C.S.R. For Beginners
C.S.R. is a massive topic. This post will give you a basic introduction to the key elements of CSR, its benefits for companies, and why it is becoming a necessity for corporate survival in the 21st Century.
At Butterflies & Hurricanes we are not, by any means, experts in CSR. We are beginners ourselves and have only recently begun the process, but have already learned a lot and seen numerous positive effects. Below is what we felt we needed to understand to start the process, and since the most important thing is to start, we thought we would share. We will give updates as we go.
WHAT IS CSR?
C.S.R. stands for Corporate Social Responsibility. At its most basic CSR is
Self-regulation: CSR is a form of corporate self-regulation integrated into a (sustainable) business model.
A process of self-assessment and evaluation: the process of an organization assessing its impact on society and the environment, evaluating their responsibilities.
A company’s own detailed application of sustainability.
A process for activating Higher Purpose in a business.
When a company begins its self-assessment process it studies five areas independently:
1. Business Health 2. Workers 3. Clients 4. Society 5. Environment
Now, before we briefly describe how it is done, let’s look at the big question:
The benefits of developing your own CSR program are many. If done correctly, CSR does not have to be a drain on resources, in fact it can be the opposite. If it is carefully implemented, CSR policies can help your organization:
Save money on energy and operating costs, the saved money can then be put back into the company
Manage risk, because you will have more carefully and deeply assessed risks and benefits
Win new business
Increase customer retention
Develop enhanced relationships with customers, suppliers and network
Attract, retain and maintain a happy workforce and become an Employer of Choice (people like to work for responsible companies that do no harm
Differentiate yourself from your competitors
Enable innovation and learning which will widen and enhance your influence
Improve your business reputation and standing
Provide access to new investment and funding opportunities
Generate positive publicity and media opportunities due to media interest in ethical business activities
Consume less and do less harm to the environment
Achieve a greater sense of meaning and purpose in your work
And perhaps more importantly, having a CSR program is increasingly becoming necessary because
CSR requires a company to evaluate its entire supply chain, which means companies will favour choosing suppliers who also have CSR programs.
1. Raw materials producers
2. Transport companies
3. Product and supplies producers
4. All Contractors and their business
5. All Consultants and their business
6. All Buildings, including utilities, cleaning and maintenance
Those suppliers and contractors with verifiable CSR programs become first choice companies and preferred partners for CSR companies hiring them.
CSR expands the traditional concept of shareholders who own monetary shares in the company, to stakeholders, who are all the people affected by what the company does, either positively or negatively. For example traditional shareholders are “stakeholders” financially, and sustainability requires that they are considered, but considered equally with all other stakeholders. For example, people who live in the area of a factory who have nothing to do with the company other than living nearby are also stakeholders because what the factory does affects their lives and health.*
CSR is not about how a company spends its profits, but how it makes its profits. Making profits in a way that harms people or the environment, and then using some of those profits to try to repair or compensate for damage, though still a good thing, is not CSR. Making profits in a way that does no harm in the first place is what CSR is truly about.
CSR is a living adaptable system, that a company must “grow” from basic principles, it does not have to be started as a complex and complete program that is very expensive and time consuming. It can be started in a limited way that actually saves the company money, such as by installing energy efficient light bulbs, appliances or energy saving controls, such as thermostats, that pay for themselves out of savings, which can be used to implement some of the more costly CSR elements. Yes, some parts of a complete program may be expensive, but what is being shown is that by created shared value for people, communities and the environment, the company itself also shares in that value and the overall value of the company goes up over time. The important thing is to start, and usually this is most easily done with the money-saving elements first.
*The additional consideration of stakeholders requires a new accounting system. Triple Bottom Line accounting (TBL or 3BL) was developed to include stakeholder value. It is an accounting system that measures the costs and benefits for shareholders and stakeholders, such as the cost of healthcare for people adversely affected by a company’s actions,, or the costs of correcting environmental damage, as well as the value added to a brand due to its deeper brand relationship, eco-friendliness, and other advantages being discovered by sustainable companies.
HOW TO START?
1. Begin with people: Starting a C.S.R. program begins with people, your people. The very first step is to get your people involved in the process and listen to them. Their involvement, their ownership of the process, and results, are essential for its implementation and success.
2. Identify your company’s shared values: There are many methods and tools available for this. One is Jenny Andersson’s Activating Purpose to Create next Stage Organizations & Leaders. Another good tool is The Map of Meaning, from Holistic.
3. Question yourself and answer honestly: Once you are clear on your values as a company ask, “What are the changes you are able and willing to make. For each of the five areas — Business Health, Workers, Clients, Society, Environment — adapt the lists in the book The Responsible Company, What We’ve Learned From Patagonia’s First 40 Years, or lists from B Impact Assessment, or any other reliable source, to fit your company. Narrow these lists down to what you are capable of and willing to do. This process may take a number of weeks or months. And remember, you do not have to stat with everything. It only works if you start small enough for it to work without being a burden.
4.Refine prioritize and prioritize the lists — this often means starting the elements that save a company money first.
5. Fit the right people to the task: Find people to be in charge of each step, you may be surprised how many will volunteer. Forcing anyone do take on a job usually defeats the purpose.
6. Start: Just start. Even if you have to narrow your list down to only five things, one for each area, you will likely be surprised at how it brings people together and gets the ball rolling.
Much of this post was adapted from the short book, The Responsible Company, What We’ve Learned From Patagonia’s First 40 Years, by Yvon Chouinard, founder and owner of Patagonia, and Vincent Stanley, co-editor of The Footprint Chronicles. It is available in the Czech Republic.
Coca-Cola Learns a Tough Lesson on Corporate Sustainability.