Corporate and Social Responsibility: Part II
Tools and Resources for an Effective CSR Program
According to BSR (Business for Social Responsibility), CSR (Corporate & Social Responsibility) is defined as follows: “Corporate Social Responsibility (CSR) is a concept that organizations have an obligation to consider the interests of customers, employees, shareholders, communities, and ecological considerations in all aspects of their operations. This obligation is seen to extend beyond their statutory obligation to comply with legislation and, accordingly, can impact suppliers, contractors and vendors in how they compensate their staff, follow child labor laws and adhere to safety and environmental regulatory policy”.
Moreover, “the concept of CSR is underpinned by the idea that corporations can no longer act as isolated economic entities operating in detachment from broader society. Traditional views about competitiveness, survival and profitability are being swept away… in order for CSR to maximize its potential, it must be deeply committed to their Corporate Responsibility initiatives through pro bono service, community engagement, diversity and environmental sustainability.”
Professionally, I was first introduced to CSR while working as a HR Consultant in Seattle at the height of first tech-boom of the mid-90’s (when the majority of my clients were early stage tech firms); CSR’s main thrust at that time was in the areas of volunteerism, community engagement and the environment. Generally speaking, most CSR programs during this time were part of more expansive HR initiatives around Diversity and Inclusion; organizations would adopt a cause (i.e. keeping a section of a highway clear of litter, reading to the blind, visiting those at a nursing home or sponsoring a Girl Scout Troupe) and employees would be rotated in/out to ensure that everyone participated and that no one group of workers would be left doing the lion’s share of the work.
While CSR’s roots go back to WWII, its prominence grew as a direct result of the Civil Rights Movement of the 60’s. The Civil Rights Act of 1964 ushered in non-discrimination regulations that required organizations to be more civic oriented. Since its initial inception, there have been numerous expansions of this cornerstone piece legislation that have included families with children, veterans, the handicap, as well as local LGBT protections (unfortunately, in spite of gay marriage, it’s still legal in many states to fire someone for being gay, or even for being perceived as gay, however). In fact, since the Civil Rights Act was signed into law, CSR initiatives have been given much of the credit for helping to feed, clothe and educate children in Appalachia in the 60’s to the cleaning up of our rivers and streams in the 70’s to LGBT rights in the 1990’s, as well as the ever growing “green movement”.
On global level, however, organizations (particularly in the private sector) have fought hard against other CSR initiatives that many see as vitally important for our environment, our welfare as a nation and global warming; these types of initiatives tend to focus on worker safety, competitive pay practices, child-care, family leave and regulations designed to slow the effects of global warming. In these areas, its government bodies that have been trying to increase awareness, acceptance and change; therefore, in essence, private sector CSR initiatives tend to be local – including volunteerism – while the larger global interests tend to be the domain for governments to tackle.
On the other hand, there’s uniform agreement as to what drivers are pushing businesses towards CSR and they include:
- The shrinking role of government: Generally speaking, governments have relied on legislation and regulation to deliver social and environmental objectives in the business sector.
- Demands for greater disclosure: There is a growing demand for corporate disclosure and involvement whether it be from stakeholders, customers, suppliers, employees, communities, investors, or activist organizations.
- Increased customer interest: There’s empirical evidence that the ethical conduct of companies exerts a growing influence on the purchasing decisions of customers. What customer doesn’t want their merchant to foster (and adhere to) recycling and sustainability initiatives?
- Growing investor pressure: Investors are changing the way they assess companies’ performance, and are making decisions based on criteria that includes ethical concerns.
- Interesting Footnote: The Social Investment Forum reports that “in the US in 2009, there was more than $3+ trillion worth of assets invested in portfolios that used screens linked to the environment and social responsibility”.
- Competitive labor markets: Employees are increasingly looking beyond paychecks and benefits, and seeking out employers whose philosophies and operating practices match their own principles; thus, in order to hire and retain the best workers, companies are being forced to improve working conditions.
- Those highly sought after skilled workers that companies covet, more often than not, are searching out employers with progressive social practices such as LGBT benefits, the environment, child-care and parental leave. Thus, for businesses striving to be competitive, weaving these CSR principles into their corporate culture provides them a much needed competitive edge when attracting and hiring top talent.
- Supplier relations: As stakeholders are becoming increasingly interested in business affairs, many companies are taking steps to ensure that their partners conduct themselves in a socially responsible manner. In recent years, many have introduced codes of conduct for their suppliers, to ensure that other companies’ policies or practices do not tarnish their reputation.
- Community relations and civic support: As customers become more selective in knowing which companies are making an investment in their community (and which are not), most organizations have come to recognize they’re accountable; they must “walk-the-talk”. In fact, some have taken this a step further by drafting specific company protocols for corporate gift giving.
- It’s not uncommon for corporate committees to research their respective communities greatest needs, enact due-diligence methods for vetting each organization needing funds, and administering oversight in how those funds are dispensed while, at the same time, ensuring that good will is fostered within the local community as a direct result from the infusion of either time/volunteerism and/or from cash gift giving.
The value of CSR can be seen in the bottom line; some of the positive outcomes that can arise when businesses adopt policies of social responsibility include:
- Improved financial performance;
- Lower operating costs;
- Enhanced brand image and reputation;
- Increased sales and enhanced customer loyalty;
- Greater productivity and quality;
- More ability to attract and retain top talent;
- Reduced regulatory oversight;
- Greater workforce diversity;
- Product safety and decreased liability;
- Charitable contributions increase;
- Employee volunteer programs grow;
- Corporate involvement in community education, employment and homelessness programs increase considerably;
- Product safety and quality;
- Greater raw material recyclability and accountability;
- Better product durability and functionality;
- Greater use of renewable resources;
- Integration of environmental management tools into business plans such as environmental management standards, and eco-labelling;
- 45 of 59 companies surveyed report that their employee satisfaction scores went up as a direct result of their CSR efforts and the goodwill generated from it.
Accordingly, the concept of CSR has now been firmly rooted within the global business agenda. But, in order to move from theory and discussion to concrete action, obstacles need to be overcome such as in the areas of transparency and dialogue that can help make a business appear more trustworthy, promote integrity and push up the standards of other organizations at the same time.
Locally, there are dozens of non-profits in the Chicago area that could benefits from your organization’s efforts to improve, enrich and enhance the lives of those within your community whether it be through pro-bono work, community engagement, volunteering or simply by writing a check. Although, the most important criteria for choosing the right non-profit to pursue is to select one that further fosters the values of the organization, whether it be your company’s guiding principles or enhancing your Diversity program, the non-profit(s) you select will say something about you and represent your business. Conversely, if you’re an individual looking to volunteer, it’s recommended that you find one that ignites your passion(s) whether that be gun control or the environment
Personally, having lived in many different parts of the country, I’ve found that volunteering my time – either through pro-bono consulting or by simply volunteering my time for a fundraiser – is not only a great way to meet like-minded people, it also helps to fill an innate need to give back. I was fortunate enough to have a great education; therefore, being able to pay-it-forward is incredibly rewarding and a great way to meet people.
Thus, since relocating back to my hometown of Chicago, I’ve worked on several pro-bono assignments (including the development of a new performance appraisal template and review process for the Museum of Science & Industry) in search of one 501(C)3 in which to share both my time and talent. And, it was during one of those pro-bono assignments that I came across an extraordinarily progressive and inclusive organization that, coincidentally, tapped into two deep passions of mine: my love of theatre, as well as my experience in working with the disabled, and that was Tellin Tales Theatre. Not only have I found great people to work with, but their mission is to provide access and enrichment to the lives of those with physical or cognitive disabilities; thus, I’m ideally suited to this organizations mission and vision (FYI – Tellin Tales is always looking for volunteers and/or for donations and links to both can be found on their website).
For a list of other local non-profits that might ignite your interest and passions, don’t hesitate to check out: Great NonProfits of Chicago
On the other hand, if you’re a non-profit hamstrung by things such as accounting/finance, board development, branding/marketing or even human resources issues and you cannot afford to retain a Consultant, there are two local non-profit organizations that I’ve volunteered my time and talent for that “might” be able to help out:
For those organizations interested in incorporating the value of CSR into their corporate culture, I’ve listed some examples I’ve helped businesses develop over the years:
- Our clients/customers want to work with us because we are focused on a healthier and more productive world;
- Our clients/customers can rely on us to develop their projects to the highest standards of energy efficiency and occupant health, while creating an architecturally resonant project that reflects our mission and vision;
- We save money by operating more efficiently which is a direct benefit of our CSR efforts;
- We only retain suppliers and contractors that have a CSR program and we ensure that those suppliers and contractors utilize vendors that have employee safety programs, pay a competitive wage and strive to continually adopt “green” goals for their suppliers;
- The true value we receive from our ongoing initiatives is that of social good will – we believe that setting a good example is the greatest benefit in that we inspire other organizations, companies and individuals to ‘up their game’ when it comes to social and environmental responsibility, which in turn encourages further inspiration in the community leading to a more enlightened perspective on how to run ones business or lead one’s life.”
A key challenge facing business is the need for more reliable indicators of progress in the field of CSR, along with the dissemination of CSR strategies. Transparency and dialogue can help to make a business appear more trustworthy, and push up the standards of other organizations at the same time.
For additional information on Corporate and Social Responsibility, I encourage you to check out the following:
- Businesses for Social Responsibility
- Business News Daily
- Corporate Philanthropy
- The Truth About CSR, Harvard Business Journal
For methods and recommendations for enhancing both your CSR and/or your Diversity initiatives, please contact Mike or simply check out the links below.
Part one of this series: The Development of Workplace Ethics & Business for Social Responsibility
Mike Russell is a seasoned professional with three decades of experience in the fields of HR and OD. In addition to having a career trajectory of HR Generalist to a VP within ten years, Mike also has a long and successful background as a Consultant/Business Partner to CEO’s, Presidents and Executive Directors in both the private and non-profit communities across a wide spectrum of industries.
As the sole-proprietor and owner of Organizational Development Solutions (ODS), Mike partners with business leaders committed to insulating their organization(s) from potential liability, increasing organizational effectiveness and adding shareholder value.