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Corporate Social Responsibility - an important tool for most businesses
- What is corporate social responsibility (CSR)?
In its simplest terms many equate CSR with being a good corporate citizen by supporting worthwhile community causes.
There are several more formal definitions - here are two:
“CSR is achieving commercial success in ways that honour ethical values and respect for communities, and the natural environment”, Business for Social Responsibility.
“CSR is a concept whereby companies integrate social and environmental concerns in their business operations and in their interactions with their stakeholders on a voluntary basis”, European Union.
- How did CSR evolve?
In its earliest days CSR was often seen as simply reacting to criticism of corporate behaviour (i.e. Nike’s issues re sweatshops and Exxon’s problems re oil spillage from Exxon Valdez) by attempting to ‘do good’.
As a result, critics accused some companies of using CSR in an opportunistic manner in order to ‘buy’ goodwill. Many early CSR initiatives were also environmentally focussed.
In the late 90’s activist groups such as Greenpeace and Amnesty emerged. They focussed on specific causes, were well organised and knew how to galvanise media and public opinion across international borders.
Business felt it had to respond as reputations - and sales - were being impacted. Corporate codes of conduct were developed, and CSR became a formal ‘must do’ core business principle instead of a ‘would like to do’ or ‘maybe we have to do’ activity.
As a result today, CSR is a major corporate discipline, with its own body of knowledge. For larger organisations - especially multi-nationals - it is no longer optional; it is linked to core business objectives.
- How does CSR ‘fit’ with PR?
In its earliest days CSR was essentially a PR initiative, because it was PR that often played a key role in defending questionable corporate practices. Also, it was PR -in the absence of any other advocate - that often made the recommendation as to proactive steps corporates should be taking to avoid future risks or being seen to be ‘doing the right thing’.
But PR often found itself condemned because in these early days it was seen as helping corporates to communicate that they were ‘doing the right thing’ - and this was often perceived as ‘buying goodwill’. It was a classic case of shooting the messenger (although in retrospect some of the communication was rather ‘over the top’ and somewhat self congratulatory).
Today, much CSR strategy is developed and driven by specialists who integrate it into the business. And in its purest sense it has evolved to encompass environmental and social impacts, workplace practices and corporate governance.
This is clearly beyond the PR function. However PR continues to have a role in the communication of the chosen CSR initiatives to various stakeholders.
It’s currently more fashionable to appear to be reticent and circumspect about CSR initiatives so as to avoid being labelled as ‘trumpeting’ the good work being done. But at the end of the day an organisation that embraces CSR still needs its stakeholders to be aware of its stance and activities - so communication (albeit more subtle) is still a key ingredient.
- What are some of the reasons for a business being more socially responsible?
taking a leadership position through CSR can help differentiate the business and give a competitive advantage
community involvement can help bring more unity to a business, win the support of staff and help foster a better corporate culture
adopting a CSR-driven philosophy can lead to efficiencies in energy and materials use and often lower costs
Government and key stakeholders can often view more sympathetically a company that incorporates CSR into its everyday business
evidence of a company that abides by CSR principles can help attract employees
- What is the evidence that CSR is being more widely adopted?
At a philosophical level, evidence of CSR becoming a core business function is to be seen by:
the emergence of ‘triple bottom line’ and ‘sustainability’ reporting
companies are increasingly adopting codes of conduct
the appointment of key management with specific responsibilities for CSR (in the US some are even called Chief Ethics Officers)
Corporates are now more willing to openly engage with what were once regarded as aggressive lobby and activist groups.
There has been the rapid development of a number of bodies and institutions that are becoming thought leaders in CSR eg:
Any major multi-national company has to be seen as embracing CSR - go to their website or read their Annual Reports and it will be self-evident.
- What attempts are there to measure and quantify CSR in Australia
This is an area of considerable debate, with several individuals and organisations jockeying to come up with the definitive measurement tools. Internationally Dow Jones runs a rating system and in Australia The Sydney Morning Herald and The Age began publishing a ‘Good Reputation Index’ that ranked local companies.
However this ceased when many questioned the methodology. One system rates major companies across Australia and New Zealand (mainly those listed on local Stock Exchanges or multi-nationals) and charges $25,000 to companies that want access to the detailed data on them and their competitors. There are no figures on how many companies buy this information.
- What are some examples of ‘on-the-ground’ CSR initiatives in Australia?
NestlâˆšÂ© is an example of a multi-national that tailors its CSR program specifically to Australia where it runs the ‘NestlâˆšÂ© Good Life Program’ that covers more than a dozen activities. These include a senior primary school education program called NestlâˆšÂ© Write Around Australia which attracts participation from 55,000 students annually, ‘Giant Steps’ where NestlâˆšÂ© is principal sponsor of a program to support children with autism, a community environment program where each of the company’s 14 factories and distribution centres undertakes annual community projects with a specific focus on improving the local environment, and a programme that sees the company provide food to Foodbank Australia, a network of non-profit agencies. The company does not disclose its annual budget for CSR.
Local Australian energy company AGL has its ‘Energy For Life’ community investment program which involves it paying the winter energy bills for most homeless shelters in NSW, Victoria and South Australia and working with WorkVentures to pilot ways in which disadvantaged communities and homeless shelters can reduce their energy costs. AGL also has a program to empower and reward employees who work in the community. Employees have selected 10 social causes they want to support and AGL matches any contributions they make through the payroll as well as giving employees time off to work in the community.
Vodafone recently (2004) launched an initiative to make a difference to young people who are homeless and the organisations that support them. The program, called ‘Young People Connected’ offers a number of phone-related solutions including supplying a mobile phone with a pre-paid SIM card to enable young people to keep in touch with case workers, employment contacts and family members.
Meriton, best known for its high-rise apartments in Sydney, has committed to funding a $300,000 three year research program into prostate cancer at the Sydney Cancer Centre. Meriton reportedly chose to focus on prostate cancer because it saw itself as part of a male dominated industry and decided trying to find out more about this major disease was a way for it to make an investment in the future health of its stakeholders. Meriton is just one of many corporates that works with the Sydney Cancer Foundation to seek support from the corporate sector.
8. How should CSR be applied for the average company?
CSR is clearly a ‘must do’ for Australia’s top 100+ companies - it’s becoming a key ingredient in how the investment market rates an organisation. For these companies it must be comprehensive, and ideally it should embrace the principles of triple bottom-line reporting and embrace areas such as corporate governance.
However below the top tier there’s no compulsion - it’s simply a ‘should do’ or ‘would like to do’ option. And, initially at least, most at this level can achieve a great deal without turning the organisation upside down.
Here are some first - and basic - principles to follow/questions to ask:
Are there aspects about the way that we operate that are not socially responsible and in keeping with modern practices that we need to review and, if necessary, address? For example:
Should we be involved in ‘giving’ or ‘putting something back’ into the communities in which we operate? This can include:
Should we support a particular charity or not-for-profit organisation that we believe makes a significant contribution to the community?
Should we allow (or encourage) our staff - from top management to the factory floor - to contribute time to the community in a structured and planned manner?
Can we identify a philanthropic organisation with whom we might partner to our mutual benefit?
If we are engaged in activities that we believe show that we are corporately responsible, are we communicating these adequately - and sensitively - to our key stakeholders?
Corporate social responsibility is as much an attitude of mind as anything else. It is all about ‘being seen to do the right thing’ or being seen to ‘be putting something back into the community’.
Any effort to improve the reputation of an organisation should include a CSR component. While a host of specialists may lay claim to having particular expertise in devising CSR initiatives, the litmus test is whether the actions taken under a CSR umbrella are received well by stakeholders. Helping to communicate to stakeholders and monitoring their reaction is very much a PR responsibility - and for many medium-sized organisations who simply want to be seen to be doing more, especially with external stakeholders, their PR advisors should still be the first to turn to for advice and suggestions.
Note: The author of this article is a senior Sydney-based independent corporate PR consultant who coaches and mentors PR Managers to get the best out of their PR Department and to help review or select a PR agency. In addition he also provides corporate PR and communication advice where there are issues or changes that might impact on corporate reputation. He also blogs on a range of PR and communication topics.
For a more recent perspective on CSR you may care to view a Blog published in March 2010:
PR and CSR: Latest US Awards Show They Remain Uneasy Bedfellows