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It has long been supposed by many observers that companies have adopted a corporate social responsibility (CSR) policy merely because it will make them look good, particularly in the media. In the absence of specific legislation requiring it, goes the usual criticism, voluntary CSR is simply practised as a form of public relations.

If that is true, then the CSR industry will almost certainly die out within the next five years as more and more business leaders realise what a failure it is. This is the case because companies practising CSR are generally achieving little or nothing in terms of their PR profile. To make matters worse, they are also failing to achieve many – if any – of the potential benefits in other areas too: staff loyalty and turnover rates, investor confidence, public affairs and so on. And since this is so, company profits are not being enhanced through any appreciable return on CSR investment. Therefore, CSR investment, in the absence of new incentives such as legislation, will soon be jettisoned as would any other wasteful expenditure in a sensibly-run business.

Yet, practised in a more strategically informed, multi-disciplinary manner, CSR could not only achieve significant improvements in many ethical areas – from human rights through climate change mitigation to poverty alleviation – it could also add considerably to the financial success of companies. Yet, in the forms in which it is currently emerging, CSR is usually, at best, a waste of money, at worst a threat to profitability and shareholder value.

Let us take a look at some of the evidence for this assertion. Far and away the most popular response to the CSR agenda has been the annual social or environmental report. Very substantial budgets are deployed each year on glossy publications giving details of companies’ credentials in these areas. An entire industry has grown up around this practice, involving benchmarking, data gathering, assurance, stakeholder engagement, training, design, copy writing, photography, reprographics, printing, distribution…It’s a veritable goldmine for the suppliers, but the clients – the reporting companies – are increasingly noticing that there are generally only three groups reading their very costly reports:

• their competitors
• the competitors of their CSR and communications consultancies
• angry critics of the reporting companies – or of capitalism as a whole

So why are these thoroughly researched, beautifully designed and professionally written reports not being read? Simple answer: because, to almost everyone else, they are tedious. Even among the three groups mentioned above, who are most likely to study these reports, it is increasingly evident that readership is astonishingly low. This shows that each reader is costing thousands of pounds to the company footing the bill – and, worse still, those few readers are of no value whatever to the companies in question; indeed, they are often using the reports as ammunition for various forms of future attack upon the companies in question.

So the return on investment in this, the predominant form of CSR activity, is dismally low. And the digital form of reporting fares little better. Online reports can claim some environmental and financial credibility: there is a significant reduction in physical materials consumed and it is thus cheaper and more eco-friendly than the hard-copy equivalent. However, there are challenges here too: for instance the ‘digital divide’ means that some 90%-plus of the world’s population, many of them among the worst-hit by the more regrettable consequences of a company’s activities, cannot gain access to online information – if you live in an African village where the telephone has not yet been heard of, Internet access is unlikely to be a daily reality. This has led to accusations of élitism, or even deliberate exclusion of those with the most valid claims against the reporting company. Furthermore – and paradoxically – the egalitarian nature of digital media for those who do enjoy access to the Internet (it is a very affordable medium in which individuals and relatively impoverished activist groups can quickly and cheaply become as visible as multinational corporations) means that a Google search generally reveals many more critics than supporters.

Naturally, the next questions that spring to mind are: “If this is the case, then should we throw CSR out? If not, then how do we make it work? If it becomes a legal requirement, how do we make it pay for itself? And if it doesn’t become a legal requirement, how might we make it profitable?” I would suggest that a carefully framed strategy aimed at maximising dialogue in place of monologue – asking and listening as much as telling – and integrating internal with external communications is most likely to succeed in combining ethical with economic improvements.

A comparison of two case studies may help explain this approach:

CSR as a major potential threat to profits
A fast-moving consumer goods company commissioned a research programme in which we assessed the views and understanding of the Board members on three questions:

• What does CSR mean to our company?
• What is our current position on CSR?
• Where should we be headed in CSR terms?

Almost every Board member, while stating that CSR is extremely important to their sector (the company manufactures and sells alcoholic beverages, thus the social responsibility issues for them are huge) added that, in their opinion, little if anything was happening in this field within the organization.

While interviewing the leaders, numerous names of individual CSR champions at lower levels in the company’s hierarchy were mentioned. We decided to interview these people too. What emerged was that, in the many countries where the company operates, spontaneous eruptions of philanthropy were taking place all the time. Usually these initiatives took the form of staff fundraising campaigns and charity support projects such as sponsored half-marathons or second-hand children’s clothing or used book sales. It had become customary that in most cases, enthusiastic organisers asked local or regional directors if the company would match funds raised by the voluntary efforts of the staff. In nearly every case this was agreed and many local charities and other worthwhile causes became the happy beneficiaries of these proactive people’s energy and good will.

Then came the shocking discovery. When we analyzed this global network of extremely well-meant but unconnected fundraising events, a series of very alarming facts emerged:

• The total annual cost to the company ran to several millions of pounds
• The company’s global-level leaders had no idea it was happening
• Few, if any, of the potential benefits of a multi-million-pound CSR programme were being realized
• More than half of the charities being supported were children-focused
• There was a major media campaign being waged at the time, in which the alcohol industry was being castigated for its heavy focus on ‘alco-pops’, a range which was accused of attempting to attract children towards underage drinking

So, not only was the company (unwittingly) spending millions on a CSR programme, in the absence of any leadership-level strategic CSR intelligence, internal communication or media relations management it was achieving very little return on its investment. Worst of all, however, was the horrifying fact that a perfectly well-intentioned and widespread phenomenon had the potential, if picked up by the wrong kind of investigative journalist or activist group, to inflict massive damage on the company’s reputation, profitability and shareholder value. We could see the tabloid headlines: “Ruthless alco-pop peddlers target vulnerable kids”, “children’s homelessness charity as front for booze barons”.

The CEO, in a cold sweat, proposed the election of a Board-level CSR leader and the development of a global CSR strategy. The vote was passed unanimously.

CSR as a powerful profit-booster
A major construction industry client wanted to create a powerful ‘differentiating factor’, particularly in highly competitive bids for substantial public sector projects. The company’s leaders accepted that there was a strong case for a strategy combining internal with external communications and replacing monologue with dialogue. We brought together not only staff from all levels and many departments but also suppliers, community members, NGOs and others in a series of workshops designed to raise awareness of core CSR issues. We not only trained these people but listened carefully and reacted to their responses, their criticisms, doubts, enthusiasms, ideas and suggestions.

It began to emerge that, by combining principles and processes with the participants’ understanding of their own industries, issues, preferences and pre-occupations, we were able to find a win/win outcome for almost any challenge, where profits and ethics enhanced each other at almost every turn.

The result was that the company not only completed the project (on which we practised our newfound win/win innovations) ahead of schedule, we also enjoyed other benefits, including:

• Enhanced supplier loyalty and understanding of CSR
• Greater staff loyalty, enthusiasm and pride in their work
• Significant improvements in ‘innovation thinking’
• Exceptionally positive media exposure
• Numerous highly-acclaimed CSR-related awards
• A multi-billion increase in public sector contracts in the following year

We never did find out how much of the company’s increased order book we could take credit for with the CSR programme but, given the multi-billion level of the boost in business, the Chairman exclaimed at one awards ceremony that anything over 0.01% represented a superb return on his investment!

Conclusion
So, I predict that very soon we will be seeing the death of CSR (Corporate Social Responsibility) in its present form and from its ashes will rise a new, highly profitable and therefore long-lived answer to the question “How can we do the right thing and meet our shareholders’ financial expectations?”: CSR: the Comprehensive Strategic Response or CSR 2.0.
Watch this space…

© Robert Weston 2007

The author, Robert Weston lives with in Bath, England. He has been a CSR consultant, writer, speaker and facilitator for fifteen years. He holds degrees in Philosophy and in Responsibility and Business Practice; he has also co-launched the UK farmers’ markets movement, Bath’s first eco-hotel and five children. His clients include a wide range of high-profile corporations, along with numerous NGOs, government departments, national governments and supragovernmental organisations.
You can e-mail him at: robert@organismics.org or call him on +44 7074 661166
You can write to him at the following address:
Bloomfield House,
146, Bloomfield Road,
Bath. BA2 2AS, UK

“Green IT is not a company initiative; it’s not a campaign of ours. It is a reason to put out a new press release.”

The quote above came from an acquaintance of mine when I pushed him for details about his company’s “Green IT” information it had just prominently splashed across its homepage. (Green IT = using information technology to increase efficiency and sustainability) I pushed for details because I knew the company pretty well (a mid-sized international software company), and I knew they didn’t even have any internal sustainability or efficiency initiatives or even a CSR report, so I was curious.

The answer confirmed my suspicions that this was all so much marketing-driven who-ha. Clearly, the marketing department had read the latest Gartner and Forrester reports touting Green IT and decided to jump on the bandwagon.

None of this is to say that there aren’t real benefits conferred by Green IT. In offices, the datacenter is the biggest energy user, so increasing efficiency there can result in significant bottom line savings. Also, governments are increasingly looking for technological solutions to address climate change and carbon accounting.

But this company listed the benefits of its particular Green IT as “using less paper” and “reducing waste” among others. Really cutting edge stuff for a company that touts itself as a software leader, wouldn’t you say?

What effect has this green marketing push by vendors had on CIOs? According to Don Tennant at Computerworld, it is turning them sour on the notion of energy efficiency practices:

“It’s as if green has become the poison ivy of the corporate IT agenda. And vendors are hardly providing any calamine. Instead, they’re spreading the irritation in the form of green marketing hype, falling over themselves to be perceived as enablers of a green data center.”

For the sake of the CSR and sustainability agenda, this has to stop. One way would be for analyst organizations like Gartner and Forrester to rank the Green IT products out on the market and expose those that are just so much marketing-speak.

Another would be for CIOs to ask all potential vendors to answer questions on their Green IT credentials, similar to the brief survey available on Computerworld, as part of the bidding process. Even if a company ultimately didn’t base its purchasing decisions on a Green IT screen, it would force the industry to take their own claims seriously.

And we could use a bit more seriousness when it comes to green marketing claims.

About the author: Quinn McKew is an environmental entrepreneur and policy consultant with expertise in climate change, public lands, water and energy policy. With her MBA and experience in non-profit management, she seeks to leverage the best practices of the non-profit and business communities to foster a truly sustainable business culture.

I just wanted to share an interesting news item I came across this week. The following is taken from the news story on Business Green this week. I have only taken out the bits that I thought where spin.
“BT unveiled a new economic model for measuring a firm’s “carbon intensity”, which the telecoms giant claims will make it easier for companies to set effective carbon reduction targets.
BT announced fresh plans to cut its own global carbon emissions by 80 per cent by 2020, the new model aims to link a company’s carbon emissions with its financial performance, allowing executives to better account for the likely impact of corporate expansion on their carbon footprint.
The Climate Stabilisation Intensity (CSI) model links data on a firm’s carbon emissions and EBITDA (earnings before interest, taxes, depreciation and amortisation), to global emission reduction goals recommended by the UN, to work out an appropriate emission reduction target for the firm.
In the past, some companies have been criticised by environmentalists for adopting carbon intensity targets for reducing carbon emissions in relation to sales that would theoretically allow them to increase emissions as long as sales increased at a faster rate. However, a spokeswoman for BT said the aim of the new CSI model was to instead develop an understanding of a firm’s carbon intensity that would allow executives to set more appropriate absolute emission reduction targets.
“Currently, if you grow organically or acquire a new company it is very difficult to adjust your absolute emission reduction target,” she explained. ” This model allows you to work out what the new target should be and also allows you to compare different companies’ relative performance in cutting emissions, even when they are growing at different rates.”
She added that the model would allow an expanding company to work out how steep its emission reduction curve would need to be to hit an absolute goal.
BT said it would also use the model internally to draw up an international road map for curbing its own emissions by 80 per cent by 2020. The company – which claims to have already cut emissions by 60 per cent between 1996 and 2008 – said it intended to achieve the new target through a number of measures, including purchasing low-carbon electricity, investing in its own renewable energy capacity and embracing energy efficiency measures.”

I found this very interesting and I think this could catch on.

All the best,
Fabian

It is that time again to get into the discussion of terminology in the corporate responsibility world.

The term “business sustainability” is now being mentioned more and more often in articles and publications.

One recent example of many: http://www.ethicalcorp.com/content.asp?contentid=5895 (Nothing against the interview, I totally agree with what she is saying)

Why should that interest us?

Well because these people that mention business sustainability are basically saying that the term Corporate Responsibility or even Corporate Social Responsibility is should not be used anymore when it comes to describe the roles and responsibilities of companies towards the environment and its stakeholders enlarge. Maybe it is not fashionable anymore?

In any case: The new term is “Business Sustainability” from now on they say.

Well again, dear experts, thank you very much for wasting our time. Please do not start another discussion on terminology but just help us change the way companies go about their business. Please let us all speak one language and not water down what the Corporate Responsibility movement has achieved over the course of the last 15 years.

It is vital now to show everyone that is willing to listen to what the Corporate Responsibility professionals have to say that WE CAN make a difference and change the world for the better. Corporate Responsibility might not be the ultimate tool to how to but it is surely one of many. And one more tool is better then nothing.

So let’s get to it and not argue about definitions, please.

All the best,

Fabian

Here are the top 5 news stories of the past weekfrom CorporateResponsibility.Net, our CSR partner website :

1) Blogs turn up heat on greenwash

2) Credit crunch savings help business go green

3) Advertising Watchdog Sees Big Jump In Green Ad Complaints

4) Berlin to reward good businesses

5) Big differences in perceptions of the success of corporate social responsibility efforts

Please visit http://www.corporateresponsibility.net for all other news items.

All the best,

Fabian

This is a follow up post to the one I wrote several months ago on the 5 top Corporate Social Responsibility (CSR) News websites. This time I am not writing about the news websites but good CSR newsletter websites which not every news website has unfortunately..

So here are the top five CSR Newsletter websites:

1. MallenBaker.net – Great newsletter with a personal touch from a leader in the field
2. Ethical Performance - Newsletter with many topical CSR areas
3. CC Briefing - Selected news on CSR
4. Business Ethics Magazine - Special focus on business ethics (obviously)
5. CorporateResponsibility.Net – Hand picked news articles from all interesting CSR news websites (I started this last week)

All the best,
Fabian

I guess some of you know what sustainability reports are. I previously wrote a post about the topic if you want to know more about sustainability reports.

Following up on this post I looked at some of the most interesting sustainability reports of the previous year. These reports include reports that are not called sustainability reports but rather CSR reports, Corporate Responsibility reports or Corporate Citizenship reports. I have tried to judge them on these factors. 1) Readability, 2) useful and relevant content, 3) stakeholder engagement approach, 4) amount of advertising to promote this publication (the less the better) and some smaller factors I usually judge reports on.

These are my top 5 Sustainability Reports:

1. Novo Nordisk – A Danish pharmaceutical company
2. British Telecom (BT) – UK Telecom Company
3. Camelot Group – Runs the UK Lottery
4. Vodafone – Global Communications Company
5. Alliance Boots – UK phamaceutical retail company

The ones that particularly stand out are the first three in my opinion.

Do you agree? If not what report was really good?

Today’s post will start a series of posts on more information about how to find a job in the Sustainability field.

I get a lot of emails asking me how to find a job in the sustainability field. And by sustainability field I mean a job or internship in the environmental field, corporate social responsibility (CSR) and related fields.

So let’s start.

Environmental and CSR Recruitment agencies:

1. Acre Resources Great UK, Europe and US recruitment company
2. Bright Green Talent Young company also doing recruitment in the UK, Europe and US
3. Recluta Search and Selection UK specific recruitment company
4. Ruston WHEB Specialist recruitment company (more senior vacancies)

Great environmental job websites:

1. Edie- the biggest on the web: Edie
2. Earthworks Jobs: Earthworks Jobs
3. The Green Directory: Green Directory
4. Sustainable Business.com : Sustainable Business
5. Grist: Grist Jobs
6. EcoEmploy: EcoEmploy
7. Environmental Career: Environmental Career

Please feel free to suggest other recruitment companies/agencies and websites if they are not on list.
I am sure there are a lot more out there.

Regards,
Fabian

What will be the future of CSR?
CSR has now been discussed in the companies across the globe for more the 15 years but a lot of people in and outside of business are very critical of CSR.
Their argument is that CSR is a management fashion that will go away at one point and be replaced by something else who knows what. And so far I think it is fair to say has the current practise of CSR only led to lots of discussion, numerous strategy papers, countless books and the odd spot of good communication of responsible business practices. But that’s it.

I have worked and still work in the CSR field and need to agree and disagree with this evaluation.
CSR may seem to not change the business world for the better but in my opinion these critics seem to have not been able to see that the business practice of large multinationals 15 years ago and their practices now have changed dramatically.
Yes I agree that there is a long way to go but at least companies are going in the right direction. And this direction is clear:

• More stakeholder engagement and
• Integration of CSR in their business practices.

Companies like Novo Nordisk, British Telecom, BHP Billiton and many more have shown that there is a way to integrate CSR practices into the daily and long term business.

For me the main challenge and test for every company across the globe is to prove the individual company specific business case of whether CSR is helping them to increase their revenues by integrating CSR practices in their daily business, mid and long term business or not.
This might not sound simple but companies need to treat this as the most important question once they decide to use the concept and contents of CSR to become a more responsible business.
The jury is still out whether CSR will be there to stay and but one thing is certain. Companies need to take more responsibility in our society now and even more in the future. And the concept of CSR is capable of being one part of becoming a more responsible company but it is not the solution. And companies that disregard this aspect of their societal responsibility are only waiting for trouble to come their way.

Welcome to our first blog post in 2008.
We would like to start this year with a question and your opinion.

What will change in the sustainability world in 2008 in your opinion?

Will companies act more responsibly? Will the US government finally accept that Climate Change is happening? Will the next US government be different when it comes to sustainability? What do we in Europe do to be more sustainable?

What do you think?

This is what I think.

1. Companies will feel an even stronger need to act more responsible when it comes to their actions and will see a stronger demand from their stakeholders to do more on all sustainability topics they are involved in.
2. The internet and all electronic communication channels will become even more important for companies as well as individuals to communicate sustainability topics and problems.
3. On the topic of climate change many countries around the world will begin to feel through an increasing frequency of natural disasters, etc that our world is really changing and there is only a very limited amount of time left before the “tipping point” is surpassed.
4. The concept of Sustainable Living will be even more popular then in 2007. Sustainable building, organic products, fairtrade products and all related products and services will continue to see an above average growth during 2008.
5. The whole topic of energy will be discussed very intensively during 2008. In the UK we will see the nuclear discussion taking off, in the US and worldwide petrol prices will continue to increase and plunge the world economy deeper into recession. At the same time the rich Middle Eastern countries will continue to heavily invest in renewable energy technology to increase their chances of survival after the era of cheap oil. But we in Europe and North America still do not act convincingly to change our looming future energy crisis.

These are just five points I see as important developments and changes during 2008.

But what do you think?

All the best,
Fabian