What is Your Role in Corporate Social Responsibility?Posted in : HR Updates on 10 February 2016
Never before have we been more connected, engaged and in touch with global issues ranging from the refugee crisis, poverty, war, depleting natural resources, global warming, the distribution of wealth and the need for better solutions to health and mental wellbeing.
Corporate Social Responsibility (CSR), put simply, addresses the ethics of an organisation’s activities and how it operates in a way that is viable over the long term. It is probably better described as business sustainability. As we are sure you know, it touches on the way your organisation impacts on society, the economy and the environment and yet is still not high up on the agenda for many organisations (particularly SMEs) in NI. This may prove to be a costly mistake. A lesson learned recently by some big hitters such as Volkswagen, Audi and Tesco to name a few.
CSR activity is not to be mistaken as an interest for hippies, tree huggers or overzealous HR practitioners, but is a highly commercial and sound strategic approach, which impacts on long term business success. HR has an extremely important role to play in helping to establish and maintain a CSR strategy, which in many organisations will still be considered a ‘nice thing to think about’ rather than a modern necessity for long term sustainability.
In this month’s HR Insights we discuss the compelling numbers supporting a focus on CSR and the role HR have in it.
CSR initiatives generally fall into four main groups. HR strategy is intrinsically linked to all of these.
- Employees – focusing on the rights and well-being of employees and other workers in the value chain (including suppliers).
- Environment – ethical resource and energy use, recycling, carbon footprint.
- Community – how the organisation’s activities affect the community / public.
- Market place – ethical sourcing, fair trading, corporate taxes and anti-bribery.
Why is Corporate Responsibility Important?
Put very simply, modern consumers prefer to spend ethically and will switch brands (or providers) in order to do so, where quality and price are comparable. Modern employees engage with Corporate values which are ethical, and we know that higher calibre employees seek out employers which share their values and give them opportunities to do enriching work.
- A 2015 study by the Kenexa High Performance Institute in the UK (Kenexa is a global provider of business solutions for human resources) found that organisations that had a genuine commitment to CSR substantially outperformed those that did not, with an average return on assets 19 times higher. Additionally, the study showed that CSR-orientated companies had a higher level of employee engagement and provided a markedly better standard of customer service.
- A recent nine-country consumer survey of attitudes, perceptions and behaviours around Corporate Social Responsibility (CSR) – 2015 Cone Communications Global CSR Study – shows that CSR is now an integral part of how consumers lead their lives. In the Global CSR Study, consumers state that they have a more positive image (93%), are more likely to trust (90%) and are more loyal to (88%) companies that support social and environmental issues. Consumers consider CSR commitments when they look at which companies they want doing business in their communities (84%), where to seek employment (79%) and what investments to make (67%).
In order to reap the benefits, however, real action is required:
- The survey found that consumers have grown suspicious of corporate behaviour and are no longer willing to take corporations at their word 52% said they need to see proof of a company’s CSR initiatives to believe them.
- 90% of the over 10,000 consumers surveyed said they would switch to brands that supported responsible causes and 84% bought responsible products when available. 71% of those surveyed said they would pay more for socially responsible goods and services.
- Consumers now get their CSR information from a host of media ranging from advertising to company websites and social platforms. Educating target customers about your CSR means embracing emerging technologies and social channel. This need not be complicated. 43% of consumers prefer to read a company CSR report in a brief written statement.
With this growing level of customer and prospective employee sophistication, comes the reality that companies need to be looking at CSR as a means for competitive advantage.
Being a small or medium sized company does not exclude the need for CSR and in fact can provide the necessary differentiation to gain greater market share in the long term.
Establishing a CSR programme
Generally HR do not own the CSR strategy but may act as drivers for its establishment, particularly in SMEs. HR will generally be best positioned to act as a mirror to the ethical standing of the business. HR leaders can encourage the discussion about the need for and methodology behind establishing a coherent CSR programme or strategy. Establishing a robust CSR programme requires a plan (involving engagement with employees, managers, suppliers and others). The Institute for sustainable development (IISD) have developed a CSR Implementation guide with six key components:
(i) CSR Assessment;
(ii) CSR Strategy;
(iii) CSR Commitments;
(iv) Implementation Plan and Actions;
(v) Verification and Evaluation of Results, and
To gain some momentum, the following actions are recommended;
- Get the top team on board, and know how to argue the case for CR, including the business benefits, to different stakeholders.
- Identify the key stakeholder relationships that are necessary for ethical and sustainable business success.
- Clarify the areas of CSR that are relevant for the organisation, e.g. remuneration policy, working conditions, use of resources and environmental impact.
- Map out how the CSR strategy is aligned to business strategy and HR practices and create a review mechanism to track actions and progress (many will opt to use a balance scorecard or similar system).
- Ensure CSR is properly reflected throughout the suite of training provided including opportunities for sabbaticals and/ or voluntary / community projects.
- Effectively measure and evaluate CSR performance so that the results of CR activity can be seen clearly and improved upon.
The Power of People
Klara Kozlov, Head of Corporate Clients at the Charities Aid Foundation, underlines the importance and power of people in sustainability and CSR.
“Companies are not solely providing a financial contribution but are increasingly unlocking their intellectual assets and the power of their people to achieve a positive impact. Ultimately, coherency comes from clear purpose, programmes of work which are authentic to and valued in the business and an acceptance that it is critical to business performance.”
HR – What’s your role?
According to the CIPD, HR plays a central role in making sure CSR is embedded in organisational practice and isn't simply ‘window-dressing’.
The CIPD identify that HR’s role in CSR takes various forms, including:
- Supporting a broad CR strategy. Ensuring alignment between the organisation’s values, culture and business activity. Equally, learning and development functions play an important role in developing management capability and promoting organisational learning in corporate responsibility.
- Employment and people management practices. Embedding CSR into core HR practices. This applies to the whole range of HR practices, including recruitment, terms and conditions, health and safety, communications, diversity and fair treatment, learning and development, performance management and reward and benefits. One area of HR practice that has received particular attention is the fair treatment of whistle-blowers.
- Volunteering schemes. Leading community-based schemes such as employee volunteering programmes. Various research has argued that these can make important contributions to learning and development as well as vastly improving employee engagement:
HR are generally not getting involved in CSR… why?
The research report ‘The role of HR in corporate responsibility’ shows that many business leaders do not consider that HR plays a central role in CSR. The research shows that HR practitioners often feel they have to compromise their principles to meet current business needs. This is disappointing considering that the commercial benefits of adopting CSR which have been established via the research mean that creating a strong ethical culture and commercial success need not be mutually exclusive.This article is correct at 10/02/2016
The information in this article is provided as part of Legal-Island's Employment Law Hub. We regret we are not able to respond to requests for specific legal or HR queries and recommend that professional advice is obtained before relying on information supplied anywhere within this article.