ARE YOU STUCK IN THE CSR COMPLIANCE TRAP?
1. THE ART OF QUANTIFICATION
Many sustainability managers are currently struggling with showing the business value of the company’s sustainability and responsibility efforts to top management. My experience from the practitioner field is that most can answer what they are doing with their CSR programmes, but only few can answer what they actually get out of their efforts, because they are not measuring on the social and financial return of their CSR investments.
To many, the challenge is often that CSR is something that started in one corner of the company, as part of, for example, human resources, communications or public affairs. So when the efforts were first established there, it can be hard to lift the company’s CSR activities up on a business strategic level.
Consequently, a lot of our current consulting assignments consist of helping companies develop a business case for CSR, so that the company’s sustainability and responsibility efforts reflect and address the company’s particular business challenges, as well as opportunities in the industry and markets it is operating in.
Many companies focus too much or too long on how they can comply with codes of conduct, principles and guidelines rather than on building on top of their compliance to generate value-adding business activities.
2. THE COMPLIANCE TRAP
Another challenge that I am currently seeing in many companies working seriously with CSR is what I call “The Compliance Trap”.
The company’s top management may have put CSR on the agenda because their national legislation requires this. Or maybe, the company has become a member of UN’s Global Compact business network in order to document that they work in accordance with international principles and guidelines.
This admittedly gains ground for putting the company’s CSR efforts into system. The only danger is that many companies may focus too much or too long on how they can comply with codes of conduct, principles and guidelines rather than on how to build on top of their compliance to generate value-adding business activities.
In other words, many end up staring themselves blind on risk management rather than seeing the business development opportunities. This is often reflected in the company’s communication with focus on reactive words like to minimize, comply with and avoid rather than on proactive words like to optimize, develop and advance.
FROM RISK TO RETURN
This is in my view a real pity, since it means many companies are losing out on potential business gains such as more efficient operations and processes (e.g. energy efficient work routines), stronger employee engagement (higher retention and satisfaction), more effective communication and branding (stronger image and relations), differentiation from competitors (unique selling proposition) and innovative product development (renewal of the business).
What do you think – what is your experience with The Art of Quantification and The Compliance Trap?