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CSR: greenwash or genuine industrial performance booster?

The concept of Corporate Social Responsibility (CSR) emerged at the initiative of environmental bodies and humanitarian organisations anxious to raise companies’ awareness of the environmental and social issues raised by their operations, and prompt them to adopt the principles of sustainable development. While some companies’ use of CSR as a marketing tool resulted in a type of communication dubbed greenwashing, the situation has considerably changed since then. Businesses understand now that CSR can be a key consideration in a company’s strategies and contribute to its performances.

 

What is CSR?

The European Commission has defined Corporate Social Responsibility as “a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis”. It is governed by the ISO 26000 standard, which revolves around seven core subjects: organisational governance, human rights, working conditions and labour relations, environmental responsibility, fair business practices, consumer issues, and community involvement and local development. In practice, CSR varies with the type of business operations, though it always revolves around the environment, the workforce and the broader community. It can play out in employee awareness-raising and sustainable development training, producing responsible, innovative products, using eco-friendly, locally-sourced raw materials, or recycling waste and reducing energy consumption.

 

95% of businesses see CSR as a core concern

A recent study(1) showed that CSR is now a core concern for businesses and 95% of them believe that CSR issues are set to become even more important in the future. Proof of companies’ interest in this approach: 70% of them associate it with senior management roles and 77% even associate it with overall company strategy. And yet some businesses fail to see the value it can generate, while others baulk at the sheer workload entailed in collecting data from a multitude of information systems. For CSR managers, it is nothing short of an assault course!

 

Translating a concern for society into company performance

CSR initiatives and industrial performance are not all that far removed, especially as it is possible to begin with any initial CAPEX. A few examples will suffice to drive the point home. An environmentally-conscious business that reduces its water and energy consumption reaps an immediate return. Its production utility costs and CO2 emissions dwindle. A company that uses an energy management system to measure and monitor energy use makes substantial savings. A similar result can be achieved by making the teams aware of sustainable development principles and training them in energy efficiency. A company that is concerned with employee safety and the quality of life at work sees its employees’ productivity and loyalty rocket, and the accident rate and absenteeism plummet. Not to mention that talented young recruits in search of meaningful work are increasingly drawn by the CSR aspect. So from the qualitative viewpoint, a CSR strategy is clearly a boon… but to what extent?

 

Use dashboards to guide the CSR approach

To fully appreciate the benefits gained from a CSR strategy, a company will need to set up performance indicators that measure the tangible outcomes and concrete improvements achieve through its CSR initiatives. Indicator reporting provides a quantitative basis for evaluating CSR, including energy and environmental data (utilities consumption, greenhouse gas emissions, discharges, etc.), quality of life at work (staff turnover, absenteeism, lost-time injuries, etc.), economic impacts (partnerships, innovations, etc.) and so on. By connecting factories and feeding the readings into a company information system, data can be historicised and automatically reported. The dashboard is then supplied with field data and can provide a clear view of the correlation between the company’s actions and its performances. It guides management in its corporate strategy and provides input for communication about industrial dialogue and sustainable development. It encourages employees to get involved, continue their efforts and suggest innovations that will contribute to overall company performance.

 

Provided it is managed like a fully-fledged company project, CSR can be a significant source of industrial and energy performance. So why not take seize the opportunity?

 

(1) Les nouvelles frontières de la responsabilité sociétale en entreprise : un modèle au service de la performance ? – 2016. A survey of 192 businesses.