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Should companies pay more attention to their corporate social responsibility in-house?

Little more than a decade ago, a Corporate Social Responsibility (CSR) strategy was only in the domain of large organisations or those with forward thinking boards. However in this fast changing corporate landscape, an effective CSR policy is now a ‘need to have ’ rather than a ‘nice to have’.

Most public sector tender documents will include a meaty section on CSR – fail that test and you won’t get the business. But this is, of course, about so much more than ticking a box to win clients.

CSR means different things to different organisations. The fact that this tends to be a self-regulated concept allows for enormous flexibility in interpretation.

BIS, the government department for Business Innovation and Skills defines Corporate Social Responsibility as ‘How companies address the social, environmental and economic impacts of their operations and so help to meet our sustainable development goal’.

The Confederation for British Industry encourages the wider view ‘Companies must be allowed to define CSR according to their own activities and context’

There is a sound economic basis for introducing, for example, a sustainability policy. It is estimated that more than two thirds of the largest companies in the world have put climate change central to their business, with half of the 500 top companies analysed demonstrating a significant reduction in their greenhouse gas emissions. Energy efficient and sustainable resource planning can have a direct impact on the bottom line – Tesco reckon to have reduced their energy costs by £200m annually.

Other elements of a CSR strategy include voluntary work, corporate giving, local good causes and ethical standards.

But what about the employees? Certainly a strong reputation for CSR can enhance employer of choice status. Most major corporate websites have a CSR section to boast about their activities aimed not just at clients but to encourage potential candidates.

Involvement in charity work can give employees a huge personal boost and sense of pride in their employer. I used to work for an organisation renowned for its charitable donations and supporting healthcare causes. But it was only when they opted to run a helpline for the annual televised ‘Children in Need appeal’ that their benevolence came to life for me. I volunteered to work with the donation helplines on the 8pm to midnight shift. It was hard work, but the atmosphere in the company call centre was electric. Directors of the organisation wore fancy dress and rolled their sleeves up to help, sharing our excitement as the sum raised – over one million pounds in our centre alone – was announced. But CSR doesn’t have to be confined to large corporates, SME’s can do their bit too.

Some companies feel they have covered their CSR commitment by giving large amounts of cash to charities. This may have little impact on the workforce, who, without some ownership or involvement may actually be resentful that as some colleagues face redundancy, large sums are donated outside the company,

Local causes can also have their pitfalls. To meet the ‘social, economic and environmental impact’ of their organisation, companies may work with neighbourhood charities. But you must choose your good cause with care. One of my clients invested in a local lower league football team, only to find that there was a culture of corruption and drug use among the players.

When it comes to employees, ‘active’ CSR is highly preferable to ‘passive’ CSR. It can be very powerful to allow employees to select the causes they wish to support, either through donations or their own personal involvement in voluntary work. Employee engagement and buy-in is key to ensure that your CSR policy benefits not just the external environment, but the internal stakeholders.

There is no shame in linking CSR with profit – in fact – it’s a desirable approach. John Lewis, the successful retail chain addresses this issue effectively. Their CSR report includes ‘how we are working with suppliers and our local communities, and how our employees and partners contribute to and share in the rewards of our commercial success’.

A well designed CSR policy can produce highly beneficial outcomes for companies, but it is easy to get it wrong or to miss the point. A client of mine ran an extensive and well publicised CSR programme. Staff were given two days a year paid leave to work on local social care initiatives, there were a myriad of ‘green’ policies and millions donated to charitable causes nationally. But the company had a very lax approach to bullying and I witnessed extreme examples of senior management bullying peers and staff. Employees started to vote with their feet in droves until the issue was finally addressed. But it was too late to avoid some expensive damage to the organisation through lost talent and poorly managed clients. What a shame that some of the ‘social responsibility’ was not directed towards vulnerable employees. A robust and transparent anti bullying policy and sympathetic HR administration should be ‘must have’ elements of a CSR plan – with far reaching benefits.

The message to employees must be carefully positioned. Approximately 75% of consumers expect businesses to take measures to sustain the environment. They also feel that leading an ethical lifestyle is important for wellbeing. Thanks to the instant nature of social media – consumers will find out very quickly if an organisation is behaving unethically towards its customers or staff. From the global stage such as the recent hacking scandal at News International to local complaints about bullying or dodgy HR practices, news travels fast. An employee or customer can quickly expose a company if it is behaving in a way that contradicts its public CSR strategy.

To recruit top talent companies must not only demonstrate a caring and sustainable attitude to their environment and local community, they must echo this commitment to their staff.

After all, as they say – charity begins at home…

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By Marcia Reid of Finchers Consulting Ltd.