of terms simply indicates that CSR is complex and has many different angles. The different terms are different ways of approaching CSR, and they help to impart meaning and create clarity.

Do these names create clarity or confusion? To answer this question  we'll consider why names are important and what makes a good name. And to be as practical as possible, we will investigate how your business should name its own corporate responsibility efforts, in a followup post next Tuesday.

Why Are Names Important?

Names are important because they are associated with meaning. And sometimes they impart meaning. And sometimes they impart inadvertent meaning. For example, the phrase "corporate social responsibility" has been criticized severely. The term "corporate" alienates small businesses, the term "social" overlooks environmental and economic issues, and the term "responsibility" paints a picture of obligation, disregarding CSR's great opportunities.

"Triple bottom line" is a similarly nuanced expression. It has been criticized for suggesting that the results of corporate responsibility can be neatly aggregated and reported like the "bottom line" of a financial statement. This, of course, is not possible - not least of all because there is no common currency with which to measure CSR - so the term triple bottom line could be considered misleading. (Ethics & CSR professor Chris MacDonald has published on this very topic: read his paper here.)

When names convey a meaning different from our intentions, they create miscommunication and confusion.

Why Are Names Not Important?

As Shakespeare suggested, a rose is a rose is a rose, whether we call it a rose or we call it something else. We should judge a rose no different whether we call it rose, rosa, ruusu, роза, bara, or warda (all acceptable names, depending on where you happen to live!).

Thus, as long as you can connect the label ("rose") to the meaning ("any of the wild or cultivated, usually prickly-stemmed, pinnate-leaved, showy-flowered shrubs of the genus Rosa"), the name has been successful. The actual content of the name is unimportant, only how it is used.

For tangible, easily observed things, this is simple. It is easy to teach a child what a rose is by showing them flowers in the garden. It is another matter altogether to explain love, art, beauty, justice, honour, fairness. But we manage (arguably).

What Makes a Good Name?

Whether a name is important or not, a name can be successful or not. A good name is one that is associated with a meaning that is widely understood among those that use the name. Once again, a successful name is:

Associated with a meaning (giving it validity) and,
Widely understood within a group (giving it reliability).

It may not be important that a rose be called a rose, but it is important that everyone understands the name we choose to call it.

The same can be said for any of the names we might use to describe corporate responsibility. Whatever name we use, it must be widely understood by the business leaders, consultants, policy makers, NGOs, investors and other professionals putting it to use. Even the general public now has a need to understand and put these terms to good use.

How are we doing? Are our terms for CSR successful?

The terms we use for corporate responsibility, sustainability, etc., are still deficient in both validity and reliability.

Many are still unsure about what corporate social responsibility and its related terms mean. As I've mentioned before, there still exists a large proportion of the business population that should understand CSR thoroughly but does not. But this will come. This decade will bring about the mainstreaming of CSR: bringing widespread awareness of these issues to the vast majority of business professionals. With awareness will come understanding.

The second major issue is that people that do "understand" CSR, understand it in different ways. It seems everyone in the industry has their own definition (and I am no exception). People still can't seem to agree on what it means.

Another problem is that of synonyms. Sometimes, different CSR-related phrases are used interchangeably. Other times, they are used to mean different things. For example, the IISD, in their CSR Implementation Guide, uses the terms CSR and sustainability interchangeably. Others, however, consider sustainability to primarily be focused on environmental issues, while CSR is more holistic, encompassing economic, environmental, and social issues.

The coming mainstreaming of CSR might actually serve to make this issue worse. As more and more people begin using these terms, there will be more and more opinions about what these terms should mean. But, as I will elaborate in a future blog post this month, all of this contention is misguided and counterproductive. Long story short: Corporate responsibility, like love, justice, or honour, is a complex concept about which people will inevitably have different perspectives. None of these concepts need definitions to be specific in order to be understandable.

On Tuesday we will put all of our discussion to good, practical use, by describing the ways that your company can successfully use CSR language (or your own language) to describe your corporate responsibility efforts, reduce miscommunication, and enhance buy-in for your CSR programs. How do you decide what to call it? We'll see on Tuesday.

In the meantime: How do you feel about the different terms being used to describe corporate responsibility? Do you think they create confusion or clarity? And what can we do to steer more towards clarity? Post your comments below!

PS. As I was putting the finishing touches on this article, I noticed that Dave Harrhy of The Acacia Group had just hours before posted an article about the terms "CSR" vs. "Sustainability". If you haven't yet checked out his new blog for Socially Responsible Leadership, you should do so here. The particular article I ran across was this one.

CSR expert Fabian Pattberg conducted an online poll and found "Corporate Responsibility," "Corporate Social Responsibility," and "Corporate Sustainability" to be the three most popular terms. We just can't seem to avoid the word corporate. You can read the full results here.

Blog Photo:

Blog Photo Author Name:

Luz Maria Espinoza

Blog Photo Author Link:

http://www.sxc.hu/profile/analab01

Why Not Leave "Social Responsibility" to Governments?

Nick C. Morris — Tue, 02 Feb 2010 03:32:37 -0400

If we had efficient, benevolent governments, would we need corporate social responsibility? Is it not the role of the government to manage, protect and appropriately distribute public goods? If a government is fulfilling this role, won't society and the environment be well taken care of? Why would the private sector need to go beyond this? Why is corporate social responsibility necessary at all?

There are at least six major reasons why governments are not enough to manage the social and environmental challenges faced by businesses.

Photo by rmcwilson

Jurisdiction

Social and environmental issues easily cross borders, but government jurisdiction does not. Governments generally lack the authority to police the actions of individuals and companies operating outside their borders. Even when punitive measures are possible, they can be extremely infeasible due to political side effects. Some attempts to create global governance structures have mitigated this problem in certain specific situations, but these structures are still largely incomplete.

Multinational companies, therefore, often take voluntary action to address global issues. Instead of government pressure, the pressure has come from  other stakeholder groups, such as customers, communities and investors.

Incongruent Values

Does your government share all of your preferences and values? Does it share the preferences and values of your company's most important stakeholders? Does your government feel that the social causes you believe in are the most important social causes to support? Does it share your view of the environment?

More often than not, our governments are not fully representative of our social values. And if your stakeholders are unique in any way, this is more likely to be the case. In order to support these values, individuals and businesses must act without government sanctions. The government cannot be counted on to address these issues on its own.

Oftentimes this problem can also occur when government preferences are being strongly guided by influential lobby groups. This distorts public policy even more, hampering the government's ability to act upon the public's values.

Uniformity

In order to be fair, government regulation must be applied consistently. Laws can differentiate between broad categories of people and companies (like how our income tax has different deductions for different types of people) but they cannot begin to understand the unique business model and set of stakeholders of every single company.

As I often argue, every company is different and every company must take a different approach to the social and environmental problems it faces. Governments are not capable of exercising this level of detailed differentiation. It is as inefficient for them to do this as it would be for them to tell each company what to produce and who to hire.

Satisficing

Government regulation often creates a "good-enough" mindset: as long as you meet the government standard, your actions are satisfactory and sufficient. This does little to encourage the continuous improvement and long-term innovation that is necessary to solve complex local and global problems.

Businesses, on the contrary, when operating in competitive markets and driven by demanding stakeholders, have an incredible ability to innovate, especially when their survival depends on it. When social responsibility initiatives occur in the private sector, they can benefit dramatically from this innovative drive. Indeed, the majority of innovation in corporate social responsibility has come from the efforts of impassioned businesses, not from legislation and regulation.

Inefficiency

There are hundreds, if not thousands, of different aspects to corporate social responsibility. Some of these are significant, easy to understand, and observable, such as whether or not a company hires child labour or slave labour. It is relatively easy for a government to police these issues.

But most aspects of CSR are far more nuanced. Could a government police disrespectful bosses, poor customer service, and an apathetic attitude to the local community? In most cases, governments can't even handle these problems within their own agencies! It would be inefficient and ineffective for governments to address the multitude of small, complex, and intangible issues - occurring at companies big and small - that are some of the most important parts of CSR.

Companies also have an easier time implementing social responsibility programs because they can act unilaterally and they must appease fewer stakeholders than governments. Many consumers are recognizing this fact, and are addressing their social concerns no longer by voting for politicians, but instead by "voting" for companies through ethical consumerism.

Business Opportunities

Not only do businesspeople have moral motivations for engaging in social responsibility, they also have economic motivations. Corporate social responsibility improves hiring and retention, increases sales, improves a company's reputation, and generates stronger interest from stakeholders. To relegate the management of social issues to governments would be to ignore these benefits.

And moral motivations are important too. One of the most compelling arguments I hear for CSR is simply that businesspeople want to be involved in solving the world's problems. By and large, people are aware of the the major social and environmental issues we face, and they feel a personal responsibility to help solve these issues. They often get great personal satisfaction from this. Corporate social responsibility is a way for these individuals to take their personal responsibility to the next level and achieve greater impact.

What do you think? Are there other reasons why governments can or cannot handle the issues associated with corporate responsibility?

What is Corporate Social Responsibility? A 3-Minute Primer for Leaders

Nick C. Morris — Fri, 29 Jan 2010 05:00:26 -0400

More and more, business leaders are being presented with pressures - from within and without - to engage in what could, broadly, be called corporate social responsibility (CSR). Others are jumping on the bandwagon out of personal interest: a moral desire to employ their companies in the challenge of making the world a better place. This too, CSR.

But just what is corporate social responsibility?

"Academic" definitions abound. For example: CSR is the voluntary integration of economic, social, and environmental considerations into a company's decisions and activities. These definitions are useful, but they miss the bigger picture: why is social responsibility important and relevant to the decisions that business leaders make on a daily basis?

Corporate responsibility is about impact

All companies have positive and negative effects on other people, places, environments, etc. Your business provides employees with a livelihood, and perhaps a meaningful purpose, but it also causes  stress and diverts them from their children's softball games from time to time. You might sell products that fulfill an important market niche, but that are also harmful to the environment. You have a positive impact and a negative impact.

CSR is simple: make the positive impact big and the negative impact small. If you're already trying to do this, great, you're already engaging in corporate social responsibility. Of course, like any business practice (e.g. marketing, strategy, research, leadership) there is mediocrity, and then there is excellence. Since most everyone engages in a "mediocre" level of social responsibility, some would only consider true CSR to be the pursuit of excellence.

It's up to you, but if you are a leader that happens to feel social responsibility is important, you might wish to focus on the more ambitious definition.

Be all that you can be

In any case, engaging in CSR involves an optimization dilemma: given limited resources and imperfect information, how can I maximize the positive effects of my business while minimizing the negative effects? In fact, CSR involves making many such decisions, each and every day. In this way, the "academic" definition above is quite accurate. Decision makers must integrate economic, social, and environmental criteria into the decisions they make. But remember the purpose of this integration: to maximize the good, and minimize the bad.

And of course, while the goal may be simple, achieving the goal is a complex journey. I certainly do not dismiss the difficulty of these endeavours. But armed with this definition, you know enough to begin building the social responsibility of your organization. The next time you make a decision, formally consider:

Who and what will be affected by this decision, and how?
Are these people and things important to me?
Which decision will maximize the positive impacts? What other alternatives would further enhance the positive?
Which decision will minimize the negative impacts? How else could these problems be mitigated?

Socially-responsible companies are not perfect organizations with zero negative impact. They are simply companies that have consistently engaged in this strategy of maximizing the positive and minimizing the negative. They have discovered their opportunities to do both things, and they have acted upon those opportunities.

Defining CSR

Before I wrap up, a few words about the plethora of CSR definitions in circulation. Doubtful is this the first you've read, and certainly will it not be the last.

You need not adopt my definition for CSR to be successful. Nor does this definition necessarily contradict others. But find a way of understanding CSR that works for you. This is part of the challenge and the beauty of CSR, and perhaps of business in general. Every business is different, and everyone can - and should - be doing different things for different stakeholders when it comes to CSR. The best definition is the one that makes sense to you and your business. Find it, articulate it, and live it.

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A New Decade of Corporate Responsibility

Nick C. Morris — Tue, 26 Jan 2010 07:46:57 -0400

Where is corporate social responsibility (CSR) heading? What will it look like in 2010 and beyond? Will CSR become more important or less? What will drive it forward? And how will the next ten years compare with the decade we just finished?

What Have We Done?

Photo by colinhughe

The previous decade was certainly an important one for CSR, as corporate sustainability and responsibility efforts achieved legitimacy. At the beginning of the 21st century, the challenge was to establish a "business case" for corporate responsibility. Managers asked whether adopting a strategic approach to social responsibility could offer any benefit. Now, we have moved beyond the business case. Companies large and small are using CSR to not only bolster bottom lines, but also to drive social agendas and improve quality of life.

Some of the biggest names in business have hopped on the sustainability bandwagon. Starbucks, for example, spent the decade implementing an extensive program. Even Wal-Mart's leadership announced an ambitious plan to become a good steward for the environment and produce zero waste. But smaller companies were perhaps the most impressive success stories. Companies like Seventh Generation, ShoreBank, New Leaf, Zappos, Clif Bar and countless others thrived this decade by using corporate social responsibility as  a fundamental piece of their business strategy.

Of course, there were setbacks too. The disingenuity of some companies led to allegations of "greenwash" and concerns that corporate responsibility efforts would simply become shallow PR stunts. Also, the development of new social responsibility practices this past decade were largely supply-driven. Companies that become leaders in CSR and pioneered best practices in the field did so out of their own interest, not particularly because their demand dictated it. To some extent, this limited the spread of corporate responsibility and the innovation supporting it. That said, we did see the emergence of new sustainability-driven markets - especially with the overwhelming confirmation of the presence of global warming - that for some companies became quite influential.

Going into 2010, corporate responsibility appears modern, legitimate, and here to stay. So what's next?

What's Happening Right Now?

The next two years of corporate responsibility will largely be driven by the aftermath of the global recession and growing concerns about the environment.

The financial crisis will have brought social responsibility concerns to the doorsteps of companies that once thought themselves immune. While manufacturers and miners once bore the brunt of the scrutiny for their environmental and human rights impact, firms in finance, insurance, and related industries are now facing their greatest challenge yet: regaining public trust and salvaging broken reputations. Due in part to the economy, we will also see a renewed focus on employee-centric CSR as companies that begin to recruit once more will need new ways to connect with a debilitated and dejected workforce.

Sustainability initiatives - green building, renewable energy, sustainable architecture, process improvement and waste reduction, etc. - will continue to be a primary CSR interest area, particularly as new technologies make these initiatives even more attractive and governments continue providing incentives to aid their development. In particular, we may witness a tipping point this decade when renewable energy technology is developed that demonstrates distinct and significant cost advantages over non-renewable sources.

Another immediate trend to watch is measurement. While the past decade was responsible for the creation of many important tools for CSR measurement and reporting, such as the GRI G3 Guidelines, only in the next decade will these become widespread and will the public pay close attention. This will be facilitated by those who put this data in the hands of consumers. Timberland led the way with their product "nutrition" label, but more salient examples, like Wal-Mart's sustainability index, are right around the corner.

Where Will We Be in 2020?

But the next decade will be responsible for far more significant developments than those listed above. If 2000-2010 brought legitimacy to CSR, then 2010-2020 will bring the demystification and mainstreaming of corporate social responsibility.

Despite achieving legitimacy, corporate responsibility is not yet widely understood like other business operations are (marketing, human resources, manufacturing, etc). And it is hardly yet considered a crucial function for most businesses, in particular the majority of small and medium sized businesses that run our economy. Even amongst long-time business owners, the mention of "CSR" will generate blank stares and calls for clarification. So if the past decade was about proving that corporate responsibility was a worthwhile endeavour, this new decade is about making it accessible to and understandable by all.

Notably, it will not be necessary to achieve some common definition of CSR in order for this demystification to take place. Corporate responsibility is an inherently complex concept, and like other complex concepts (freedom, love, quality, justice, etc), a single, common definition is not necessary for widespread understanding. What will be necessary will be to clarify what CSR can and cannot do (opportunities and limits) and the processes, tools, and techniques that can facilitate successful implementations.

The mainstreaming of CSR will largely be driven by necessity. While much of CSR innovation in the past decade was supply-driven, demand for social responsibility will mushroom in this decade as customers become better educated and more concerned with social and environmental issues. Perhaps the biggest demand will come from the supply chain, where buyers are already seeking guarantees about social performance. More and more, we will see corporate responsibility as a competitive challenge for companies in a wide array of industries.

Because of this, we will also see CSR taken more seriously. Companies that attempted disingenuous implementations recently have failed. Some failed quite spectacularly. An enlightened consumer population, armed with real-time mass communication technologies like Twitter and Facebook, will scrutinize these organizations like never before. And if these companies are interested in remaining competitive, they should know by now that they will need to find their sincerity.

2020 will certainly not mean the end of history for corporate responsibility. There is much to do before and there will be much to do after. But this will be an important decade. We will see an exponential increase in the number of companies that adopt CSR as a key priority. We will see some great successes, plenty of mediocrity, and a few train wrecks. And we will learn many lessons, generating the greatest amount of social innovation in our world's history.

What are your plans for the decade? Leave a comment below.

The Time Value of CSR (What Are You Waiting For?!)

Nick C. Morris — Fri, 15 Jan 2010 03:56:00 -0400

The "time value of money" is a fundamental principle in the study and practice of finance. It asserts that a dollar today is more valuable than the same dollar one year from now. The rationale is that a dollar today could be invested in projects that provide some sort of return. If you only receive that dollar one year from now, you miss out on these investment opportunities. Money in the future has an opportunity cost that reduces its value.

Photo by introgic

Last week a colleague noted that the same point could be made about time itself. It is generally more valuable to have an hour of free time today instead of one year from now. The things I build with my time today could potentially benefit myself and others more if I build them today versus a year from now. Just think, is it not most important to spend time with your children now, when they are young and growing? Is it not more valuable to do those sales calls, write those blog posts, or visit those trade shows this year rather than five years from now?

Okay - I'll try not to belabour the point. What are the implications for corporate social responsibility? Consider...

A donation made today is more valuable than a donation made tomorrow because charitable activities are generally:

Urgent: The people that charities help need help now, and for every moment that goes by, pain is inflicted and opportunities are lost.
Self-reinforcing: When a charity is successful, its success cascades. If a child can be sent to school, a cycle of poverty and desperation can be ended permanently. If this occurs now, instead of 20 years from now, an extra generation could be saved for the same absolute price.

For similar reasons, a day spent volunteering might have twice the impact if done now versus ten years hence. Or, if your definition of corporate social responsibility involves a happy and healthy work environment, consider all that would be lost by taking five years to institute it.

This point could be argued about any social responsibility initiative. It is a subtle and not at all revolutionary fact that action today is worth more than action tomorrow. But it is a fact all too often ignored when we delay getting involved with causes we believe in and charities we otherwise support.

How many times do we say, "I should do something, but I'm not sure what; I'll figure it out later." Or, "I'll get involved when my business is bigger, my finances are stable, the economy recovers, I settle down, and the stars align." (I have certainly been guilty of saying several of these at various points in time!)

Celestial alignment aside, these could be logical justifications. But if you make the decision to delay for any of these reasons, you had best be weighing the opportunity cost of your choice. You might not be rolling in cash with which to donate, but the money you do have will be worth much more if given today instead of "someday." And you may be far too stressed at work to find time to volunteer, but every passing day is slipping by, never to return.

And some people just cannot wait for you. Consider the recent earthquake in Haiti (see yesterday's blog post for information on how to help), where the death toll is estimated between 50 and 100 thousand. In a disaster relief effort, minutes can make the difference between saving lives and recovering bodies. But a lack of money, supplies, and equipment has slowed down governments and humanitarian organizations that are struggling to respond to the crisis. Certainly, you might be in a poor position to make a donation right now, having just racked up record credit card debt over the holiday season. But what will be the cost of your delay?

So if you've ever said "I'll get involved later," think about what you're missing out on. Think about the people that need your help today, and what they will have to do in the meantime while they wait for you to get around to it. Think about the countless intrinsic and extrinsic benefits you could be rewarded with, right now, by getting involved with something easy but important.

Why Wait?

Many business leaders put off getting their company involved because they don't know where to begin and are unsure of their most important opportunities. This uncertainty is justified but easily overcome.

Others feel they are not in a proper "position" to help out. We lack the money, time, flexibility, information, and so on. Often we assure ourselves that, as soon as circumstances change, so too will our generosity.

I've seen this occur in two forms. In one case, it is a manifestation of the uncertainty above: the individual does not understand what they are capable of, often for so little. In the other case, it is a flawed form of selfishness, where the individual feels they are supposed to perfect their own affairs before they worry about anyone else's ("Once I get my own life in order, then I'll worry about helping someone else"). I say "flawed" because this disregards the immense, self-serving benefits that they could be achieving for themselves by their involvement in a social cause or two. Charity is best done for selfish reasons! So if you decide to be selfish, at least do it right.

What Now?

Decided to stop waiting around?

If nothing else, answer one key question: "What does social responsibility mean to me and my business?" We will feature many more blog posts about exact ways to answer this question in the coming weeks. If you can still sit around after having a clear understanding of your company's opportunities, then I cannot help you.

At the very least, have your company do something small that will make a common sense improvement in the lives of people that you and your staff care about. It need not be profound, dramatic, or paradigm-shifting. It need only matter to you and to the beneficiary.

Start small. Do one thing. Get your company involved in a small responsibility campaign - just to see whether you're capable of sticking with it. You could get involved with a local non-profit, start a fundraising campaign, provide pro bono services to particular markets, reduce your office's environmental footprint, and so on. Be sure to track your progress and the impact you are having, and communicate this to your employees and anyone else involved.

Doing something special need not be costly, time-consuming or stressful. Indeed, it can be tremendously rewarding. The secret is just to get started. After all, it's about time!

Catastrophe in Haiti: Should You Bother to Help Out?

Nick C. Morris — Thu, 14 Jan 2010 05:01:23 -0400

Tuesday evening, shortly before the sun would set over Port-au-Prince, the worst earthquake in 225 years rocked the Haitian capital, killing tens of thousands, displacing millions more, and flattening much of the vulnerable city. A day later, the estimated death toll is approaching 100,000: nearly half the number of fatalities of the 2004 Indian Ocean Tsunami and 50 times the fatalities of 2005's Hurricane Katrina.

Photo by angells60640

Vital infrastructure, dozens of government facilities and hospitals, and the bases of international aid organizations including the United Nations Stabilization Mission and Médecins Sans Frontières, have been completely destroyed. The ability of rescue workers to respond to this emergency has been severely constrained.

A Global Emergency

For every minute that aid cannot reach the men, women, and children of Haiti, the death toll will climb and the long-term effects of the crisis will snowball. Rapid action is required and it is likely that your government and humanitarian organizations located in your country have already mobilized to provide assistance. Courageous rescue workers - the citizens of dozens of countries, rich and poor - are already on the scene or on their way.

But according to Caryl Stern, president of UNICEF in the United States, humanitarian workers that lack supplies and equipment will be unable to do their jobs. The spokesman for the Haitian Red Cross called  the situation overwhelming and noted a lack for many basic supplies and equipment. Even large organizations like the UN and the Red Cross have limited resources with which to provide aid. Cash donations are critical in order to provide supplies like water purification tablets and medical kits, temporary shelters, and sanitation systems.

What You Can Do

If you wish to support your fellow compatriots dispatched to save lives in Haiti, I urge you to make a donation or help other people to do so.

Donate. Cash donations are the fastest and most effective way that everyday citizens can save lives in Haiti. Be sure to provide your donation to a legitimate humanitarian organization; the FBI has already issued a warning that fraudsters may attempt to collect bogus donations. An excellent Mashable article earlier today profiled trusted organizations that are active in the rescue effort. I personally recommend CARE, Doctors Without Borders, Oxfam, World Vision, or your local Red Cross or Red Crescent Society.

Encourage others. Do your friends and family members know how easy it is to help? Tell them about your donation, why you did it, and how it made you feel.

No Gifts Please. If you have an upcoming birthday, anniversary, or other special occasion, encourage your friends and family members to make an emergency donation to an organization on the ground in Haiti, instead of buying a gift.

Get more information. Educate yourself about the crisis. CBS News has extensive coverage, as does the CBC and the BBC.

What Your Business Can Do

If you own or manage a business, your opportunities to help out are even greater.

Point of sale collections. Many businesses are making it as easy as possible for patrons to support the relief effort by creating donation opportunities at the point of sale. Choose a well-known relief organization, educate people about the crisis, and encourage customers to donate their change or a specific amount like $5. If you do a lot of volume, this could add up extremely quickly. Contact the aid organization to see if they have resources to support your fundraising efforts. [EDIT: Be sure to check out a smart article from the Selfish Giving blog about how to make these programs successful.]

Bribe your employees. Let your employees know about the crisis and how you feel about it. But you could also consider giving time off in exchange for a donation. Let people leave early one day if they'll make a donation equal to their pay. The point is not so much to provide an incentive, but instead to demonstrate to your staff how seriously you consider the situation. [EDIT: Another strategy is to offer to match employee contributions dollar for dollar up to a certain amount. This too will communicate your seriousness.]

Spread the word. In what ways does your business communicate with people on a daily basis? Where can you post information about the earthquake and donation opportunities? Your store or office? Your email signature? Your website? Your newsletter? Press releases? Invoices or receipts? What else?

Finally, remember that catastrophic things happen to good people all the time, and unfortunately the need for international aid agencies will never disappear. Why not learn about the other activities of the International Red Cross and Médecins Sans Frontières / Doctors Without Borders? Consider making monthly donations to agencies like these, so they can respond more quickly next time.

Godspeed.

Sneak Peak: Provictus in 2010

Nick C. Morris — Thu, 07 Jan 2010 18:24:46 -0400

First allow me to wish a very Happy New Year to all of the readers here at Proviction, the Responsible Leadership Blog. Thank you for supporting us these past few months as we launched the blog, and thank you especially for providing your feedback so that we can constantly make it better.

Starting immediately, this blog will take a much more active role on the site, with at least two new articles each week. In the beginning of the year, our articles will focus on why social responsibility is important to the modern business - big and small - and how leaders can assess their company's greatest risks and opportunities.

Photo by claudmey

But that's hardly all that we are up to in 2010. Also coming soon:

Assessment Service: In February we will be releasing details about a new service that allows businesspeople to determine:

the current state of corporate social responsibility in their company,
the pressure their company is facing on social issues, and
the specific opportunities that would be most rewarding and effective for a company in their position.

Webinars: We will be continuing our series of free webinars to share knowledge about corporate social responsibility. In the New Year we will also be adding a new series of premium webinars. Each will focus on the specific tools and techniques that leaders can use to master a particular area of their corporate social responsibility.

Guidebooks: Beginning in April, Provictus will be releasing a series of guidebooks designed specifically for the business owners and managers that need to understand the risks and opportunities they face from corporate social responsibility. Our guidebooks will answer the questions you have about the relevance of social responsibility and how to implement social responsibility programs effectively.

Redesigned Guide to CSR: Our Guide to CSR will be getting a face-lift and many new sections, all between now and March.

Stay tuned to this blog (subscribe here: by email | by rss) where you'll be the first to get updates about these new resources.

I hope this New Year brings prosperity and fulfillment to all of you, and thank you again for your support!

Five Steps to Get Your CSR Reporting Off the Ground

Tom Snell — Tue, 01 Dec 2009 22:59:27 -0400

In the first article of this series we briefly discussed the importance of reporting your social responsibility initiatives. Done well, good reporting can add significant value to your responsible leadership. But done poorly, it can cause your social responsibility efforts to regress, and damage your credibility.

So it’s no wonder that many businesses who actively engage in socially responsible behaviour avoid corporate social responsibility (CSR) reporting all together. It takes time, effort, and planning to do well. But few things worth doing ever come easy, and seeing how reporting is essential in improving your CSR performance, communicating with stakeholders, and being held accountable for your commitments, any business that takes responsible leadership seriously should not overlook it.

Photo by Colin Kean

Many small and mid-sized organizations are particularly good at failing to report their CSR activities, but this is often due to the lack of knowledge and direction needed to get them started. Getting your CSR reporting off the ground can be a challenge, but there are simple steps that you can take to get you started right. Here are the five necessary steps to get good CSR reporting off the ground.

Step 1: Define your reporting goals and CSR program goals

A good first step to successful CSR reporting is defining your reporting goals, and overall CSR goals. It’s important to take some time to determine what you’d like to achieve through your CSR program as a whole, and what you’d specifically like your reporting to accomplish. If you’re already running CSR initiatives, you may have already decided this. But if not, reflect on the  eight behaviours of a responsible leader to help you clarify what your program should be focusing on, and what outcomes you want to produce. While your goals should ultimately be decided by your company’s leaders, they should also consider feedback from your stakeholders.

Different businesses will have different goals for their social responsibility leadership, but reporting goals of all companies should be fairly similar. CSR reporting goals should typically include updating stakeholders on CSR activities through clear and honest communication, using CSR reporting to identify areas for improvement, strengthening your credibility by focusing on both successes and failures, and expanding your stakeholder dialogue by encouraging feedback.

By clarifying reporting goals, your CSR team will have a clear understanding of what your reporting should try to accomplish, and can begin to develop an action plan. Defining what you want your CSR program itself to achieve will help immensely with reporting, as you can then begin to decide how to measure your success.

Step 2: Assigning specific targets and measurement to CSR initiatives

One of the major challenges of reporting is accurately measuring the impacts of your responsible leadership. Being able to measure your success may sound fairly intuitive, but it’s amazing how many businesses don’t assign measurement metrics to their major initiatives. While measurement is necessary, it’s also important to recognize that statistics are fairly meaningless without specific targets and benchmarks. Using recycled paper for 50% of all your printing is great, but how much were you planning on using, and what’s the norm in your industry? Without measurement and targets built into your CSR program, you’re confining yourself to subjective guesswork in identifying how successful you’ve been.

Measurement and goals also help you clearly identify which areas you are performing well in, and which areas need to be improved. And by being able to measure your performance and compare it to your goals, you’re encouraging progress and keeping individuals and teams accountable.

If you’re currently in the process of CSR planning, make sure that you include measurement metrics and goals. If you’re already running CSR initiatives, see how you can develop them further to make them measurable.

Step 3: Decide reporting standards

With numerous guidelines and standards available, selecting your CSR reporting framework can be a daunting task. The most common framework adopted today is the Global Reporting Initiative’s G3 standard, used by an estimated 75% of all CSR reports in 2008. But popularity does not necessarily indicate a good fit for your business and its stakeholders. Every business has unique needs and capabilities, so be sure to use a reporting framework that is aligned with your CSR program and reporting goals, and won’t strain your resources. And while we always encourage leadership in one’s industry, do take the effort to see what guidelines peers and competitors are using.

Some of the most common reporting frameworks used today include:

The next article in this series will look at different reporting guidelines and the selection criteria you should consider in more detail.

Step 4: Understand your stakeholders

Understanding your audience is key to determining two important aspects of your CSR reporting: medium(s) and frequency. Determining medium and frequency is one of the five DO’s of CSR reporting, but is unfortunately often overlooked. While certain guidelines specify or assume a formal written annual report, there are many opportunities to regularly communicate with stakeholders through social media, town halls, newsletters, and other avenues.

The ideal opportunity to determine your stakeholders’ preferences is while initiating your CSR dialogue and identifying CSR opportunities. Whether through focus groups, surveys, interviews, phone calls, or other methods, include a few questions about how often that particular stakeholder group would like to be updated, and through what type of media. If you’ve already completed this initial wave of engagement you can simply re-approach stakeholders at the next opportunity, or wait until you have updates on your progress.

Step 5: Assign roles and responsibilities

Now that you’ve established goals, made your initiatives measurable, decided on your reporting standards, and have taken steps to understand your audience, you’ll want to begin assigning roles and responsibilities. Take some time to determine who will be responsible for running each initiative, and whether that same person will be in charge of measuring performance. Be sure to clarify expectations, timelines, and reporting hierarchies in order to maximize accountability.

In order to keep all information organized and consolidated, you may also want to assign an individual or team to funnel all data to. This individual or team may also want to begin working on design templates and any report content that is not performance related.

While these five steps offer no groundbreaking insight or revolutionary ideas, they do provide a clear and simple process for getting your CSR reporting off the ground. The next article in this series will provide a more detailed look at reporting standards, and what criteria you should consider in determining which fits best with your business.