CSR: Zero Sum Charity or Strategic Opportunity?




Wayne Dunn
President & Founder, CSR Training Institute
Former Professor of Practice in Corporate Social
Responsibility, McGill University / ISID
wayne@csrtraininginstitute.com
www.csrtraininginstitute.com
Business is not a charity, is it?

Yet, many act like it is. They see the growth of corporate social responsibility as meaning that the responsibility of business is to make money for its owners and to give some money to support society. Support for society sits outside of core business functions. With no need for any relationship between the two and no focus on synergies and value optimization.

This is a zero sum model where the resources dedicated to supporting society and the environment are, quite simply, at the expense of the business owners.

Business must move past CSR as charity.

Quite simply, with the demands on today’s businesses and the current economic climate everything needs to become more efficient.

21st Century business is expected to produce value for society, be effective stewards of the environment and provide reasonable returns to business owners. This requires strategic thinking and planning and an integration of social, environmental and shareholder value.

Businesses that can effectively integrate and align business value, shareholder value and environmental stewardship will do better for themselves and for people and planet. When a business adopts a more strategic approach to CSR it can do more, produce more value. For its owners and for society and the planet.

Strategic CSR and Value – creating more winners

How can a business shift from a charity-focused approach to a more strategic, value generation approach

A simple starting point is to systematically examine its core business activities and see how they link to social and environmental well-being as well as business value. The next step is to look at key business pain point issues, and see where an how they link to society, environment and other issues.

Often there will be easy, straight-forward opportunities; a restaurant chain or other food industry company partnering with a food bank to provide safe, surplus unused food, a property developer or supporting research and application of energy efficient construction processes and materials, a hospital working with a charity focused on diabetes or other disease. Many times these initial partnerships can expand to other areas where there are shared interests and opportunities. Other times it will be more difficult to find the opportunities where business interest and expertise intersects with societal value and environmental stewardship.

But, it can be done and the recently adopted Sustainable Development Goals (SDGs) provide a great framework for business to use to identify these prospects. The SDGs, or Global Goals as they are sometimes called, are a set of 17 Goals that were adopted unanimously by the United Nations in September 2015 as a guide for development for all countries. The framework is used by NGOs, international and multi-lateral organizations and is easily adapted as a framework for business’ engagement with social and environmental value.

The SDGs cover poverty, education, health, gender, equality, environment, partnership and other key areas. Any business that wants to begin a serious examination of how it can contribute to social and environmental well-being while still focusing on its own business interests is likely to discover ideas and opportunities through a simple exercise.

Using the SDGs to integrate social,
environmental and business value.

I’ve found that simply bringing together a cross section of people from a business and having a facilitated discussion around the SDGs, one by one, can identify exciting opportunities and create enthusiasm and commitment. Many businesses are surprised to discover how much they are already doing that is linked to the SDGs, and how much opportunity there is to do more, not as charity, but as a strategic business opportunity.

Unfortunately, the reality is that business isn’t as usual. It has changed, and there is a rising expectation that business should produce social value and be an effective steward of the environment, at the same time as it is creating shareholder value.

This is true globally and is true for all businesses. The degree of truth may differ from business to business and region to region, but the trendline is the same. Society, government and other key stakeholders expect more of business today that they did five years ago. And they expected more five years ago than they did ten years ago. And, the collective power to act on those expectations and punish or reward, is growing at the same time.

Smart managers and owners, with an eye to long-term success and profitability, will factor in these changes and seek ways to efficiently optimize business, societal and environmental interests.

Strategic CSR and Environmental Stewardship

For some it is more challenging to make the connection between business value and environmental stewardship. They see reducing environmental impacts as having a direct affect on business profits and shareholder value. They see environmental stewardship coming a financial cost.

For years it has simply been accepted that it would cost money to meet environmental regulations and guidelines and that voluntarily going beyond them, voluntarily finding ways to use environmental resources and natural capital would necessarily add to business costs and take away from shareholder value.

Today, environmental issues are becoming increasingly important. The effects of global warming are confronting us regularly with record breaking heat spells and storms and other events happening regularly. Globally this is driving increasingly stringent environmental regulations and increased expectations that business can and should be better stewards of the environment.

Aligning environmental stewardship and business value

Some businesses are seeing opportunity in this situation and are creating products, services and offerings that use environmental resources more efficiently AND reduce costs at the same time. They are finding business value in environmental efficiency. Some of these are obvious. Hotels and accommodation facilities use large amounts of financial, environmental and human resources to wash bedding and towels. Most have developed programs to encourage guests to re-use towels and bedding rather than having them changed every day. This saves the business money and reduces its environmental impact.

Others are less obvious. Courier companies like FedEx and DHL are investing in software and systems that map out the most efficient daily routes for their drivers, taking into account all the stops they have to make, traffic patterns, road conditions, etc. Some are even integrating real-time traffic data to enable continual optimization. For the company this results in less distance traveled, less fuel burnt and less wear and tear on vehicles and less employee time spent. For the environment it results in less fuel and carbon cost and the reduced wear and tear on vehicles means longer life and less environmental costs from repair and replacement.

Other businesses are going further and using environmental efficiency as a business cost management strategy and a marketing and positioning strategy. A great example of this is Diamond Development’s Dubai Sustainable City.

From conception, through planning, construction and operation, every effort was made to integrate environmental efficiency, business value and quality lifestyle; a true alignment of social, environmental and business interests that optimizes value on all dimensions.

Going Forward

Going forward we can expect that society will continue to expect business to contribute to social value through their investments and operations. Don’t expect this to remain static – society’s expectations of business’ social performance had increased over time and we can expect it to continue to do so.

We can expect that environmental regulations will get more and more stringent and, at the same time, society will expect continuous improvement in business’ overall environmental stewardship.

The echo-chamber of social media and the increasing transparency and scrutiny enabled by the internet will keep pressure on business to meet these increasing social and environmental performance expectations.

Some businesses will struggle and resist, seeing it as a zero-sum game and will reluctantly improve social and environmental performance as required by regulation and as forced by consumers and stakeholders.

Other businesses will embrace the changes and look for opportunities. They will examine their systems and processes, and sometimes the very fundamentals of their business, looking for those strategic opportunities where business, social and environmental value aligns and creates breakthrough opportunities.

Today, and going forward, those who look at CSR as a Zero-Sum, Charity focused approach will find it costs them more and profits them less. Those that look at CSR as a strategic opportunity to meet the needs and demands of the marketplace, their stakeholders and their shareholders will find exciting Win Win Win opportunities.

CSR and Sustainability are EVERYONE’s Responsibility.

We all need to do our part, and we all need to be part of helping ensure others do their part too. It is easy to think that as individuals there is little that we can do that makes a difference. Easy to think that it is large companies and governments that need to change.

But, as individuals, we can make a difference. We can make a difference by what we buy, by what we re-use and recycle. We can make a difference by how we travel to and from work. We can make a difference by turning lights off and turning AC down.

We can make a difference by helping to educate and inform others. We can make a difference by demanding better sustainability performance from our leaders and governments, from the companies we work for and buy from.

There are so many ways that we can make a difference as individuals. Remember, CSR and Sustainability is everyone’s responsibility. Change starts with you. What have you done today? What will you do tomorrow.

Stakeholder Engagement Strategy: Help More – Hurt Less

Learning how to engage and work effectively with stakeholders can be hugely valuable for many businesses. The flip side, not learning how to engage and work effectively with stakeholders can be very costly.

There has been enough written on Stakeholder Engagement Strategy to fill many bookshelves, maybe an entire library. Yet, for many, it remains this complex, arcane topic that is not well understood and therefore, often not attempted, or just simply done poorly.

Much can be said for the more complex discussions and strategies around stakeholder engagement. They have undoubtedly worked well for many. But, much can be said for a simpler approach that can be more easily understood and absorbed throughout the organization.

Help more, hurt less is really the heart of stakeholder engagement in its simplest form. Find out who can help or hurt your business. Understand how they can help or hurt you and then understand how you can help or hurt them.

Then, simply help more and hurt less. For those that want things to be more complex, you can go and pull down any of the long, complex essays and books on stakeholder engagement and you will find that the message changes little, what they do is elaborate on tactics.

If you are like me and easily get lost in too much theory and tactics that are too complex you can simply remember Stakeholder engagement means help more and hurt less.

The Canadian University of Dubai and Canada’s CSR Training Institute have partnered to provide training, resources and support to assist Emirati and Gulf region businesses and organizations to be more strategic and effective in meeting the social and environmental expectations of society while, simultaneously, providing reasonable returns to investors and owners.

They do this through executive masterclass programs that make global best practices and learnings available in the region and by providing direct consulting support to appropriate programs. For more information info@csrtraininginstitute.com .

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