Embed CR Better. 20 insights.

Ethical Corporation, one of the leading players in CR business intelligence, news and commentary, not to mention conferences, has recently published a new report entitled: "How to embed Sustainability and Corporate Responsibility in Management Processes." And it's temptingly subtitled: "Save money, minimise risk and generate new business." Actually, this report came as no surprise to me: the lead writer, Judy Kuszewski, had been in touch with me a while back to interview me for my thoughts for Chapter16: Embedding CR in Human Resources. I know a thing or two about that!

 

This Report is a sequel to the very successful first 2009 Embedding Report, which I blogged about in 2009. With Judy at the helm, I knew this would be another great publication. Judy is an independent sustainable business expert with over two decades of working with companies on sustainable development, corporate responsibility and strategic communication challenges. She was previously Director of Client Services at SustainAbility, founding director for the Global Reporting Initiative, and Corporate Programmes Director at the Ceres coalition.

Embedding is as much of a challenge today as it was back in 2009. The report notes: "Embedding CR in business demands a thoughtful process to ensure CR awareness, tools and thinking are present and active in normal company operations, and not a bolt-on or afterthought." I think it goes even beyond "active and present". CR has to be completely and fully integrated into every action by every employee both on and off-duty, in order for all stakeholders to gain optimal benefit. It is the lens which colors every decision, the basis for every interaction and the inspiration for every business solution. That might sound a little poetic and Utopian, which may be somewhat of a break from my usual informative and factual style (yes, I am ambidextrous), but the more I work with organizations, the more I realize that, just as CR is all-encompassing, so Embedding must be all-encompassing also. Employees need to connect with CR thinking and approaches at many different levels. I was recently discussing the benefits of engagement with investors with a large, global client, who is well advanced on the CR road and has a very credible record. The company's investor relations communications, however, make no mention of CR. The company is embedding CR internally but failing to leverage it externally. I can count numerous examples of similar situations where CR is working in one part of a business but not in another. This is all about Embedding. This is about ensuring that CR is the baseline, everywhere, in every function, in every interaction. That's why this 2012 Embedding Report by Ethical Corporation is timely, relevant and serves to offer insights for companies on how to Embed better.

The Report is structured in three parts:

Part One: Embedding Activities: this includes aspects such as identifying the issues, engaging with stakeholders, making the business case, setting goals and targets, developing a roadmap and communicating CR.

Part Two: Case Studies: this includes fabulous insights from GE, IBM, M&S, Petrobras and Unilever.

Part Three: Embedding CR in Corporate Functions: This includes a deep-dive into different functions such as governance, R&D, Value Chain Management, Human Resources and looks at internal processes and community involvement and ends up with a set of conclusions and recommendations.   

I have picked 20 insights that I found to be refreshing, reinforcing and valuable from this report, in no particular order and in no particular hierarchy of importance. Just things I found worthwhile repeating. The following TWENTY insights are all quotes from the Embedding Report.

ONE: In an Ethical Corporation survey, 93% of companies recognize the value of embedding CR into business processes yet only 49% of companies confirm that CR is a clear component of overall company strategy, and 49% or companies do not believe that they  understand what is necessary to do to embed CR into their business.

TWO: Embedding requires a simultaneous top-down and bottom-up approach – to ensure consistency and shared values at the same time as local ownership of issues and impacts.

THREE: Healthy stakeholder relationships can provide a rich source of ideas and enthusiasm that can help tap your company’s innovation potential. They can help you gauge changes in company direction or product offerings. And if relationships are authentic and responsive, stakeholders can help protect your company’s reputation and licence to operate during difficult times.

FOUR: Companies that successfully embed CR in their business practices know that the toughest critics are often internal.

FIVE: Corporate responsibility requires communication throughout the process – with different audiences, for different purposes, using different tools. CR communications can help to bridge the divide for colleagues and management, helping them to understand and feel part of the CR agenda.

SIX: While much effort has been spent on corporate-level sustainability communications, there are many different things stakeholders – internal and external – want and need to understand about sustainability performance. One recent example is the rise in product-related sustainability information. General Motors’ Chevrolet company has instituted a product eco-label, debuting in North America throughout 2012 on the company’s vehicles. Dubbed Ecologic, the label is intended to put clear and substantiated product sustainability information in the hands of consumers where they need it most – the showroom floor.

SEVEN: Join-up communications. Ensure high-level internal and external communications are clearly linked to the company’s CR goals, objectives and strategy, to ensure alignment throughout the company’s activities.

EIGHT: Don’t neglect commercialisation considerations; sustainable R&D needs to be married up with marketing, so make sure you anticipate challenges in introducing more sustainable products into your mainstream product offering, and capitalise on the knowledge and experience of marketing professionals to guide your efforts.

NINE: A company’s sustainability risks and impacts – and its CR potential – may be closely tied to its activities up and down the value chain. Working with raw materials sourcing, contract manufacturing, logistics, distributors and customers can greatly increase your control over your CR objectives. For an increasing number of industries, such value-chain activity is essential to meeting consumer needs, reducing risk and expanding opportunity.

TEN: According to Elaine Cohen, author of the book CSR for HR   – a guide to embedding sustainability through the HR function – “The two aspects of human resources management in sustainability are: how does HR contribute to a business becoming sustainable, with the help of tools and processes that the HR function owns; and how does the HR function itself manage itself sustainably?” In other words, HR is both an agent for implementing a traditional sustainability programme within a company, and as a corporate function is itself subject to corporate responsibility issues, via their role in identifying, hiring and integrating people into the corporate structure.

ELEVEN: Often, the most important first step in incorporating a CR perspective into your operations is to understand your baseline performance against key criteria, though complex global operations and disparate supply chains can still render this analysis exceptionally difficult.

TWELVE: Immediate neighbours or “fenceline communities” are often what companies think of first when they think of CR in the community. Local people in the towns, cities and settlements where companies are active and have a presence are among the most immediately affected by company operations. ... Especially in areas of lower economic and social development, a company’s presence can have an enormous impact on local people and society.

THIRTEEN: Companies should be aware of the role of social media in giving voice to stakeholders, including local communities. Social media allows groups – even small community groups – to extend and magnify their messages, reaching much more influential audiences than they might have otherwise.

FOURTEEN: Consider how NGO partnerships can help you meet community needs and aspirations while making use of your core strengths and position as a business.

FIFTEEN: Corporate responsibility can get pretty complex at the best of times – what with complex scientific aspects such as biodiversity, cultural and managerial practices such as human rights, and issues that span the technical and political such as water use, it’s inevitable that there will need to be some specialisation. ... Colleagues in nearly all parts of the business need to have some basic shared understanding and commitment to ensure that all the disparate parts come together in the end. CR cannot be seen as the responsibility of the CR function.

SIXTEEN: The way to do it, as the adage says, is “a bite at a time”. Some sustainability challenges can seem so immense and overwhelming that people – and companies – can find themselves tuning out in despair, or minimising the scale of the problems as a means of rationalising their failure to solve them.

SEVENTEEN: Setting and delivering on targets requires a fuller implementation plan – a road map – to bring together a clarification of the company’s objectives with the physical, financial, human and intellectual resources required to get there.

EIGHTEEN: Green lens: Looking at the business through a different “green lens” means people spot new opportunities to reduce impacts and costs by less obvious means. (M&S Case Study)

NINETEEN: There are clear and growing examples of board and executive failures to meet stakeholders’ expectations on CR issues, which may sometimes come as a surprise to the companies involved. From allegations of nurturing a culture of risk-taking to the excessive executive pay packages that were the target of the “shareholder spring” of 2012 annual meetings, many boards appear caught out by stakeholder expectations.

TWENTY: Achieve a few early CR successes, and you might be excused for wanting to rest on your laurels. But CR isn’t something that can be “done” and left on a shelf – it’s a continual part of risk management and market creation.

Great gems of wisdom and advice, and nuggets of thought which lead to action to Embed better. Ironically, the report closes out with the statement: "Perhaps the larger goal is to stop doing “corporate responsibility” in favour of just doing business."  Here we have the Catch 22: One the one hand, we need to retain focus on CR in order to ensure that "just doing business" doesn't mean business which is inequitable, lacks accountability for social and environmental impacts and makes short-term profit the main goal, while on the other hand, we need to embed CR to such an extent that it is so well integrated in everything a business does that it's barely noticeable. That's the challenge. Embedding without the join showing. Not many companies have achieved this yet.... but there are a few en route, such as those identified in the case studies in the Ethical Corporation Report "How to embed Sustainability and Corporate Responsibility in Management Processes." If you are struggling to embed without the join showing, this report offers many more insights that the twenty I have shared.

While you are thinking about that, my next mission is to embed some ice cream. The challenge is to do that without the join (calories) showing. Perhaps CR is an easier option after all.

elaine cohen, CSR consultant, winning (CRRA'12) Sustainability Reporter, HR Professional, Ice Cream Addict. Author of CSR for HR: A necessary partnership for advancing responsible business practices  Contact me via www.twitter.com/elainecohen   on Twitter or via my business website www.b-yond.biz  (Beyond Business Ltd, an inspired CSR consulting and Sustainability Reporting firm)