Resources - Additional Support

Corporate Social Responsibility is an expansive - and expanding - topic, and it is this very energy and flexibility that makes it so rewarding for organisations.  With research finding that an increasing number of recent graduates and customers are placing greater emphasis on CSR, it is also an area that few businesses or charities can afford to dismiss.

 Documents and Support

If you would like to design your own Corperate Social Responsability policy please see the sample attached for information on what should be included.

The East of England Development Agency (EEDA) have developed a brochure on CSR please see below for a copy of the brochure and case studies.

 

 

 

So what's the business case for CSR?

The below article was produced by Mallen Baker

One of the most asked questions within the literature on corporate social responsibility is: what is the business case for CSR? The fact that it is so often asked makes it all the more remarkable that it is   so often so badly answered.

In truth, there is no business case for CSR. Any more than there is a business case for innovation. Or for marketing. Or for outsourcing.  Each of these processes describe a range of possible activities - and any one of those activities may be beneficial or detrimental to the business. It all depends on the judgement in selection of which actions to take, and the skill and energy applied to achieving results. The business case, therefore, is for a proposed course of action, not for some broad general concept of a type of activity.

Take marketing, for instance. Marketing is something that successful businesses often do. And yet there have been disastrous marketing campaigns, destroying brands and businesses at worst. Innovation can be a company's lifeblood, unless you go somewhere the customers really don't want to go, as Coca Cola found all those years ago when it created 'new' Coke. So why is it that we think that CSR, which covers the nuances of relationship with customers, suppliers, employees, governments, local communities and the environment - not to mention shareholders - can be granted a single business case? It is a sign of the immaturity of the CSR movement that we still believe it is an 'it' that you either do or you don‚t do, rather than a discipline containing choices, dilemmas, benefits and catastrophes.

First of all, let's be clear about what we mean by a business case. A business case is no more than a rationale why, in taking a particular course of action, the business might expect to receive more benefits than it bears in cost. The benefits may be non-financial in nature, they may be long term - but they may also not be realised at all. What a business case cannot be is hard and fast proof that taking any particular course of action is guaranteed to achieve the desired results.

Too often, scepticism amongst business managers is fed by flimsy and rhetorical business case arguments. OK, so the majority of the population, if asked in an opinion poll, will say how important they think it is that companies are socially responsible. Any marketing manager worth their salt will know only too well that such sentiments, easy to give to a market researcher, don't translate into actual awareness of issues nor concrete buying behaviour. The use of such stats is more likely to damage the perception of the advocate of action than to help, since it suggests a lack of clarity in their judgement that may encourage the company to make mistakes.

One of the fundamental mistakes that people make in looking at this area is the belief that in order to create a valid business case, you have to create 'proof' that a certain course of action will work. There is no other aspect of managing the business where this high level of proof is expected or demanded. You can take focus group soundings, you can crunch the figures, you can imagine scenarios, but ultimately if any company could 'prove' a business case for its main  business propositions all companies would be equally successful because they would all be able to guarantee that what they did would work.

That isn't to say that there's nothing to be said about the business case. Although any business case needs to be applied to specificproposed courses of action, there are common themes that tend to emerge. The first of these is about risk management. Within the broadest band of CSR, there are a range of issues that can threaten the value and future health of the company. These range from the publicity around human rights abuses in the supply chain and the consequent interruptions to supply security to environmental incidents such as pollution incidents or explosions leading to regulatory scrutiny, fines and damage to brand reputation.  In order for this one to bite, you have to actually believe in the potential for these risks to come about, and that they would do serious damage that would outweigh the benefits of not taking action. This is one of those unfashionable thoughts - actually sometimes there is a more robust business case for taking the risk and being prepared to bear the cost if it goes wrong than there is in taking action. This is an unspoken but not uncommon judgement that businesses take every day and those promoting a business rationale for CSR ignore it at their peril.

The second theme is to do with the identity of the brand. We do now live in a world where in many markets price and quality are increasingly equal, and customers are using other bases for their buying decisions. This isn't as transparent a process as suggested by those polls about how many people say they think social responsibility is important. The relationship between individuals and brands is more subtle than that. The reasons why one feels favourably towards brands is made up of a number of factors, of which direct experience is themost powerful.

Take Apple, for instance. In common with many other people, I have a great personal affection for the Apple brand, and I am a fan - not a user, not an opportunist consumer, but a fan - of its products. The reasons for this are numerous. The quality of design in Apple products appeals to me. I loved the first Mac I ever used because it was designed as a computer for ordinary people to use. Speaking as someone who has long since graduated to a higher level of geek, I nevertheless have a fundamental belief in tools like this being available for people who are not tecchies. The products work, they are good quality.  They are a joy to use. And the Apple brand overall has a great senseof style and flair.

If the recent story about iPods being made in sweatshops had really stuck, it would have been very easy for many of those basic influences to be challenged. If the company had responded that what happened in its suppliers factories was the business of its suppliers, or some other such statement of denial, it would have not been in keeping with some of those aspects of the brand that are not even specifically about social responsibility. How can they be quality products if they're made in a sweatshop? How can the brand be cool if it is based on disregard for basic standards? How can this be a product for ordinary people if the company doesn't care about its workers, or the workers of its suppliers? Fortunately, of course, that was not Apple's response. I don't require them to be the best in their industry to retain my feelings towards those brand values, but I do need them to do the right thing when faced with a challenge.

So it is with brands. The marketers go to great lengths to establish identities for brands in the public eye. Very few of those brand identities are untainted by stories that run contrary to people's own values. It may not wipe the sales out the very next day (although that has also been known) but it may still make an impact.

Another common theme is the impact on staff. All companies are working hard to retain the best and most talented staff, even those in positions where they need to lose some overall numbers. There is sufficient evidence that employees are more likely to stay with, and more likely to recommend, their employer if they perceive them to be socially responsible. This can be supported by some of the softer end activities, such as employee volunteering and company charities of the year, but fundamentally it comes down to whether or not they feel proud to work for their company and that starts with the way that the company does business and the way that it treats them - its staff.

Occasionally other business case arguments come into play. There may genuinely be a positive business opportunity in seeking to create a product innovation that helps to solve a social or environmental problem. The consideration of such opportunities needs to be clear sighted - with a shrewd view of how people are rather than the way we would like them to be. For instance, there's no point inventing the most wonderful zero emissions motor car if it costs twice as much and drives like a dog. People will still want performance equivalent to what they already have - so that has to be part of the design spec. Environmentalists may disdain the ambition to have a car capable of burning the other guy off at the traffic lights - but such factors are key to marketplace success.

For some people, the presence of a business case at all somehowdiminishes the action being taken. For them, only if the company is taking the action for genuinely altruistic or community-minded purposes does it 'count'.

This will not do. Any business taking actions in the name of social responsibility where there is no business case, and therefore potentially to the detriment of its business, is taking a course of action that is fundamentally unsustainable. Once times get tough, the first thing the business will stop doing are the expensive non-essential things. Whereas if it is well understood how acting in line with the values of the business helps to support the value creation of the business then when times get tough it is the lastthing you would jettison.

The UK's Marks & Spencer is an excellent example of this. As a company that went through tough times over the last few years, it identified that the values of the company and the relationship of trust it had with consumers was one of its strongest assets. This was not an asset that could overcome on its own the company's poor choice of product ranges and lack of fit with its customers needs, but it was certainly not something to be thrown overboard in the name of cost -cutting. Over the last two years, the company has renewed and refreshed itself, improved the style and quality of the product, and the store image, and has brought its values far more into view with its 'Look behind the label' advertising campaign. Customers have responded, delighted that they can shop with the company again without having to abandon their taste for style and fashion.

That isn't to say that there is never a situation where the absence of a business case is not the deciding factor. There is genuinely out there a moral bottom line, and it is well for businesses to be clear where it is. It comes in the cases where none of us as citizens can countenance the consequences of what might happen. If there is a situation where your business may find itself complicit in fundamental abuses of human rights, forget the business case and do the right thing.

Sometimes doing the right thing will prove to have a retrospective business case. When Johnson & Johnson undertook their full and comprehensive product recall of Tylenol they did so because it was, in their view, the right thing to do even though some might think it disproportionate. They bore the immediate cost, but long term reaped the benefit of renewed trust - so important for a company in their line of business. That renewed trust meant recovered market share, in a way that companies that responded to similar circumstances more reluctant, such as Perrier, did not enjoy.

Overall, however, if anyone asks you 'what's the business case for CSR' you should confidently and unapologetically tell them that there isn't one, and that in any case they're asking the wrong question. If they can just work out what question they really want to ask, then they'll find that they get a much more helpful answer.

 

Facts, Figures and CSR Statistics

The following statistics and facts support the business case for Corporate Social Responsibility and can support you in identifying useful actions for your organisation.

According to the CSR Europe website:

  • Out of 100 empirical studies published between 1972 and 2000 examining the relationship between company's CSR policies and financial performance, 68% of companies indicate a positive association.
  • The Institute of Business Ethics (2003) stated that companies with a public commitment to ethics performed better than those without on 3 out of 4 financial measures and had, on average, 18% higher profits.  

The Ethical Consumerism Report (2005) has demonstrated that:

  • The sale of Fairtrade-marked food in the UK grew by over 640% between 1999 and 2004, and in 2004 the ethical consumption market was worth £25.8 billion.
  • 62% of the UK population chose a particular product or service on the basis of the company's repuration for social and environmental responsibility in 2004.

CSR and Diversity

The business case for diversity is not that dissimilar from the business case for CSR, and understanding the reasoning behind this argument can support your relationship with your audiences, expanding your market and leading to more socially responsible behaviour.

Diversity - an appreciation of the difference between individuals and the value that is inherent in these differences - is crucial with the changing demographic context and today's society.  In order for businesses to survive, they must make steps towards including previously marginalised groups, and ensuring that all potential customers are able to access their good or services.

Combining Diversity Management with Corporate Social Responsibility can maximise the effectiveness of these initiatives and lead to better relationships between businesses and communities. Indeed, this is only one benefit, as an appreciation of diversity has also been linked to:

  • Expanded market and customer base
  • Improved staff morale and working environment
  • Better engagement with communities and hard to reach groups
  • Competitive advantage
  • More efficient working practices

Combining CSR and Diversity:

  • Community initiatives: Working in the community through, for example, team building exercises or local charities, can improve your awareness of the potential market.  Businesses who understand this diversity are better equipped to respond to customers needs, able to identify gaps in the market, and well positionned to tailor their product or service to match the demand. 
  • Diversity in donations: Working with different charities or in different contexts can foster a greater awareness of and appreciation of diveersity.  Employees that are able to communicate with a range of people, appreciate different cultures and respond to new contexts, demonstrate the flexibility and teamworking skills that can support your business' development.
  • Changing values: Diversity has become an increasingly important element of business as society's change and in line with demographic shifts - and social responsibility is closely linked to these movements.  Being socially responsible involves being aware of your staff's needs (for example, caring responsibilities or family pressures) and appreciating their individual qualities.
  • CSR and inclusion: Diversity is all about inclusion - about enabling equal access and opportunities - and, again, the parallels with CSR are strong.  Are your premises accessible to wheelchair users? Could individuals with eyesight problems access your informational materials? Is your website accessible?   

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