Today, Corporate Social Responsibility (CSR) initiatives have become increasingly important for brands and corporations. Organisations are looking to make a difference in society and to help preserve the environment. A better brand reputation and positive consumer feedback are some of the results of CSR activities and actions.
What is CSR? How has CSR come to be a huge asset and economical lever for companies?
A brief history of CSR
Nowadays, corporations are expected to invest in charitable activities in the community and to be active in the preservation of the environment. This adoption of the CSR approach and implementation goes back to the 1800s right after the industrial revolution, when concerns about the well-being of workers were pointed out. Moreover, philanthropic activities were carried out, but at that time it was more an individual initiative than corporate. For example, John D. Rockefeller, one of the wealthiest American businessmen that have ever existed, donated numerous amounts of money to religious, educational and scientific purposes.
Even though responsible companies had already existed, it was not until 1953 that the term Corporate Social Responsibility had originated and was mentioned by Howard Bowen, known as the “father of CSR”, in his publication Social Responsibilities of the Businessman.
From the 1960s till the end of the 80s CSR began to take flight in the United States of America (USA).
In 1992 the “Earth Summit” in Rio de Janeiro was held and Agenda 21 was one of the major results of the UNCED Conference. Around 178 countries adopted the Rio Declaration on Environment and Development, Agenda 21. This marked the beginning of a universal approval of CSR.
By the start of the 21st century, CSR became an essential strategy for many organisations. Especially with scientific researchers raising awareness about “Climate change” and global environmental issues, CSR pivoted to also adopt “sustainability” and make it the core of its approach.
What is CSR?
There are many definitions of CSR and there is no agreed upon definition. For example, the European Commission defines CSR as “ a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis”.
No matter the definition of CSR, it is always about the practices and activities put in place by companies to endorse the principles of sustainable development. Thus, companies that are adopting the principles of CSR have responsibilities:
- Environmental: help preserve and respect the environment;
- Ethical: engaging in fair business practices, treating all employees, stakeholders and customers ethically and with respect;
- Philanthropic: giving back to society and engaging in charitable activities in the community;
- Economic: making positive decisions by adopting sustainable materials, transparency in the activity, etc. A company must be profitable in order to accomplish its other responsibilities.
CSR regulations and standards
Corporations are expected to have a positive impact on the environment and society. They do so thanks to CSR projects. However, there are no legal obligations and no laws that oblige companies to adopt CSR. In the USA, for example, CSR is considered as a “soft law” because it is not a legal obligation, but is considered statutory due to consumer expectations and internal company policy.
The same situation is observed in Europe. There are no legal requirements for CSR. But on the other hand, the EU Directive 2014/95 demands that big and public interest companies give insights on their extra-financial information about how they operate their social and environmental challenges.
Although CSR is still not a legal obligation, there is a tendency on an international level to legally enforce CSR, especially when the United Nations have endorsed the UN Guiding Principles on Business and Human Rights in 2011.
This information allows consumers, investors and stakeholders to evaluate the performance of these companies and motivates organisations to adopt sustainable business strategies.
To help guide companies all over the world to install a successful CSR policy, there are international standards such as:
- ISO 26000 which specifies the guidelines for CSR;
- AA1000 standards (AccountAbility) for the implementation of sustainable initiatives, stakeholder engagement practices and strengthening the credibility of an organisation’s social, economic and environmental reporting.
- BS 8900 certification in the United Kingdom that provides a framework for integrating sustainable development.
- EFQM Excellence Model developed by the European Foundation for Quality Management (EFQM) which is a self-assessment tool for companies to identify their strengths and weaknesses.
And many more Eco-friendly certifications and labels that companies can obtain by adopting CSR strategies.
Benefits of implementing CSR
A CSR approach is part of the company’s ethical responsibility which aims to promote and take care of its brand image with its employees and stakeholders. Working on its human and environmental aspects are strong messages to send to its employees. These actions will positively impact employees’ satisfaction and retention.
CSR initiatives can increase a customer's trust and public respect. Consumers are more and more perceptive to environmental issues and are impressed with companies that invest in charitable work and social commitment to improve “Life” on our planet. A customer is now more willing to purchase products and services from companies no matter their size, scale, or activity, that are socially and environmentally responsible and respectful. This can affect the financial situation, a better brand image and reputation for the company when a CSR policy is adopted.
Implementing CSR in your company has a ripple effect of positive good! It allows the company to stand out on the market while carrying out actions to save energy and reduce waste. With these actions and other sustainable business practices, more positivity is brought to our world.
Finally, more and more companies are starting to believe that a successful business is not only about the profit that is gained. It is also about making socially and environmentally conscious investments and thinking about the welfare and mental well-being of the employees.
How can CSR benefit from a digital solution?
A CSR approach is above all the guideline of a collaborative working group and is a real administrative challenge. Therefore, relying on a digital tool allows you to effectively manage your CSR approach and save time in its implementation.
All the information and guidelines related to CSR are centralised on a single dedicated platform. Relying on an Electronic Document Management (EDM) system will make it possible to channel information, avoid duplication of data and work on updated versions of documents.
You can have your employees’ feedback on your adopted policies via digital satisfaction surveys and make them feel more invested with Quality of Work Life (QWL) approach throughout digital questionnaires. The results can be transformed into key performance indicators and you can generate graphs and statistics from this data.
You can create an identity card for each of the main principles of CSR and determine your objectives for each one of them and you can monitor the progress and the achievement of each activity conducted by your organisation.
CSR reports can be automatically generated and statistical tools provide a global view of the company’s data in order to take actions accordingly. CSR reports are important as they show the extra-financial activities of the company and allow the detection of improvement points to take better actions concerning the society and environment.
The sustainable development approach can also be fully digitised. This transformation enables activities to be checked for regulatory compliance and to be monitored in real-time (in particular via the recovery of data from sensors and/or probes). Thanks to the regulatory monitoring modules, it is possible to have a customised display of the various news feeds.
A company’s level of CSR depends on its size, research and development, advertising, sales, consumer’s trust, labour market conditions and stage in the industry life cycle. All this information is important to adopt an “ideal” level and strategy of CSR. Corporate Social Responsibility is a strong lasting commitment that requires organisational and practical tools to make the approach effective and sustainable. There is nothing like a digital tool to be the best ally for planning, analysing, developing and communicating on the CSR policies and adopted strategies.
To go further:
> Improve your business by engaging a CSR approach with BlueKanGo’s digital platform and its app Corporate Social Responsibility (available on BueKanGo’s Marketplace)