Corporate social responsibility is about discovering your sustainable and profitable potential and achieving it, explains Richard Collins
The term ‘corporate social responsibility’ (CSR) was officially coined in 1953 by American economist Howard Bowen in his publication Social Responsibilities of the Businessman. Traditionally, CSR is aimed at encouraging companies to be more aware of the impact of their organisation on the rest of society. Social responsibility is an approach that contributes to sustainable development by delivering economic, social and environmental benefits for all stakeholders. It is a concept with many definitions and practices and one that addresses many and diverse topics such as human rights, corporate governance, health and safety and environmental effects. The purpose of social responsibility is to drive change towards sustainability.
A New Definition of CSR
I wanted a new definition of CSR that was less fluffy at the edges and one that applied to all organisations across all sectors no matter how large or small. Social responsibility is for everyone. Having been asked by a large regional business membership group to look at establishing an accreditation for social responsibility, I needed a new definition, a framework underpinned by an overreaching statement. I arrived at the following:
‘Social Responsibility allows you to enrich the quality of life for all by investing in social value as an essential part of an organisation’s culture. This provides purpose and impact and will ensure a sustainable and profitable business. It will help to build a better world for future generations by improving the environment and ensuring a cohesive community to live and work in.’
Making the ‘C’ in CSR More Inclusive
Increasingly the term ‘corporate’ has been challenged. This is because it excludes a large number of stakeholders, specifically the third and public sectors, and because ‘corporate’ does not encompass sole traders or smaller SMEs. For this reason, we have defined the ‘C’ in CSR to be more inclusive, for example:
Corporate Social Responsibility: Large companies (private sector)
Company Social Responsibility: Sole traders and SMEs (private sector)
Community Social Responsibility: Local authorities, schools, hospitals, etc. (public sector)
Charitable Social Responsibility: Charities (third sector)
Consumer Social Responsibility: Products and services
Citizen Social Responsibility: Training and workshops
All of us: Collective Social Responsibility
This new standard is defined by a truly holistic framework that allows all organisations to look at what they are already doing against the four CSR pillars of environment, workplace, community and philanthropy. Each social responsibility pillar is designed to help you benchmark, measure, record, report and communicate impacts on areas such as energy performance, recycling, staff engagement, health and wellbeing, community engagement and supporting local and national charities. This provides a structure that will help an organisation plan and act responsibly.
Having now established a new standard, we then developed the CSR accreditation as a visible testimony of independent, expert recognition of being a socially responsible organisation. The accreditation provides a roadmap for planning future activity and is very much the start of a journey that delivers impact purpose and social and financial value. The application process provides a simple and straightforward template where you can record activity against the four pillars of social responsibility. The application is assessed by an independent assessment panel that expects to see evidence to support the claims made, such as links to policies, testimonials, staff engagement, financial savings, etc. We believe that for good storytelling, there must be evidence of good story doing.
Why Be a Responsible Business?
Isn’t CSR just a distraction, an unnecessary cost, and a nice-to-have if you have time?
This is not the case. Social responsibility is driving successful businesses forward.
A structured CSR programme is the practical step developed out of an organisation’s set of meanings, beliefs and values, namely its culture. This sets out that an organisation’s social responsibility for its operational impact on society is integrated into the culture. It is a powerful force that gives meaning to people’s lives, reduces uncertainty and creates stability, but it is also the determinant of the success or failure of an organisation.
There is now no doubt about the impact of CSR on profitability for an organisation.
Social responsibility is a new profit centre. The future shape of business will be measured in both social and financial value. The clear drivers for CSR can be seen in a return on social investment (ROSI) and a social return on investment (SROI).
CSR now drives an organisation’s brand and business reputation and is a powerful emotional investment that has a positive impact on all stakeholders. It makes us feel good because it is about something good. It also adds value and gives greater purpose to our time beyond the job role and title. This is about staff engagement, improved productivity and mental health and wellbeing. Employees want to feel proud of the organisation they work for. An employee with a positive attitude towards the company is less likely to look for a job elsewhere.
Being a responsible, sustainable business makes it easier to recruit new employees. There appears to be a change in mindset from those seeking employment for the first time. This may be about underpinning value for the business in engaging with the next generation from a CSR perspective – in other words, an organisation that delivers social value. This is about lining up your values with those of the next generation.
And there is the measurable operational costs savings and better financial performance. By reducing resource use, waste and emissions, you can help the environment and save money too.
It also is easier access to capital. Investors who are pouring money into companies want to know that their funds are being used properly. Not only does this mean that corporations must have sound business plans and budgets, but it also means that they should have a strong sense of corporate social responsibility. Investors care about corporate social responsibility and so should companies.
According to the London Stock Exchange, investors now routinely analyse information on CSR (ESG) performance to gain a better understanding of companies’ future prospects. 60% of assets managed for EU investors incorporate sustainable investment strategies.
It is now commonplace to be scored on your CSR performance when tendering for both public and private projects. In the UK, one out of three local authorities insists on evidenced CSR as part of the tendering process.
CSR Is About the Future
Customers want to trust organisations they engage with, employees want to work for values-driven employers and investors want to know that a company is addressing its ethical responsibility. But it is also about delivering social value and investing in something much bigger than the organisation. It will help with clarity about what you want to get out of business and from your life. It becomes a road map for delivering greater purpose and value to all stakeholders.
There has also been a change in mindset; COVID-19 is a game-changer. The coronavirus pandemic has reintroduced us to a more authentic normal, one in which we have a stronger sense of community and social responsibility. It feels like we lost sight of those values and now we are beginning to see them again. The world has changed dramatically, and the focus on social responsibility has become far more important. We have already witnessed some incredible acts of kindness, support for struggling businesses, charities and individuals and positive business practices. This will become normal as consumers and stakeholders expect increased social value and form the businesses with which they are engaged.
So, ask yourself: what is the cost of not being socially responsible? Increased absenteeism, retraining, poor engagement, lost social capital, losing tenders, poor reputation, being dropped from the supply chain, not attracting new talent and a high-risk investment.
Can you afford not to be a socially responsible organisation?
Start your CSR journey now and plan for future success as a sustainable and profitable organisation. Take our free CSR Accreditation assessment survey online at www.csr-accreditation.co.uk/csr-assessment-survey/.