Friday, January 21, 2011

CSR: does it pay off ?

CSR Europe has published a paper called Does Corporate Repsonsibility Pay Off? With a title like that, how could we not be tempted to take a look? This is the question everyone asks about CSR. CSR has moved from being a values-based feel-good-look-good option to a business-building strategic imperative which needs to deliver results to maintain its legitimacy. Of course, there are some who believe it is both :)

Anyway, the CSR Europe report  maintains that CSR is sector specific and therefore public policy on CSR should "support the integration of CSR into the strategic decisions of companies and to avoid consumers’ impression that a company can pick and choose CSR activities and ignore the areas where the most societal or environmental concerns are evident." The report goes on to recommend that "To make CSR concrete and targeted in each sector, leading companies, business associations, trade unions and NGOs should jointly develop a common agenda for respective industry sectors. The European Commission could play a strong convening role in promoting this agenda-setting." This makes sense. It aligns with the GRI approach of developing sector-specific reporting supplements, of which there are now several. It also reminds me of a great report which was issued some time ago by the Hauser Center which presented a model for materiality reporting by sector.

Anyway, again, the report looks at the chemical sector, the construction sector and the textile sector in detail, and makes recommendations as to how to link competitiveness and CSR in each sector. In chemicals, for instance, the focus should be on supporting and promoting innovation, implementing health and safety standards and ensuring high (eco-)efficiency. In construction, the focus should be on  public procurement processes, establishing standards (e.g. for energy consumption), enforcing the implementation of existing norms and regulations (e.g. occupational health and safety) and tackling corruption. In textiles, it's about "quality control and ensuring credibility" (though I can think of many more sector-specific issues in the textile sector).

Anyway, anyway, anyway, the most important conclusion of this report is that "Sector wide CSR challenges need joint action". This is not a new insight, however. We have seen many sector-specific initiatives developed by or concerning specific sectors over the past years, and I suspect there are many more to come. One of the best is the Access to Medicine Index which focuses on sustainability acpects of the innovative and generic pharma industry. Another is Edana, the European Association of the Nonwoven Industry which publishes sector specific sustainability reports. The World Business Council for Sustainable Development has been leading a cement industry sector initiative with a roadmap for carbon emission reduction up to 2050. The Sustainability Consortium leads many sector working groups focusing on electronics, food, home and personal care and more, involving many corporate players in their sectors. And countless more. 

However (yep, no more anyways), the CSR Europe report is unique in its focus on calling for public policies to be aligned by sector, and that "common agendas" should be developed by sector and supported by public policies.  "Corporate CSR measures could be evaluated if they are in line with the sector agenda and contribute to solving sector specific problems. In doing so sectoral CSR initiatives would stimulate, focus and mainstream action and contribute to a sustainable Europe."

This is one reason we should always look for a materiality analysis when we read Sustainability Reports. Each company has a set of unique material issues which are driven by its business strategy, size, location, sustainability performance, economic landscape, competitive environment and other factors, not least of which is the sector in which it operates. Navigating a Company's sustainability impacts requires this focus. 

Anyway, however (got em both this time), the CSR Europe Report is interesting and whilst it provides very detailed analyses of potential competitive sector impacts, it doesn't give quantitative data or concrete findings to answer the most-asked question Does Corporate Responsibility Pay Off ? Guess we will have to keep asking that one for a while longer :).

elaine cohen, CSR consultant, Sustainabilty Reporter, HR Professional, Ice Cream Addict. Author of CSR for HR: A necessary partnership for advancing responsible business practices Contact me via  on Twitter or via my business website  (BeyondBusiness, an inspired CSR consulting and Sustainability Reporting firm)

1 comment:

aequology said...

Interesting post. I´d like to suggest another example, Spanish Telco leader Telefónica that has included in its 2009 Corporate Responsibility & Sustainability Report a specifc part which highlights a number of issues directly affecting the sector. (Block 2)
In order to carry out this analysis, Telefónica made use of
the analysis of the materiality of the Information and Communications Technology sector, performed by the Global e-Sustainability Initiative (GeSI).

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