Global sourcing trends

CSR Is Beyond Public Relations, There’s So Much More!

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Corporate Social Responsibility (CSR) is not a new terminology that needs introduction. It is probably one of the most used terms in the corporate dictionary. Over the years, CSR has become an integral part of the reputation building exercise of an organization. Initially limited to the C-suite, today it has extended to possibly every employee in a company.

So, what does it mean? The question here is not what the standard definition of CSR is all about. What does it really mean to an organization?

Is it simply a marketing exercise?

Knowingly or unknowingly, organizations could end up using CSR as a marketing tool. This surely is not unethical, provided the CSR initiatives are real and there’s no hidden harm being done. In September 2015, Volkswagen, a leading German automobile company, made headlines for evading emissions control while managing to advertise and sell their apparently environment-friendly diesel cars. This incident not only cost the company big in terms of money (nearly $15 billion in settlements) but also raised some question marks on the firm’s ethics. A key learning from this incident – it is better to “say what you mean, mean what you say and do as you promise”.

Is it merely a damage control mechanism?

Again, there is no point if it is just about trying to make up for the bad. No individual or organization gains respect by adopting this formula. In the past, many companies have had to resort to CSR to get back what they lost in terms of image and reputation. In the 2000s, when Coca Cola India faced severe backlash from local communities and environmental agencies for supposedly causing water shortages and allegedly having high pesticide content in their beverages, CSR became extremely important for the company to sustain its operations in the country. It changed its strategy to include the communities’ grievances and also created the Coca Cola India Foundation, Anandana. At present, the company’s CSR policy is very proactive and water management its global focus. At least some good certainly came out in the end despite the huge price involved. But that may not be the case always.

Do your employees embrace the organization’s CSR philosophy?

If an employee in your organization is asked what CSR means to them, what do you think their answer will be? Will they say donating to the needy, participating in tree plantation drives, or visiting an old age home? And if asked why they are involved in all these activities, will they cite reasons like “it is 5% of my KPIs (Key Performance Indicators)” or “because it is mandatory to participate”? Surprisingly, many a times the answer is an affirmative ‘Yes’ to these questions. And that’s perhaps one of the many reasons why CSR strategies and programs do not yield the best results. It may be strongly endorsed by the senior management but it may not be striking a chord with the regular A and B band citizens of the organization. The key here is to communicate the concept so well that it is completely absorbed by every nook and corner of the organization. While specific events are necessary, all the efforts shouldn’t be concentrated solely on organizing them and stopping at that. Also to consider is the fact that unless companies place the needs of their own people on top of the priority list, trying to establish themselves as the society’s savior may not be the best way to go.

Do you have a stakeholder engagement strategy in place?

Many have spoken about this in the past and it continues to be very important for CSR to work. It is important to not only figure out all the stakeholders but also prioritizing that list. It is an opportunity for an organization to demonstrate to everyone associated with it that it is ethically, socially, and environmentally responsible, and that it also cares when it comes to its customer’s customers, community, and other stakeholders. CSR done and promoted the right way can help a company gain more customers and make the best of new opportunities, differentiate from its competition, innovate, and co-create in the long-run.

Companies that have effectively implemented CSR

What is it really that clicks for those who have been able to do it well. Take a look at the ones on top and some reasons are obvious.

  • They have integrated CSR with their products and services. Think of Colgate-Palmolive and their toothpaste is all about giving the world reasons to smile.
  • They have made CSR an initiative to improve their services and become self-sufficient. Think of Infosys’ investments in Green and Sustainability Initiatives. In 2015, the company launched a 6.6 megawatt solar power plant at its campus in Hyderabad with an aim of cutting its Carbon Dioxide emissions by 9,200 tons, making it one of the first Indian corporate campuses run completely on renewable energy. By 2018, Infosys also aims to make all its other major campuses in the country completely run on solar.
  • They have genuinely felt the need to give back to their communities. Take for instance Mahindra & Mahindra’s “Mahindra Pride Schools” which are involved in providing livelihood training to youth from the economically and socially underprivileged sections of the community. The company also sponsors the “Lifeline Express” trains which provide medical benefits to people in far flung areas of India.

At its crux, CSR is representative of the conscience of a corporate from the perspective of ethics, integrity, legalities, and safety. It forms a huge part of an organization’s thought leadership efforts. To regularly monitor such activities and efforts of your supplier, subscribe to Supply WisdomSM reports and alerts.