A Major Shift in Corporate Thinking on CSR?

Corporate social responsibility (CSR) is becoming increasingly relevant as companies realise that there is merit in business models that incorporate environmental and social accountability. Through innovation and entrepreneurship, companies can find new markets, win loyal customers and employees, and sharpen their competitive edge.

The Australian Centre for Corporate Social Responsibility recently released The Innovation Challenge: the state of CSR in Australia, Annual Review 2011/2012. This report presents the results of a survey of CSR professionals on the drivers, challenges, priorities and outcomes of their CSR efforts. This article highlights some key findings and applies the lessons to the supply chain.

An Opportunity for Innovation

The driving factors for developing a CSR strategy according to the report are to strengthen the brand, meet community expectations, complying with international standards, employee retention and risk reduction. Innovation was noted as an outcome in the form of new products and services, but it did not rank high as a driver for pursuing CSR. This appears to be a missed opportunity for many organisations to place strategic focus on the benefits of innovation.

Case Studies: Fujitsu and Landcom

Fujitsu and Landcom are two companies in Australia who have proven that CSR and innovation do have a synergistic relationship. Fujitsu views itself as a corporate citizen and they have developed a Green ICT Framework that guarantees that its operations work at maximum efficiency whilst reducing their environmental impact. Following the introduction of this agenda, Fujitsu’s datacentre in Sydney uses 32% less than comparable facilities. The Green ITC framework has since been adapted by other companies throughout the world including Toyota.

Another great case study comes from Landcom, a New South Wales land developer. Landcom developed a tool called PRECINX which helps them determine the sustainability of a region for development purposes. The tool takes a variety of environmental conditions into account and can be used during the planning phases of development to help prevent environmental degradation.

Challenges to Proving the Business Case

One of the key obstacles identified to implementing a successful CSR program was the difficulty in being able to measure CSR results. This problem similarly arises when trying to prove the business case for CSR. The report suggests that sustainability reporting is a good way to measure CSR outcomes. International frameworks such as the Global Reporting Initiative can provide guidance on selecting measures that are material and relevant. Other major obstacles noted were time constraints, lack of financial resources and lack of organisational buy-in.

Challenging vs. Rewarding

When asked to describe working in CSR, the most common words used by respondents were ‘challenging’ and ‘rewarding’. Those who are just starting out in developing a CSR strategy will no doubt face many roadblocks and scepticism from colleagues and other staff members. The ACCSR offers a number of suggestions to addressing these obstacles. First of all, it helps to view CSR development as a long-term process, and a lack of immediate results should not stop your efforts. Setting measurable goals for projects and communicating successes supports continued progress. Finding a champion or mentor on the executive team that shares your vision can help ease the burdens of proving a business case. You might consider establishing a rotation system to include staff in your sustainability planning process for short periods of time so they can get a better understanding of where the company stands and what needs to be done. Colleagues will probably be your best asset, so make reaching out to them a priority. 

Engage Stakeholders for Success

The survey additionally asked respondents to self-assess on their organisation’s stakeholder management capabilities. While the capability of stakeholder engagement was ranked highest, the average rating of all capabilities remained mostly stable from year to year. This highlights a key area for focus of developing organisational capability in stakeholder management. Companies with the highest capability scores were found to experience the fewest obstacles to CSR success and saw the greatest outcomes from their efforts. This suggests greater benefits from promoting an organisational culture of social responsibility and cultivating partnerships with social sector organisations and other stakeholders.

Supply Chain Lessons

At ECO-Buy, we often find that CSR strategies are very closely linked to supply chain strategies. Approaching supply chain sustainability initiatives with an eye for innovation can result in the greatest cost and risk reductions and strengthened supplier relations. Proving the business case for sustainable procurement relies on measurement of outcomes, which can focus on environmental impact reduction, social benefits and staff and customer approval. Implementing a sustainable procurement program can be highly challenging, but through supplier engagement and organisational communication and commitment you will also find great rewards.

Article provided by Alison Brown, ECO-Buy Intern, and Sara Redmond-Neal, Business Program Manager.