Integrating or delegating the CSR effort what should companies do?

For most companies CSR is believed to be an expense rather than a investment. This has resulted in quite different approaches to the CSR effort. Some have chosen to integrate their work inside the communication or Human Resource department while others have independent and dedicated to the task at hand. Yet others have opted for an outsourcing approach were they let their regular financial auditor, like KPMG or PWC or smaller consulting companies like Identitas or CSR Gender group do their reporting as part of their consulting services.

One would often think that integration would be the best approach that companies can take to their CSR reporting structure, but if you have no resources this might not be the case. There are actually some merits to outsourcing or teaming up with a business partner.

For one there is standardization of reporting. I have looked over hundreds of CSR reports of all types and there seem to be a infinite number of ways that one can write and report on the subjects within Environment, Social impact and Governance issues. Most of the major consulting firms will use a standard approach, either invented by them or using one of the majors reporting frameworks like Global Reporting Initiative (GRI) or one, or more of the standards issued by ISO. Standardisation enables analysts to compare and evaluate individual companies with each other across a wide range of indicators.

Secondly there is the subject of expertise and knowledge. Most business does not have CSR as part of their core business, they produce other types of products or service, which might or might not be related to such activities. The point is that most business does not have the capacity to create a sustainability report, which reflect a relative true image of the company’s behaviour. When organisations try to create reports for which they have no or very little understanding about their impact, at most these reports becomes fragments of reality and in worst case they are more or less conscious efforts at manipulation. So getting the right expertise in place can actual help the CSR reporting effort even though these resources are not part of the business itself.

Third, there is some merit to the focus on the core business. Some proponents of CSR almost make one believe that the only reason of business is to contribute to a better world that the product and organisation is secondary to this higher aim. However, any manager or business professional will tell you that the Reason E’tre for business lay in its product and not it’s organisation or how it conduct itself. This might come as a chock to some but without a clear product or service the organisation will not exist for very long and therefor have no way to behave either good or bad. This means that if you are managing organisations that produce technical systems for the medico industry you might not know that much about ethics or how to access your impact on society or the environment. So the best thing you might do, is actually to contact somebody who can help you with making this assessment and a external consultant might be the one you are looking for.

Corporate culture might be in the way of change. We all know that change in organisations does not come easy so you might want to have somebody who has no connection or previous history within the company to facilitate this change. Somehow it is just easier for a external consultant to ask the logistics manager if he receives any kickbacks from the main forwarders working contracts for the company than it is for the local communication specialist to do the same. The consultants role and work description is clear in most organisations that they enter and it is legitimate for them to investigate all the ins and outs of the organisations without there motives being put into question. So, for some companies it can actually help the process by having somebody from the outside either as an interim manager or consultant.

I think the lesson is that business “should do what it is good at” and if that includes CSR reporting, and organisational and cultural change management then they should do that. Organisations engaged in CSR activities should have a hard look at their core business and either establishes a strong connection with their reason for being or ask themselves if it is better concentrate on something else. If they come to the conclusion that they are not able or willing to engage in CSR activities, but that it is part of their license to operate they should think about what is best do a half ass job at it or find a suitable business partner to  facilitate the process.

Advertisements

3 thoughts on “Integrating or delegating the CSR effort what should companies do?

  1. Pingback: CSR and Access to Finance

  2. At the age of 55 years, Sustainable Development and Social Impact are two key buzz words I would like to contribute to .

    Would like CSR consulting as a vechile to maximise my contribution. Please guide.

    • I think it depends much on the region you are active in. In Europe and especially in Scandinavia there is much emphasis on reporting and development more and more elaborate tools. Currently there is a push for integrating social media in the communication effort. Other places there is much more focus on impact assessment. Within the development world there have for years been a strive for being able to measure what the impact ‘really’ is on the activities we are participating in. For business in general engaged in CSR there is more emphasis on activities rather than actually impact. So if one would look into the effect of CSR I believe that there would be opportunities there.

      I know that India is looking into CSR legislation. I’m not quite sure how far they have come but as I understand the proposal they are suggesting that companies of a certain size should use a certain percentage of their surplus on philanthropy. So why not guide business to use their money in a way that will give a significant social impact and at the same time bring added value to the firm through increased brand value, improved image, new innovation, reduced risk, etc.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s