Through the CSR ‘Looking Glass’

Sustainable development has become a core objective for many companies. Sustainability is a crucial factor for competitiveness and businesses are expected to take on new social responsibilities. Businesses have to develop in a way that meets its sustainability needs without compromising its future needs. 

 

More specifically, they are required to show that their activities add value and have very minimal negative effect on the wider community. Policy makers agree that there is an existing need to reconcile the triple bottom line of wealth creation, social coherence, and environmental protection.    

 

Most organizations have been trying to develop Corporate Social Responsibility (CSR) programs in response to this need. It argues that unlike the past where companies’ management used to focus on maximizing short-term profits. But with the modern globalized economy, the “triple bottom line” gained an increasing importance to businesses’ long-term success. In other words, good behavior creates shareholder value. 

 

Businesses never exist in isolation and are not simply money mills. Employees, customers, suppliers, and the local community are all affected by the way businesses are managed. The ways products are made and used have an impact on the environment. Hence, CSR is not just about “doing the right thing,” but covers all aspects of corporate governance. It is about making businesses understand responsibilities associated with the business including the impacts on social partners such as local communities, protecting the environment, and ensuring good labor standards and good relationships between employees and customers. 

 

THINKING LONG-TERM

CSR cannot simply be screwed on to a company’s operations – it needs to be built-in to the culture and always supported by the top team. Businesses can see CSR as some form of strategic management that encourages the organization to look forward and think how its relationships will contribute to its bottom line in the long-term. Regardless of the size of the business, responsible attitude always has to be present. Simply fulfilling the minimum legal requirements is not enough. Businesses should always think about:

 

Employees. How are they treated and motivated? Suppliers. How to choose and deal with them? Customers. How do they view the business? Are they satisfied? Local community. How is it affected? Environment. What can be done to use resources more efficiently and reduce pollution and waste?

 

Complying with the above does not mean businesses cannot be profitable. On the contrary, CSR can help to improve performance, for example, reducing the use of resources, waste, and emission does not just help the environment – it saves money too! Simplest energy efficiency measures, such as switching off the lights and equipment when not used, can make a real difference on the environmental impact and cost reduction. In addition, considering waste implications during the designing stage of the product can save even more.

 

The way customers view the business is important, hence building a reputation as a responsible business can have a positive impact on how customers perceive it. The constant growth in sales of environment-friendly products indicates an existing demand with some customers going as far as insisting on dealing with environment-friendly companies only. Good reputation also makes it easier to recruit and motivate employees. Motivated employees are more productive and will stay with the company for longer, thus reduce the costs and disruption of recruitment and retention. 

 

Being proactive about CSR will create competitive advantage and reduce risk both externally (by protecting companies’ reputation and hence sales) and internally (through employee engagement). Investors recognize this and are more willing to invest. Hence, successful CSR can bring benefits such as distinct position in the marketplace, protection

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of employer brand, and building credibility and trust with current and potential customers and employees. 

 

THE HR ROLE

Human Resource (HR) is becoming an essential feature for CSR because of the growing recognition that staffing is an area of risk to a business. HR functions are useful to CSR for motivating and providing meaning to employees through communication and implementation of ideas, policies, culture, and change in behavior across an organization. HR is crucial for making CSR work because without it, CSR faces the risk of being dismissed as PR or shallow “window dressing.”  

 

Creating a culture of change and responsibility starts with HR. Most young employees are already environmentally conscious, so getting them excited about CSR is a great way to begin the change. Employees with enthusiasm for such programs may enable friendly competition and recognition programs. CSR can also help rehabilitate the employer brand and defeat the image of corporate objectives rooted in profit maximization – at the expense of society and the environment. 

 

Employer branding is about making sure that employees feel more than satisfied about the place they work in. Therefore, creating a friendly environment where employees can enjoy their work and can feedback concerns about the company’s behavior can help managers reduce risks of high staff turnover, as well as risks of losing key employees and facing high costs that come with recruitment and training of new staff.  

 

The amount of trust and credibility given to employees in an organization has become an increasingly important issue to consider when looking for a job. When trust exists in an organization, it forms a foundation for effective communication, employee retention and motivation, and better employee contribution to work. One of the benefits created by CSR is the recognition of the value of staff in an organization because if employees feel good about their work place and feel valuable to an organization, this feeling can pass on to others like consumers and clients. Therefore, the way a company treats its employees contributes directly to it and is seen as willing to accept wider responsibilities. 

 

There are different ways for employers to connect with their employees and the community. A company can share and communicate the value of CSR by implementing reward programs, charitable contributions, and encouraging community involvement and practices. Creating training and development programs that explain the connection between a company’s core objectives and the society at large, their value to the local community, and ways in which employees can get involved in CSR projects will sustain and direct these initiatives. 

 

MARKS AND SPENCER’S HIGH IMPACT STANDARD

Marks and Spencer (M&S) is one of UK’s leading retailers of clothing, food, home products, and financial services. It also has over 155 stores franchised in 28 territories, mostly Europe, the Middle East, Asia, and the Far East. All merchandise units contribute to the company’s vision “to be the standard against which others are measured” and each business unit develops its own CSR strategy based around the brand value of trust.

 

Over the years, M&S’ view on environment and social issues shifted from focusing on traditional philanthropic gifts to charity, to greater focus on customers, staff, and those producing its goods. The company believes that building good relationships with employees, suppliers, and wider society is the best guarantee for sustainable success, creating a foundation for its approach to CSR. The Code of Ethics has been developed to set out values and responsibilities that they have to all of their stakeholders.  

 

The launch of highly visible marketing and communications campaign, Look behind the Label was designed to tell the company’s customers about special qualities (many of them CSR-based),

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that make M&S’s product unique. This was the way of communicating the company’s social, ethical, and environmental values to their customers. The company holds regular meetings with their groups of suppliers to discuss CSR issues such as pesticides, sustainable food sourcing, ethical trading, and packaging.

 

Due to its unique corporate culture, M&S has one of the lowest employee turnover rates in the UK retail. In the past, the company had provided a number of training events for their employees such as Our Service Style and Buying Academy training programs which helped employees develop new skills and maintain the company’s reputation for outstanding products, value, and service. The introduction of 20% store discounts, free referral to physiotherapists, and access to confidential telephone counselling helped contribute to the outstanding corporate culture of the company. 

 

Reputation is what creates a competitive advantage for M&S, which has been established with their customers, employees, and suppliers over more than a hundred years. Customers associate the company with total dependability and value for money. 

 

M&S also does not forget about its responsibilities toward the environment and community, always taking the natural environment into consideration. The company has formulated an environmental policy, How We Do Business as a guide for the whole company to follow. M&S is dedicated to providing products in ways that help protect the environment, their employees, and people who use them.  The company realizes the importance of CSR but also understands that to be a credible player today, all the relevant social and environmental issues have to be taken into account. For example, the company’s plan to sustainability, Plan A, encourages customers to recycle with Oxfam and rewards them for cutting their energy use with M&S Energy. 

 

In the current climate, knowledge and innovation are a high priority for companies, and socially responsible practices can help them recruit and retain skilled staff. However, many issues still need to be tackled to raise general awareness of CSR. 

 

CSR should not just be a PR exercise but should lead companies to re-assess and recognize their core business activities, and ensure they manage risk and change in a socially responsible way.

 

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The Author

MIKE A. POTTER is an International Management Development trainer and HR consultant and has been CEO of MPA Consulting and Michael A. Potter International, Manchester UK for the last 15 years. If you would like to discuss EVP’s or traditional training methods more with Michael, please email info@map-int.com or visit www.map-int.com.

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