Corporate Social Responsibility – or CSR – is a business strategy with a growing currency in the US and around the world. CSR argues that organizations have a responsibility to multiple stakeholders in the conduct of their business, and not just to the shareholders. It is about businesses assuming responsibilities that go well beyond the scope of simple commercial relationships.
The World Business Council for Sustainable Development defines CSR as “the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large”.
A growing number of research projects and surveys reveal strong linkages between an organization’s CSR activities and improvements in a company’s traditional performance drivers, such as competitiveness, market positioning, investor relations, recruiting and risk management. There are now scores of investment funds available to people who wish to invest in companies or producers that are socially and environmentally responsible.
Although this definition may be at odds with certain financial expectations of maximizing shareholder value, American companies are becoming much more aware of their responsibilities to the communities and markets in which they operate. And they are vigorously, but not universally, embracing these objectives.
Indeed, corporate annual reports are indicating significant citizenship activities that add value to their stakeholders. PepsiCo, for example, clearly articulates its responsibilities regarding the environment and community affairs. It has established measurement indexes for human, environmental, and talent sustainability that impacts executive decision making. Kellogg’s donates over 20 million dollars of their products each year to fight world hunger. In 2005, Ben & Jerry’s opened a store in Austin, Texas for a community organization that helps at-risk youth and families. The store provides job opportunities for the community’s clients and all profits from the store go directly to the organization. Ben & Jerry’s does not collect a franchise fee.
Regionally, Maine, New Hampshire and Vermont have established state-wide organizations that provide resources, share best practices, and discuss public policy issues related to CSR practices. The Maine Businesses for Social Responsibility (www.mebsr.org) is an organization made up of diverse businesses who believe, in theory and in practice, that companies can be a powerful force for positive change in their communities in which they conduct their operations. Their mission statement is quite clear: “Successful management of the dual bottom line of profitability and social responsibility will be the goal of every business in the state.”
CSR can be defined by many variables. Yet more and more stakeholders are requesting and demanding that companies in their communities and portfolios focus as much attention to their CSR as they do to their financials.
Human Resources shares the lead in advancing and articulating the company’s approach to CSR. In the quest for top notch employees, recruiters at colleges are routinely being asked about their company’s commitment to and examples of CSR. Generation X’ers and Generation Y’ers are aggressive in their desire to work for companies that are socially responsive in addition to their financial and business acumen.
Corporate Social Responsibility will not solve all of society’s ills, but it will go along way to making the world a better place. In corporate terms, CSR makes good business sense. It gives everyone a reason to smile. It is what the future of business is all about.
Here are some suggestions for Human Resources leaders on how to promote corporate social responsibility within their organizations:
1. Define corporate social responsibility for your company or industry.
What works for a bank or furniture manufacturer may be significantly different from a bottling company or a grocery store chain.
2. Conduct extensive and continual research on the concepts of Corporate Social Responsibility.
The World Business Council for Sustainable Development, mentioned above, and the Global Reporting Initiative (www.globalreporting.org) are two excellent research sources.
3. Establish metrics for measuring the impact of the company’s CSR practices.
For example, what percentage of after tax dollars is used to support these activities? How does it compare to other comparable companies? How many labor hours per month or per year are set aside for CSR activities? Quantitative metrics are easier to defend and promote than qualitative metrics.
4. Involve employees in defining and advancing CSR.
Form ad-hoc groups to decide how best to be appropriately socially responsible with the resources available. Give them the authority and responsibility to figure out a way to make it happen. They will do it far faster than some corporate committee.
5. Keep track of all measurable costs.
As much as the company wants to be socially responsible, it also has an obligation to be fiscally accountable to other shareholders;
6. Communicate to everyone – sometimes subtly, sometimes loudly.
Publicize your activities internally to all employees and externally to all other stakeholders as appropriate. Invite civic, religious, and corporate leaders in to show what you are doing and encourage them to join you in their efforts.
7. Establish positive and pro-active relationships with other socially responsible companies.
There is power in numbers and they are always a great source of ideas that might work for your organization.
Ken Moore is an organizational development consultant in Albany, NY. He is an adjunct professor of strategic management at SUNY-Albany and the Union Graduate College in Schenectady, NY. He is a 1971 graduate of Nasson College in Springvale, ME.