Corporate Social Responsibility: What, Why, and How
In recognition of #VolunteersWeek2021 we are exploring Corporate Social Responsibility (CSR) and the key role businesses can play in helping to build a better society.
Make no mistake, a good reputation is synonymous with business success and survival. In a progressively ethically conscious age, organisations are becoming increasingly mindful that their reputation is no longer simply dependent on providing superior products and services but also the demonstration of a commitment to building a better society.
To help fulfil their ethical aspirations and moral obligations, many companies have chosen to actively embrace a Corporate Social Responsibility (CSR) agenda, as part of their broader corporate strategy. Whilst definitions vary, CSR is grounded in the belief that businesses should seek to demonstrate a continual commitment to behaving ethically, improving the quality of life for key stakeholders, and positively contributing to the wider community.
Whilst met with scepticism in some circles (particularly as some believe CSR may detract time and focus away from the achievement of other key strategic objectives) there is compelling evidence to suggest that embracing CSR initiatives is not only good for society but good for business as well. Alongside boosting a company’s brand and reputation, a commitment to CSR has been evidenced to help build better stakeholder relationships, reduce operational costs (predominantly through embracing ‘greener’ working practices), attract new customers, and ultimately increase profit.
In recognition of these benefits (and, of course, our moral and ethical obligation) here are five recommendations to consider when seeking to champion your own CSR agenda.
1) Establish exactly what CSR means to you
Before enthusiastically embracing a CSR agenda, you must first ensure you are able to clearly articulate your own unique CSR vision. There remains a degree of ambiguity surrounding how best to define what exactly constitutes “Corporate social responsibility” and as such, companies should take the opportunity to formulate their own working definition of CSR. Whether an organisation’s CSR motivations are underpinned by an ambition to provide greater value to customers or drive forward a culture of environmental sustainability, a clearly conceptualised vision is a crucial first step in establishing readiness and the capacity to fully commit to CSR initiatives. From here, focus should turn toward the development and implementation of specific processes and activities which will turn this vision into a reality.
2) Know your stakeholders
Stakeholder satisfaction should exist at the core of every CSR initiative. Should key stakeholders be uninterested or uninvested in an organisation’s CSR-related pursuits, they will inevitably fall at the first hurdle. It is pivotal that a business can identify its most important stakeholder relationships and systematically evaluate how its CSR goals and action plans best align with the values and preferences of those most closely affiliated with their organisation. This clarification of values should also include internal stakeholders. Through understanding what is most important to those who work in continued service of the company’s vision, mission, and values, leaders become better positioned to pursue a stakeholder-driven CSR agenda which not only influences satisfaction, loyalty, and motivation, but also positively predicts profit. It’s also worth noting that we live in an age of ever-increasing accountability and as such, stakeholders will expect full transparency when it comes to sharing the impact of proposed CSR initiatives.
3) Create value beyond the financial
CSR initiatives should be deployed with a strong emphasis on value creation. Businesses should take the opportunity to evaluate the value-added impact of their CSR practices through an economic, environmental, and social lens. From an economic perspective, companies cannot underestimate the extent to which a robust CSR agenda can enhance brand image, supercharge internal innovation and ultimately fuel economic growth. From an environmental perspective, organisations should seek to add value through embracing principles of eco-innovation (i.e., the development of products and processes that contribute to sustainable development) whilst also working to identify specific KPIs (e.g., increased uptake of recyclable materials) which will drive forward a culture of environmental sustainability. From a social perspective, organisations may wish to consider specific ethically-oriented practices which benefit the wider community. Whether it be volunteering, fundraising for local charities or the promotion of health- and wellbeing-related initiatives, there are several promising social avenues which can be explored.
4) Anticipate the barriers
Whilst the benefits associated with the adoption of CSR practices are undoubtedly enticing, safeguarding the long-term success of CSR initiatives is not without its challenges. First and foremost, it is essential that those looking to champion a CSR agenda first obtain full buy-in from senior management, who may be reluctant to commit resources to endeavours they believe could detract from the achievement of other key strategic objectives. As well as shareholder reluctance, many CSR initiatives often fail to achieve their intended outcomes due to a lack of strategy, training, and stakeholder understanding. Consequently, the importance of taking time to put together a well-equipped and well-trained team (as well as developing clear and robust CSR legislation) cannot be underestimated. For CSR initiatives to be successful everyone involved in the process must understand what exactly they must do, and more importantly, why they are doing it.
5) Have the right leaders in place
You will be unsurprised to hear that the success of CSR initiatives is heavily reliant on strong and effective leadership. Irrespective of one’s preferred leadership style, effective CSR initiatives must be overseen by those who are able to serve as responsible leaders. The responsible leader is not only able to demonstrate high levels of emotional and relational intelligence (e.g., able to build and maintain effective working relationships with key stakeholders) they are also guided by a strong cognitive moral framework, which allows them to effectively formulate ethical solutions when faced with difficult or morally ambiguous situations. Remember, CSR is an ethically driven pursuit and as such, should be led by those who possess a genuine passion to contribute to a cause larger than themselves.
Based on the above recommendations, how will you seek to drive forward CSR initiatives with your own organisation? Moreover, how can you ensure that CSR principles become interwoven into the fabric of your organisation’s broader mission, vision, and objectives?
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"Creating a strong business and building a better world are not conflicting goals - they are both essential ingredients for long-term success." - Bill Ford