Friday, May 10, 2013

When CSR drops the acronym and becomes "just good business"

During a week when people are talking about the recent accidents in Bangladesh, and what that means for companies sourcing from the developing world, I have been thinking about another subject that has great social impact potential, Corporate Social Responsibility (CSR). CSR in the US came of age in the 90s when companies like Nike and the Gap were called out for using supply chains that had questionable sources, including sweatshops. Companies began to focus more on improving the image of their social impact, and CSR was one way they have tried to do that.

CSR comes from well-meaning companies, but is often of limited impact on society. Sure, you can recruit star employees who care about working for a company with “heart,” and customers might view you more favorably if you can show a social concern. But unless you are a social enterprise that incorporates social impact into your business model, your CSR program is probably not making the most of your company’s potential impact.

I am not saying that companies should ditch their CSR programs or all convert to social enterprise. But companies should try to contribute where they can make the greatest impact. Everyone has seen the CSR program that has skilled employees packing bags of food to feed the homeless in the local neighborhood. Volunteering at soup kitchens is very important, but if your employees have been able to make your company competitive, why are you focusing your CSR efforts on something that could be done by an unskilled worker?  

What’s your company good at? When companies talk about CSR, they need to focus on their core capabilities. If your company specializes in telecom, you would be a great candidate for creating mobile education solutions. If your company is well known for finance, why not help not for profits develop ways to measure the social ROI of a planned project? Each industry has its own capabilities, and they all have potential CSR inputs that could have a far greater social impact if they just focus their efforts based on what they do well.

But when the social sector and the private sector collaborate, they often don’t look at these approaches in this way.  They should. If you are coming from a social organization why try to work with the CSR department of a company if you could integrate with their core activities? For example, USAID has a department that collaborates with companies on social issues. They will work with CSR teams, but they have found the longest term impact comes from collaborating with companies with common needs central to their business plan.    

Accenture has a great program that focuses on what they do best. Their development partnerships program helps companies targeting emerging markets for growth to develop the kind of social development projects that are essential to build traction in these regions. So here’s the logic: Accenture is a renowned leader in consulting, and they offer consulting services to socially-focused organizations that need them. Pretty simple right?

Another way to internalize social impact is by focusing on areas integral to a company’s operation. Usually this comes in the form of supporting your workers to increase productivity or making a change in your supply chain that improves profitability but also has a good social and environmental impact. The IFC worked with Southern African mining companies that realized that AIDS had a major impact on the productivity of their workforce. By providing AIDS education to their employees, they were not only having a social impact, they were also directly impacting the health and productivity of their workforce. Closer to home, companies that support bike to work programs or fit workplaces also impact the health and wellbeing of their employees.  When Apple advocates for marriage equality, they say it is because current laws hurt recruiting and employee morale in the US. But it also will have a social impact and will indirectly result in marketing that they have decided is good for their business.

I am an avid supporter of socially focused business decisions, and think the world is a better place because of CSR. But let’s make sure we get the most out of it. If your company is trying to make social commitments, why not make sure you have maximum impact?

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