Some people see Corporate Social Responsibility (CSR) as a cost. Others see it as an extraordinary possibility for growth. Either way, the planet is at a turning point and we need to work together to drive meaningful change.
For a long time, many organisations have suffered from balance sheet blindness. When tallying up their profits and losses, they tend not to calculate what damage to the world is costing them or society. That tide is turning and the evidence is piling in that corporate social responsibility affects your business performance. Deloitte’s recent global Climate Check survey of 750 global executives revealed that nearly 30% of business leaders say their organisations already feel the operational impacts of climate-related disasters, and more than a quarter are facing a scarcity of resources due to climate change. The fortunes of businesses are inevitably linked to those of the planet, and the most progressive companies are finding ways to make that link pay off. So, how can you unite your business on a CSR initiative to create social, environmental, and business value? With a growing number of Gen Z and millennials choosing where they will work or spend their money based on their values, ensuring your CSR vision is transparent and in line with stakeholder expectations is essential. So, where do you start?
Understand what forces will motivate your company to take CSR action.
If you want to introduce CSR or drive an initiative forward, collaboration is key. It’s likely that you will have to understand and influence a wide variety of stakeholders who will all have a different mindset on CSR, depending on their goals and motivations. Consider this: in a recent SAP Insights global survey of business professionals who are knowledgeable about their organisation’s sustainability initiatives, 17% of respondents believe that environmental sustainability is impacting their business now, 22% believe the impact is imminent in the next five years, and 61% believe that it the impact will come later.
These groups have different motivations for pursuing sustainability, how they go about it, and what they expect the results to be. The ‘nows’ are primarily motivated by philosophical, future-orientated drivers like CEO and board commitment, government regulations, the company’s stated purpose, and commitments to the United Nation’s Sustainable Development Goals. That’s likely because the ‘nows’ tend to be from large companies with revenue of $750m or more, larger discretionary budgets, and further-reaching impacts on the environment. The ‘nows’ also say that their companies have decided that there are strategic benefits to moving quickly. However, the ‘imminents’ and ‘laters’ are slower to act and are more influenced by traditional business priorities. For example, the ‘laters’ are more likely to be motivated by factors such as revenue and profit growth, and the ‘imminents’ are more likely to be motivated by customer demand and opportunities to develop new offerings. These two groups might deliberately take the ‘fast follower’ approach and let others shoulder the risk of experimenting with new solutions.
Any major business change can receive friction, so make sure that you understand your business’s motivations towards CSR, get early input from multiple stakeholders, and frame the conversation appropriately if you’re wanting to inspire rapid, focused action. Make sure that you can offer external and internal transparency on progress towards communicated goals and demonstrate understanding of the issues being addressed. Buy-in from senior leadership and strategic alignment between your companies services and the CSR initiative are also essential.
Define your goals and measure your impact.
While it’s impossible to fully quantify the impact of your CSR initiatives, you can establish a set of key indicators to measure your progress. At the highest level, measurement allows your business to make better choices about which programs to support and showcase the value of the work to stakeholders and shareholders. In essence, tracking your positive impact gives you the opportunity to maximise it. Many companies are also eager to track progress when it comes to their ESGs (environmental, social, and governance goals) because positive progress can help to get investors on board and provide reputational advantages. So make sure you weave KPIs into your CSR initiative to track the inputs and outputs. It’s easy to get caught up on vanity metrics which only track the input your company has made into CSR, such as how much money has been spent or donated. However, your metrics need to be well-rounded and balanced enough to track outputs and actual impact. You can also ask the community being served for a formal or informal assessment of your organisation’s CSR work. Beyond measuring social and environmental impact, it’s also likely that your company will expect you to report back on business performance. Some of the best areas to measure include revenue, reputation, recruitment, retention, and relationships. Showcasing cost savings, new customer acquisition, increased employee engagement, improved brand awareness, and so on can help to drive further investments into your CSR initiative.
Communicate your impact with a public-facing social impact report.
A CSR report is a periodical report that shares a company’s CSR actions and results. It’s a public way of sharing and summarising your commitments and actions in social and environmental areas and makes stakeholders aware of how your company is embedding sustainable development into its everyday operations. A good CSR report will present the organisation’s values and governance model and demonstrate the link between its strategy and commitment to a sustainable global economy. Reporting on your efforts will also help you to create internal and external buy-in on your CSR initiatives, meaning that you can continue to drive your vision forward. By sharing your impact, you also have the opportunity to gather feedback on your initiative, track themes and sentiment, and drive continuous improvement.
Businesses have a bright future – if they can create a virtuous cycle of social and economic prosperity. CSR can transform your business by being a driver of new skills, technology, innovation, and finance. However, CSR’s success depends on your ability to bring people on the journey with you.
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