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 www.twitter.com/elainecohen  on Twitter or via my business website www.b-yond.biz/en  (BeyondBusiness, an inspired CSR consulting and Sustainability Reporting firm)

19 textile sector companies sustainability profiles

Alongside the very worthwhile Sustainability Initiatives study benchmarking of 100 top-notch Companies and what they are doing to save the planet and us, Sustainable Life Media also released at the end of last month another fascinating report entitled: "Exporting Textiles: March to Sustainability. Preview of the coming decade: Textile Supply chain Sustainability Plans by Brands and Retailers." And as if that title weren't long enough, it has a subtitle: "Getting Manufacturers to Create Business Value through GHG (Energy), Water and Waste Conservation". The report was produced by cKinetics, and supported by SLM and Nitra. Anyway, now we know what it's all about, let's take a look.

We start off with a bit of context taken from the intro-page: "The 1990s was about the march towards manufacturing quality as the textile industry worldwide raced to adopt lean manufacturing and ISO driven quality practices. The 2000s were about ensuring ethical sourcing and labour practices. The coming decade is going to be about sustainability and optimally using natural resources to generate value in the textile supply chain. This report previews activities already underway that are harbingers of this coming movement." The report examines aspects of sustainability which concern the textile supply chain from the raw material (natural fiber or man made fiber) to the point that it is converted to finished product. The focus in the report is primarily on energy efficiency, greenhouse gas emissions, water and chemcial footprints and logistics. This is important as, the report says, the textile industry is the number one fresh water polluter on the planet, and is high in carbon intensity. In India, for example, 10% of the country's energy is consumed by the textile industry. 10% . Think about that for a minute................ OK. Stop. Move on.

The report provides detailed profiles of brands and their supply chain sustainability initiatives of 19 leading textile sector companies. Those that have programs under way are: Adidas, Carrefour, Gap Inc, H&M, Ikea, Levi Strauss, Marks and Spencer, Nike, Otto, Walmart, Continental Clothing. Those companies whose (supply chain environmentl) initiatives are at the planning stage are: Phillips-van-Heusen, Timberland, Inditex, Grupo Cortefiel, John Lewis Partnership,  Primark, Lindex and Tesco.  None of the Companies studies are in the unfortunate position of not having anything in progress or in the pipeline, which is a good thing, I suppose.

A few interesting initiatives: Gap are extending their environmental footprinting assessment right throughout the supply chain , including the mills that convert cotton into fabrics. This is great. Marks and Spencer are going big on Fairtrade cotton with a target of 20 million garments by 2012. Levi Strauss have extended Global Effluent Emissions guidelines to second tier suppliers. And more and more .....

The report profiles each of these manufacturers using the following parameters:

*  Overall approach and key initiatives

*  Aspects of supply chain sustainability the Company measures (eg energy, water, emissions etc)

*  Standards and Frameworks used (eg GRI, GHG PRotocol, Oeko-Tex or proprietary framework)

*  Sustainability intiatives relative to the Company's suppliers.

Some Company reports are highly detailed, with some, such as Primark and Lindex, did not fill a page.

(NB: The report does not analyse reported data or benchmark or rank Company performance; it describes what the Company is doing and which processes it has adopted). (Sorry, I know you all like rankings, but this report doesn't go there. Hah! Gotcha!)

In addition, the report summarizes the provisions of the key standards and certifications for sustainability (environmental) initiatives in the textile supply chain and ends up with some predictions. The report's key conclusion is that "evidence pointing to a new wave of sustainability is quite clear". The report predicts that (environmental) sustainability intiatives in the textile supply chain will be adopted by all major players, and will become a differentiating factor in supplier selection.

I might add a couple of predictions myself:

First, the word "traceability" will necessarily be on the lips of every manufacturer sourcing textiles and suppliers will need to be able to operate systems which give total supply chain transparency and accountability.

Second, manufacturers will need to change their own internal procedures. It will not be enough to require suppliers to be more environmentally friendly. Manufacturers will need to review the way they manage consumer demand and production planning which in turn affects the way suppliers can respond, and impacts the production, waste and logistics activities. Whether or not the 18 companies benchmarked will succumb to the pressures of slow fashion remains to be seen, but even if they continue fast fast fast fashion, they will have to start doing it a little differently to generate greater total supply chain effiiencies.

Third, as a result of all these brilliant supply chain efficiencies, manufacturers will pay their suppliers a fair wage and also share their supply chain savings with consumers, and we will all be able to afford a new wardrobe about six times a year. Oops. You don't believe that, do you ? Just kidding. :) Only 5 times a year.

The big advantage of this report is the ability to review 19 of the top players in the sector side by side and gain an overall  insight into what is driving environmental sustainability initatives in this sector. The textile sector is fascinating and contains many lessons for different industries. The challenges of environmental sustainability in the massively complex textile supply chains are incredible. This report is a useful addition to our body of knowledge and hopefully will serve to accelerate progress.

By the way, most of  the data provided in this report was sourced from Corporate Responsibility Reports. YEAH!  I told you CSR reports were good for something!

elaine cohen, CSR consultant, Sustainabilty Reporter, HR Professional, Ice Cream Addict. Contact me via www.twitter.com/elainecohen  on Twitter or via my business website www.b-yond.biz/en  (BeyondBusiness, an inspired CSR consulting and Sustainability Reporting firm)