Editor’s Note: A version of this post was recently featured on the CSR Reporting Blog.
I am often asked, by clients or people I meet in the course of my work: What is the difference between embedding corporate social responsibility (CSR) into business decisions and doing business that improves sales and profits, provided its ethical?
When you talk about embedding CSR into business decisions, it’s hard to know where business stops and CSR sets in. After all, both should lead to better business results. How can you know when a business decision has integrated CSR principles, or if it was based solely on goals of delivering income and profit growth? Doing “good” business, beyond philanthropy and community investment, is just doing good business. Or is it?
I often answer this question rather simply, in a way that more or less aligns with the direction described in the Big Idea of Porter and Kramer, who explain:
“The solution lies in the principle of shared value, which involves creating economic value in a way that also creates value for society by addressing its needs and challenges. Businesses must reconnect company success with social progress. Shared value is not social responsibility, philanthropy, or even sustainability, but a new way to achieve economic success. It is not on the margin of what companies do but at the center.”
My answer, then, is about the considerations involved in developing new business initiatives or products. If it’s about selling more to create economic growth (which is, in general, a good thing if business is done ethically), then this is hardly embedded CSR. Economic growth alone, as we have seen, does not always produce equitable social benefit and even risks perpetuating many of the global divides — poverty, malnutrition, access to medicine, etc. — that society faces today. Embedded CSR means approaching business development in a different way, that includes an assessment of the social and environmental impacts of potential decisions, and the social and environmental imperatives in the markets where a company operates. In making such decisions, then, economic considerations as well as social and environmental considerations share valuable weight in the decision-making process. The outcomes are measurable benefits to business, to the economy and also equitable social advancement.
So far, I suspect, there’s not much new here for the rather enlightened readers of this blog. Most of you already will already be familiar with shared value and integrating CSR type concepts. So let’s get to the point. It’s this. Vodafone. Mobile Technology. Economic Empowerment. Measurable Outcomes. Connected Women.
Earlier this year, Vodafone published one of the most fascinating reports I have read in a long while about the effects of mobile technology on women’s empowerment and improvement in quality of life. It’s called: Connected Women. This actually missed my radar a few months back when it was launched, in March, at a Vodafone Connected Women Summit. Better late than never, I guess, and what’s more, it’s still relevant, of course. I learned about it this week via an item from IndiaCSR, reporting the launch of the Connected Women report in India by Cherie Blair.
The report is the summary of research for the Vodafone Foundation conducted by Accenture Sustainability Services. In addition to assessing the impact of increasing mobile ownership among women, Accenture modeled the potential social, economic and commercial impact of five services in the areas of education, health, safety, work and loneliness in 2020. These services are:
- Mobile learning for adult literacy
- Text to Treatment: using mobile payments to cover travel costs to receive maternal healthcare
- An alert system for women at high risk of domestic violence
- A mobile inventory management system for rural female retailers
- New services to connect elderly people to their family, friends and carers.
The research ran in 27 markets around the world where Vodafone does business.
Conclusions are summarized in this infographic below, with the overriding message that the services Vodafone provides in the markets where it does business could enable 8.7 million women to improve their lives. Around the world an estimated 300 million fewer women than men own a mobile phone.
I guess we all know that mobile technology can support education, health, safety and work so it is clear that improving access in these areas will have social benefits. The Vodafone report looks at each of these issues in detail, and in relation to the special opportunities that women could enjoy, providing perspectives, data and impacts. There are some very compelling examples. The thing that I found most eye-opening is the issue related to loneliness. I guess, at some level, we know that phone and Internet can help older people feel connected. We have all heard the stories of delighted grandparents who sent their first email to their grandkids. But loneliness as a social issue is perhaps more real and more extensive than we imagined. In Spain, for example, 38 percent of people over 65 that live alone or have limited mobility report feeling lonely, the research shows.
“Loneliness and social isolation in old age can lead to sadness and anxiety and can even affect physical health. It is particularly a problem for women, since they are more likely to live longer and to live alone in old age.”
Vodafone’s initiatives in this area meet such real social needs — perhaps even ones that haven’t yet been fully articulated — and open up opportunities for great business. Vodafone cites a potential $1.7 billion annual economic benefit to society in 2020 through reduced healthcare costs and informal carers being able to return to work. This translates into a potential $450 million cumulative revenue for Vodafone through 2020. Just by helping older women feel more connected.
One of the neatest things in this report is the summary of findings and impacts.
In each area, there is a clear benefit for society and a clear revenue opportunity for Vodafone as a result of empowering women through technology. The report closes with four recommendations, that place focus on doing business differently, engaging in partnerships and considering new business models.
Focus on women’s needs and preferences: Only by understanding their different needs as well as user preferences in each market, can operators provide the tailored services that will be valued by women customers.
Local implementation with relevant partnerships: Operators will need to work in partnership with NGOs, partners and funders to launch programmes at scale. Working with local partners will enable operators to leverage their expertise and networks to reach more women more effectively.
Explore new models and funding options: Different economic models would be required to deliver the different services at scale. An estimated $900 million in donor funding would be required to achieve wide uptake of the modelled services in health, work and education in emerging markets. The mobile learning and Text to Treatment services are likely to require ongoing, large-scale donor or public sector funding. Nominal fees for services to recover development costs and public sector investments could contribute to these costs in some circumstances. Other services, such as those focused on work, safety and loneliness, have the potential to be self financing or revenue generating.
Use local infrastructure and existing technologies: Combining projects with existing services, for example the M-Pesa mobile money transfer system, or infrastructure, such as local healthcare networks, will significantly improve reach and effectiveness.
Back to the question of how to define embedded CSR/shared value, it seems to me that this is an example of exactly that. It seems to me that Vodafone is quietly pioneering new business models and innovative ways of combining social needs with business development.
It just so happens that I am currently reading Alice Korngold’s excellent book, entitled “A Better World, Inc.” In this book, Alice focuses on many of the ways that companies (including examples from Vodafone) are engaging in this new economy and achieving success through addressing social needs. In fact, Alice makes the point that “only global corporations have the resources, global reach and self-interest to build a better world.” She says:
“A Better World, Inc. showcases global corporations that are leveraging their formidable resources — often in partnership with NGOs — to help create a better world. Let’s be clear: Companies are not acting selflessly. Companies are in the business of maximizing profits. Yet many international corporations are learning that solving the world’s most pernicious problems is the way to win the global marketplace — as highly profitable, sustainable businesses.”
In combination with a fundamentally RATS approach (responsibility, accountability, sustainability, transparency), corporations have the potential to change our lives for the better. This Vodafone example shows how.
Images courtesy of Vodafone