What’s the point of CSR?

In the course of just a few years, Corporate Social Responsibility (CSR) policies have become de rigeur, as embedded in business thinking as financial forecasting and AGMs.

93 per cent of the world’s largest 250 companies now publish annual CSR reports according to research by KPMG. A 2014 EU directive will soon insist that large companies report on environmental and social impacts from next year. Cast a quick eye over Bristol’s major companies and nearly all their websites feature a section summarising their policies and activities.

There are a number of reasons, not least public expectation. Seen by some as a corporate reaction to public mistrust, people increasingly expect companies to behave responsibly and are vocal when they don’t. Take BP’s oil spill, VW’s emissions scandal, Theresa May’s executive pay reforms – it’s no longer business as usual.

The question is no longer if a company should have a CSR policy, but how it should be enacted.

“Rather than a CSR ‘policy’ as such, we have a statement to show to our team and our clients we understand our social, economic and environmental responsibilities and take them seriously,” says Mike Fox, planning director at Nash Partnership, a practice specialising in built environment design, planning and regeneration. Small measures have been taken to reduce waste in the office, source sustainably, and improve staff wellbeing, as well as pro bono charitable projects to help groups sustainably regenerate communities. 

“By the nature of our business, we play an important role in helping to shape places and we want to make sure those places are valuable and sustainable in many senses – social, cultural, economic and environmental. We also want to make a difference to the communities we live and work in and help our people to fulfil their potential – it’s as simple as that.”

Law firm TLT has a gamut of initiatives including pro bono legal services and allowing each employee to spend up to 36-hours a year volunteering during work hours. “We believe strongly that TLT should play an active role in supporting the communities within which we live and work from an altruistic perspective, but also from a commercial perspective,” says Sarah Pullin, head of HR; “if our communities thrive then so do we.”

But critics argue that CSR is nothing more than an empty promise; a PR exercise designed to project a positive image by doing very little. How much do companies really care?

Nobly motivated or not, there’s little doubt that executives care about the bottom line, and “there is compelling evidence that companies who practice CSR actually add revenue”, says Graham Sprigg, CEO of sustainability specialists, IMS Consulting Europe, based in Baldwin Street. “For larger companies this runs into tens of millions of pounds a year. There is a real commercial imperative that drives CSR; as well as it simply being ‘the right thing to do’.

“Anyone who doubts the positive impact of a properly planned and implemented CSR strategy is probably not going to be in business for very long. What might have begun as an initiative or guideline a few years ago is more likely to be part of a business’s licence to operate today. Take a look at the public sector. Companies who can measure and report robustly on their environmental, ethical and social activities will be judged and scored accordingly as part of any tendering process.”

CSR sells. A 2014 study by Nielsen found that 55 per cent of consumers would “pay more for products and services provided by companies that are committed to positive social and environmental impact”.

Mike points out that the business benefits mean that it’s much more than lip service. Responsible businesses recognise that employees want to work for employers with shared values – research by Global Tolerance, a consultancy, found that 42 per cent of the workforce want to work for an organisation that has a positive impact on the world – customers want to buy from brands they respect and investors understand that environmental and social reputation has a financial value.

“There are obvious financial and carbon-saving benefits for businesses to carry out environmental initiatives, [and] the economic and social benefits for communities are equally important for us as a business. We know CSR matters to other stakeholder groups, such as our clients, contacts, suppliers and – importantly – our staff.”

Embedding an effective responsibility policy relies on a modern interpretation of the concept, no longer token philanthropy, but a strategic effort to manage those core business impacts. CSR isn’t going to fix the world’s ills, but, whether you’re a big corporation or SME, there’s a good business incentive to try.

Main image by Scott Lewis

Read more: Bristol director wins national CSR award