What is CSR and how does it benefit business?
In today's society, Corporate Social Responsibility (CSR) is seen by some as the right thing to do. For others it is a business imperative and they are reaping the rewards!
Corporate Social Responsibility (CSR) describes a company's approach to managing their business processes to maximise their positive impact on stakeholders both within the company and in wider society.
CSR aims to deliver bottom-line benefits and value creation through responsible business practice.
CSR is not cheque book philanthropy plus PR.
At its best, CSR is:
- Aligned with corporate ambition
- Integrated into business processes and embeded in strategy
- A reflection of corporate and employee values
When embedded into corporate strategy, CSR provides a framework for corporate sustainability:
- Building the Reputation - providing goodwill and a licence to operate
- Building the People - helping companies recruit and retain quality staff as well as building the capacity of its collective stakeholders including staff and the community
- Building the Business - providing risk management, cost avoidance, innovation and learning, access to capital and financial performance
A study by PricewaterhouseCoopers, presented in their 2002 Sustainability Survey Report, identified the following top 10 reasons why companies are deciding to be more socially responsible:
- Enhanced reputation
- Competitive advantage
- Cost savings
- Industry trends
- CEO / board commitment
- Customer demand
- SRI demand
- Top-line growth
- Shareholder demand
- Access to capital
Companies that report they are substantially outperforming their peers already grasp the benefits that result from a CSR strategy integrated into the core of their business. A recent IBM study, found that these companies are more than twice as likely to:
Collaborate
- Understand their customers' CSR expectations well
- Have increased the amount of information they provide about the sourcing, composition and impact of their products, services and operations
- Collaborate with consumer and business partners on their CSR initiatives
- Engage their full base of employees in their CSR objectives (ie not the top down)
Integrate
- Place critical importance on, and consider themselves at, CSR supply chain processes
- Consider themselves very effective at developing products and services with a positive societal or environmental impact
- Place critical importance on, and consider them selves very good at, aligning philanthropy with business priorities.
Like most industries, the CSR business has a handful of leaders, a large number of followers and many laggards.
If ignoring CSR is risky, ignoring what makes business sense is a certain route to failure. Sustainability is not an objective as much as a journey - one which may see the business undergo a radical transformation.
For more information on organisations doing work in this sector, refer here to our links page.
For industry views on various aspects of CSR and Sustainability refer here.
MOSS is here to help you on your journey providing education, training, networking and advice to drive sustainability and competitive business success. Members enjoy discount to events and access to the latest thought leadership, access to case studies and reports from around the world.
