The efficient implementation of a corporate social responsibility (CSR) strategy has the potential worldwide to alter “business as usual,” transitioning humanity into embracing a more sustainable long-term view. The development of methodological approaches that can lead to seamless external reporting, is crucial because this is one tool that can help enact such changes. For decades, industries have produced—and humans have consumed—without any awareness of the future impact caused by the consumption of a service or product.
Corporate social responsibility is also critical in helping society move forward on challenges including ethics, human rights, modern slavery, consumer education, stakeholder engagement and diversity and inclusion. The unification of all these components is eventually what defines whether or not a company is “socially responsible.”
The topic has matured dramatically in recent decades. CSR has led to the development of indicators of success and appreciation for such rankings as the Dow Jones Sustainability Index, OSHAS and the ISO 26000. Furthermore, there are initiatives such as the United Nations Sustainable Development Goals (SDGs), which intends by 2030 to achieve significant changes in humanity that could not be accomplished without a commitment from the industrial sector. According to a study conducted by PwC in 2016, 64 percent of the CEOs surveyed agreed that the implementation of a socially responsible and sustainable strategy is a fundamental part of their business model.
Michael Porter and Mark Kramer, who are among the experts in this space, have noted a lack of regulatory framework as one of the leading causes of CSR becoming overly philanthropic and not solving or providing long-term solutions for environmental and societal needs that are not met by government or civil groups. Consequently, this represents costs for any company. As a result, they have observed two interesting trends.
The first is that the absence of a regulatory framework allows each corporation to define their practices as “socially responsible.” Consequently, this lack of structure allows the reporting of any "good deed" as being “socially responsible.” This broad spectrum has been the gap between initiatives and impact indicators that are reflected when a real contribution has been made.
The second is that when a CSR strategy is not well-managed, thought-out, or implemented, stakeholders start to focus on the ethical practices of the company. Furthermore, when expectations are set too high on a company’s stakeholder engagement, an event that comes across as an example of not meeting those expectations ends up being seen as the company ́s fault and failure.
Therefore, what can companies do to carry out an efficient implementation of their strategy? What would happen if the focus is changed and the process begins with self-assessment for reporting as the first step towards a more effective CSR strategy implementation?
Unfortunately, during my several years of experience in the area of CSR and sustainability, I have seen this positive trend of using a business model that focuses on sustainability and responsibility is at risk of being disconnected from an efficient in-house model for implementation of such a strategy. In many cases, in order to deploy and then execute on these initiatives, companies design strategies that are inconsistent with the reality and scope of their business, or they develop programs and processes that subsequently present difficulties when attempted to be implemented.
The process of designing and perfecting a sustainable strategy is only the first step. The real challenge is to bring such a strategy to life and implement and integrate it smoothly throughout the company ́s business model, incorporating it into the corporate culture and everyday activities.
If a company does not know what to report, it usually does not know what to implement. After all, as mentioned before, there is a lack of regulatory frameworks for CSR and sustainability; however, there are several standards and guidelines that determine what should be reported to ensure the sustainability of a company. Some examples are the GRI, IIRC, Ecovadis and CDP.
Rethinking this process could result in a feasible solution for companies that are trying to embark on a more effective sustainability plan. The first step of sustainability implementation should be a self-assessment exercise that determines the strengths and opportunities for improvement within the broad spectrum of CSR. This approach is especially significant for territories like South Florida, were several headquarters or regional offices for the Latin America region operate. When the strategy is designed in one location and implemented in another, it is imperative to design strategies from the needs and context of the main stakeholders to guarantee future success. Self-assessment provides the baseline, helps report on progress, measure return on investment and truly demonstrate that sustainability is something achievable in in the future, creating shared value for society.
CR Miami is one of the partners at this week's 3BL Forum: Brands Taking Stands – The Long View, at MGM National Harbor, just outside Washington, D.C. this week, October 23-25, 2018. Over three fast-paced and dynamic days, the conference will showcase corporate voices on bridging the divide between investor relations and corporate responsibility, the “why” and “how” behind corporate decision-making on corporate responsibility - and when to take a stand.
Image credit: Belen Benitez