As climate change has become the ‘hot topic’, the concept of Corporate Social Responsibility has been down played in the media.
We believe that the key to managing any climate change issues is the same as the key to managing wider issues of corporate social responsibility – Sustainability.
In fact, both climate change/carbon management and corporate social responsibility can both be seen as part of the move to a new social, governmental and corporate paradigm – Sustainability.
What is Corporate Social Responsibility?
Corporate social responsibility [CSR] has many and varied definitions.
From the mushy
CSR is about how companies manage the business processes to produce an overall positive impact on society
to the hard edged
There is one and only one social responsibility of business-to use its resources and engage in activities designed to increase its profits
We suggest to you that CSR can be defined as a company’s commitment to operating in an ethical and environmentally, economically, and socially sustainable manner whilst balancing the interests of diverse stakeholders including improving the quality of life of the workforce and their families as well as of the local community and society at large
Ethics
The subject of corporate ethic would take a position paper in itself.
Corporate ethics in the age of Enron seem to some to be an oxymoron, and many New Zealand
companies have come up short in the way they have treated customers. This is largely because transactional managers have laid down and stringently enforced rules without providing an ethical and social context in which the organisation is to operate.
It is clear that some form of the ‘golden rule’ should govern corporate ethics. Recent research suggests that treating others well and in a way that you would want to be treated has positive social outcomes.
Organisations need to be completely clear about their ethical position, put in place systems and processes to monitor compliance, engage the hearts and minds of the people with exemplary leadership, and communicate this commitment throughout all the stakeholder communities.
Environmental Sustainability
The broad issues around environmental sustainability have been discussed in this blog
Organisations need to be completely clear about their position on environmental sustainability, put in place systems and processes to ensure easy compliance, engage the hearts and minds of the people with exemplary leadership, and communicate this commitment throughout all the stakeholder communities.
Economic Sustainability
Again, the concept of economic sustainability deserves a position paper in its own right. In the long run, an organisation will only be economically sustainable when it earns enough profit to pay for the total cost of capital.
The concept of economic sustainability is well understood and has been promoted by Peter Drucker since the 1960’s. In more recent times, Economic Value Added concepts, such as those promoted by Stern Stewart, have come to the fore.
It is clear that such concepts must be embedded into the organisation’s business model and clearly communicated to the stakeholder community.
Social Sustainability
It is in the area of social sustainability that CSR is usually played out.
Government, seeing itself as the representative of society at large, regulates and legislates to control an organisation’s social impact as well as its economic and ethical impact. In an increasing regulated environment, the position that the Government will take needs to be understood and factored into any consideration of CSR. The position government takes is conditioned by ideology as well as political pressure from the public and from other political groups.
Local government see themselves as the representatives of the local communities and thereby can have a similar position as central government. The overtly political approach of central government is conditioned somewhat at the local level by a more common sense approach in local government to getting things done.
Local communities interrelate to organisations as customers and partners, customers when consuming the organisation’s products or services and partners when consuming sponsorship resources.
The way an organisation treats its workforce and their families has many aspects. When an organisation lays off members of the workforce it is likely to receive attention in all areas – the ethics of outsourcing jobs to Asia
– the economics of exporting jobs – the impact of government attitudes to free trade – local attitudes to sweeteners to keep jobs in a region, and so forth.
With an increasing competition for talent, the consideration of an organisation’s impact on the workforce and their families goes beyond social sustainability and affects the organisation’s economic sustainability. Without enough people to get the job done, organisational initiatives are choked off.
The organisation’s position on social sustainability needs to be viewed as a core value of the organisation. Therefore it needs to be led, sustained, and managed by the CEO and the leadership team.
The Operating Model
So who has to make sure what happens on Monday morning?
Taking each ‘issue, some are more strategic while others are more operational – strategic level issues address values and beliefs while operational issues address organisational behaviours and capabilities.
For smaller businesses and non business organisations, most of the responsibility falls on the CEO and leadership team as they will be lacking access to the specialist departments discussed.
The new position of Chief Sustainability Officer reflects Sempre Avanti’s belief that we are seeing a paradigm shift that will place sustainability at the core of the organisational model for the foreseeable future. The CSO is responsible for the setting the leadership position on sustainability, engaging the rest of the C suite and top reports in the organisation to provide compelling leadership in each of their areas, setting policy and putting in place systems and procedures for ensuring organisational action is embedded in day to day routines. The CSO will have significant organisational power as well as significant influencing skills to ensure others buy in to the Sustainability programme,
Once an organisation has done all this work on CSR and Sustainability, the formal communication of the results needs to be considered.
You are asking for a PR disaster If it becomes known that your organisation has undertaken some CSR/Sustainability initiatives AND you are not prepared to report the results. The conclusion will be that it showed such a poor result that you are embarrassed OR you have something bad to hide.
However if you know you have the ability to solve or at least mitigate anything that arises then a poor baseline will make any improvements look good.
So before engaging in any substantive work on Sustainability, think through what you are likely to find and consider to what extent you act. Market and political pressure will force you to act sooner or later so you need to go into in with your eyes wide open.
Opportunities beckon for those companies that want to be leaders and not followers!
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