Tag Archives: corporate citizenship

11 Challenges for Corporate Sustainability: A Review

24 Saturday Sep 2011

Posted by in CSR, CSR reporting

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Early this year, at the Global Reporting Initiative’s official launch in North America, Director of the Conference Board’s Center for Sustainability David Vidal asked a room full of senior CSR and sustainability executives:

What are the top three reasons for your company’s reluctance to embrace sustainability—and adopt sustainability reporting?

Now, as I prepare my keynote presentation for the Center’s annual summit next week on Innovation, Sustainability & Social Media, the answers to David’s question six months ago remind me of how quickly some businesses — and the sustainability space — are evolving.

Here’s what I wrote then on Vault’s CSR blog:

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The responses that came from an audience representing the glitterati of the corporate social responsibility world might surprise.

Keep in mind that a majority of them (I’m almost tempted to say all) don’t need another lecture on the business case for CSR or sustainability, are active advocates, and represent companies that–for a multitude of reasons–recognize the link to their bottom lines.

What these responses point to, however, is the continued sense of reluctance across senior leadership toward combining the social and environmental with corporate. The path to effective CSR isn’t a linear process by any means and these responses should help those who continue to struggle with mental and ideological barriers within their companies.

Because knowing the challenge is half the battle.

As you go through these, make an elementary checklist. Which of these sound familiar? How did you tackle them? Do any seem/remain insurmountable in the current corporate reality of thrift and inflexibility? Share your perspectives by leaving a comment or connecting with me @AmanSinghCSR.

And, without further ado, and in no particular order:

  1. Doubt
  2. Liabilities
  3. Denial
  4. Resources
  5. Causality
  6. Lack of Global Standards
  7. Benchmarking
  8. Lack of comparative credibility
  9. Uncertainty
  10. Fear of the unknown
  11. Fear of the known

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My estimation is that this list continues to evolve depending on the industry, the chief in charge, and even by which quarter we are in.

In coming days, I will review these challenges  — after hearing from some of business’ most eminent executives at the Annual Summit —  and hopefully shed some light on how some businesses’ have indeed managed to overcome them, and found advantage in doing so.

Stay tuned!

Does Expending Resources on CSR and Sustainability Destroy Economic Value?

13 Tuesday Sep 2011

Posted by in CSR

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Corporate Social Responsibility isn’t about giving money away and adopting the latest cause of activists. CSR and sustainability are approaches to business operation and execution that build employee engagement, improve environmental performance, create positive social impact, enable operational efficiency, reduce cost, foster innovation, strengthen relationships with customers and consumers and ultimately…create business advantage.

That was Dave Stangis, VP for Corporate Responsibility with Campbell Soup Company responding to University of Michigan Professor Aneel Karnani’s infamous editorial in The Wall Street Journal, “The Case Against Corporate Social Responsibility.”

Then, the argument was “capitalism versus corporate social responsibility, CSR versus profits, and where an idea like CSR fits into a business’ main objective, which is to make profits for its shareholders.”

Despite numerous debates [Fenton’s BIG CSR debate] and as many editorials and reports [Why There Is a Case for Corporate Social Responsibility], the inequity of the idea — or the perception that being responsible will cost a company money and therefore is an expense business doesn’t need — prevails.

But the actual essence of this debate no one can seem to pinpoint. Are we fighting over semantics or strategy?

Is it the misperception that CSR is a cost, a tagged on responsibility, and therefore, unnecessary for companies? Or that CSR is completely estranged from the notions of capitalism as Professor Karnani believes — and is, in fact, the wrong argument?

Since his controversial editorial, Karnani of course has continued to incite criticism for what many call an “extremely shortsighted and narrow view.”

Now, the associate professor of management and strategy for Michigan’s Ross School of Business is headed to New York City to debate his argument in real-time on the occasion of the CR COMMIT! Forum 2011, organized by Corporate Responsibility Magazine and NYSE Euronext [Details below].

Fashioned as an Oxford-style debate [DEBATE: RESOLVED that when companies expend resources on corporate responsibility and sustainability they destroy economic value], Karnani will be joined by Gerry Sullivan, president of the VICE fund, on the pro-markets side.

On the pro-sustainability side will be Paul Herman, CEO of HIP Investor and Dr. Vinay Nair, founding partner of Ada Investments and adjunct associate professor of finance and economics at Columbia Business School.

In a sneak peek, I talked to three of the debaters [Dr. Nair couldn’t make it] on the essence of their arguments as well as: How does each of them define CSR?

Take a read:

Thriving on the Value of Vice

Gerry Sullivan from VICE funds believes in the power of capitalism. His funds select well performing stocks of tobacco, alcohol, gaming and weapons companies because they believe that, “Vice industries tend to thrive regardless of the economy as a whole.” Anyone reminded of the root of the financial collapse?

“I believe in capitalism because it ensures that products and services coming out are tested on the profit mandate and ultimately are good processes because they come through the interaction and the ability to gain profit,” he said.

Fair enough. Historically, companies who do well tend to share more.

Making Too Much of CSR?

“My biggest fear of CSR is that people want to make more of it than it really is. A company’s ability to employ better people and deploy profits is the real goal. Everything else is settled by the market,” he continued.

But clearly there is a differentiator between companies that invest in their community and immediate environment over the long-term and those that focus on short-term yields?

Affirmative, says Paul Herman.

Citing the ever quotable example of BP, he said, “When you look at their track record, BP was not a good corporate citizen and lost 40% of shareholder value in just a few months post the oil spill. Companies are not prepared for the volatility of climate change and its effect on cash flows and natural resources.”

Further, “Research from Wharton School and other academics has shown measurably that companies that help solve social and environmental problems can enjoy a higher shareholder and portfolio value,” he said.

“This decreases risk for business and increases value,” he added.

CSR Cannot Dictate Social Enterprise, But Profits Can

Because it had begun to sound like a battle between two followers of capitalism with opposite operational ideologies, I asked Karnani to step in.

“Companies can maximize profits and social enterprise at the same time, which is why capitalism works well. This is where Paul makes a good argument. Of course companies should do all this,” he said.

“But we don’t need CSR to make this argument. It’s as simple as ‘make the money, help employees.’” he added.

Here is where the caveat comes in however, he said. “This isn’t always true. When markets fail, we cannot appeal to companies to sacrifice profits for CSR and it is naive of anyone to think that all the stakeholders are always aligned in their interests. If this were true, we wouldn’t need the study of economics,” he argued.

His solution? Going back to what he had argued in the WSJ editorial last year: Government regulation.

And this is where my problem with the debate starts: How can government regulate behavioral change, cultural perceptions, and a deteriorating environment? Or are we now talking of CSR as a program, an initiative, a fundraising for charity opportunity?

If so, was Karnani suggesting the route the Indian government took recently by “mandating 2.5% of net operating profits must be spent on CSR” by all publicly traded companies?

Perhaps, although we won’t know till the live debate at the COMMIT! Forum.

Back to Square One: What the heck is CSR?

Clearly, the next question: How are these men defining corporate social responsibility? Intentionally or not, I had hit the nail on its head.

VICE Funds: “CSR is Green, And It Isn’t Generating Green”

According to Sullivan, “CSR is embedded into green and green hasn’t generated green for most companies.” Also blaming the government for supporting “and pumping a ton of money into green jobs,” which many say has been a failed effort at reviving the economy, Sullivan continued:

The internet bubble taught us that having pool tables and kegs doesn’t make the companies money. If the jury is still out on whether good companies will do good things, I say they’re smart enough to treat their employees well. You don’t need CSR for that.”

“I would like the companies I invest in to not be socially responsible but responsible to their shareholders and producing products that the government can use to generate revenue. I certainly hope that these companies think highly of their employees but I’m less inclined to think that they would give up profits over socially responsible activities.

HIP Investor: “CSR is Generating Top Line Growth”

For Paul, the question isn’t about green or management. “You start by asking yourself what social or environmental problem you are solving. Companies who are doing well have a core mission of improving the world in some way and making money while doing so.”

Citing the example of banks, he explained, “Banks were started to help people grow their income and wealth and became more integrated in their communities.”

“Starbucks in the U.S. spends more on the health care of its employees than the coffee beans because they support a better quality of life for employees and a higher labor standard.”

The argument, at least for Herman, isn’t about the validity of CSR anymore. “It’s about generating top-line growth and bottom-line profits. That’s why employees and investor relations teams are key in solving this paradigm,” he concluded.

Karnani: “If CSR is Beyond Making Money, Then It’s Not Making Money”

“CSR is a very confused notion. If you just mean businesses doing good for society, then capitalism is actually good [for society]. If CSR goes beyond ‘making money,’ then it’s not about ‘making money.’ When a company does something socially useful and loses money over it, that’s CSR. And definitionally, CSR loses money,” he concluded.

Confused? Irate? Redeemed?

Want to attend the COMMIT!Forum? Register here or connect with me on Twitter @AmanSinghCSR for a special discount code. The Forum begins on September 26, 2011, at the Javits Center in New York City and offers a full two-day agenda complete with a CSR careers symposium, keynotes and workshops.

And if you cannot make it, stay tuned here for more coverage.

Marsh & McLennan’s 2010 CSR Report: Holistic, Aspirational, But Lean on Data

07 Wednesday Sep 2011

Posted by in CSR, CSR reporting, HR

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“Our corporate social responsibility is our best kept secret.”

What compels a company with 52,000 employees and with over 140 years of systems in place to publish a CSR report?

For professional services giant Marsh & McLennan, as CSR Director Christine Salerno put it, there was an urgency “to put a stake in the ground.” The company, following shortly on the footsteps of a rebranding initiative [from Marsh to Marsh & McLennan], released its first CSR report, complete with a press briefing at its New York headquarters, late last month.

At first — and second — glance, the Marsh CSR report is 21 pages of text and very little data. What the executives present at the briefing, however, had to say, was far more enlightening and worth noting.

After Silvia Davi, head of corporate communications and brand introduced the panel — an all-women team of Chief Sustainability Officer Elizabeth Barry, Chief Diversity Officer Kathryn Komsa and Salerno — Barry started off with some forward-looking statements.

1. Sustainability

“We were doing a lot [in sustainability] but we needed structure. Now we can gain much more from the same efforts by implementing them as part of a long term strategy,” she said, adding that, “This is not about today, this is about tomorrow.”

Our work in CSR is our best kept secret. Now we have decided to collaborate and communicate our successes and challenges because colleague education and engagement are key to the success of our sustainability strategy.

Pointing to a slide that charted key accomplishments since 2010, Barry noted that a majority of the data points were yet to occur. For example, the company is set to launch an internal “Green Traveler” program aimed at helping employees’ cut down their carbon footprint by educating them on telecommunication alternatives, etc. Also to follow later in the year: A “Paper Reduction Campaign” as well as a “Sustainability 101 Training Program.”

“I want everyone in the company to know that they are committing to a longterm strategy,” she emphasized. “Sustainability starts with people and our behavior and if every colleague made one tiny change, the impact collectively can be huge. It’s not a quick process but it is truly more sustainable.”

2. Diversity & Inclusion

The mission for CDO Komsa, who started in her current role in 2009, was “to create an enterprise-wide diversity and inclusion strategy.” “Our challenges are finding the right talent, resources, and the right market share in a multicultural world,” she said, adding a common refrain among the B2B sector, “Our raw material is our people and a diversity platform becomes a great way of creating shared value.”

Komsa also touched on an issue that has had insurance companies scratching their heads in recent years: How do you make a career in insurance sexy and attractive?

Noting that this is a big challenge and opportunity for Marsh, Komsa emphasized that her, “Team’s leading initiatives in coming months will be to tie in the four companies [Oliver Wyman, Marsh, Guy Carpenter and Mercer] and rebrand the insurance industry by emphasizing how we source our talent.”

3. Community Relations, Volunteerism, Philanthropy

Marsh and McLennan's 2010 CSR ReportSalerno who is an ex-investment banker chose to begin with a review of past challenges: “This is something that has always been done. What has been missing is the communications piece. There has been no cross collaboration internally within the units.”

“Our business case is to make sure that our CSR activities are creating impact in the communities we operate in and for our employees,” she added, noting that, “An engaged employee wants to stay. We want to make sure we are attracting the right people.”

The connection between CSR and recruitment is an increasingly acute problem for recruiters, especially in the B2B sector, where the commodity for sale isn’t so much a physical unit but organizational culture, intellectual growth and innovation. How do you leverage CSR as a recruitment strategy? [Join me at one of eight breakfast sessions on analyzing this very question starting next month.]

“Students coming out of college want to work for companies that are doing the right thing. Our strength is our people. So how do we use our biggest assets to create maximum impact?” Salerno responded.

4: Climate Change

In response to Business Ethics Publisher and veteran journalist Michael Connor’s question about setting goals on climate change, Barry pointed to the unique challenges of operating in cities like New York, where most companies don’t own their real estate. “Goals are hard for a professional services company. And when you add a lease to the equation, it becomes even harder. In most cases, we are in the middle of 10-year leases so in the interim, we are finding other ways to set goals, like how to reduce our real estate portfolio altogether.”

5: What Does Successful CSR Look Like for a Fortune 250 Company?

Employee engagement has always been a huge component of my blogs in the past because I truly believe that getting your employees on your side is half the battle for most companies struggling with reputation issues. They can be your best brand ambassadors and I asked the Marsh team what success looked like for all their CSR and sustainability efforts: A significant decrease in air travel, a certain number of LEED certifications, an internally set women and minority retention rate, or something else?

Repeating that they launched the CSR report as a way of putting a stake in the ground, Salerno emphasized that, “Employee engagement is a crucial piece and trying to quantify our efforts and rolling out a system to measure our activities has them talking.”

“We’re getting the information out there and they are discussing it,” she said, to which Komsa added that, “piles of resumes have been pouring in because the work we do aligns with someone’s values. That means our employees are talking, which is a huge win for us.”

Barry, however, might have put it best:

“This report doesn’t have as many foundations but it is an important story to tell. We don’t have all the answers but we do want to get started on finding them.”

At the end of the day, Marsh isn’t looking to solve the water crisis or achieve a zero carbon footprint. Their goals are moderate and their CSR report reflects a forward-looking attitude that is encouraging.

That they have a team in place approaching CSR strategically — and a lot more holistically than many other companies — is the right start.

Revisiting the PR Take on CSR: “Corporate Responsibility is Not Public Relations”

30 Tuesday Aug 2011

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Last year, the Better Business Bureau hosted an event titled Good Business 2010, where the day-long agenda was to analyze the increasing confluence of public relations (PR) and corporate social responsibility (CSR). Here’s what I wrote then on Vault’s CSR blog:

A Belief System For Your Company

Edelman’s EVP for CSR-New York, Michael Holland while highlighting his firm’s approach, emphasized that corporate responsibility was emerging increasingly as an indelible part of brand management for companies, although North American companies, while initially slow to embrace it, were quickly getting on board.

Defining CR as “A belief system for a company” he broke its significance for companies into three segments: 1) the social and legal aspect; 2) its immersion into the operational model; and 3) how to leverage it for competitive share in the marketplace.

What is the ROI for corporate responsibility?

Citing a recent survey conducted by McKinsey, Holland said that the business case for corporate responsibility had never been clearer for companies. “Companies that paid attention to CSR in the last three years reported an increase in their share price of 43% against a 12% increase for those who didn’t.” At the same time, profits for the first segment of companies increased by 16% versus 7%. I’ve often noted that metrics and numbers speak louder than words. These then, need no further explanation. See more results from the McKinsey survey.

Noting that the pressure for accountability was no longer the voice of a few dedicated advocates and had shifted to mainstream demands from all stakeholders for a company, Holland stressed that the tipping point was already here: “CR cannot be ignored any longer. Shareholders, employees and clients are demanding it.”

What is corporate responsibility all about?

Holland, interestingly, chose to answer this by focusing on the key misconceptions about corporate responsibility. Funnily enough his counter-intuitive tactic worked, bringing up several questions from the audience. He put it like this:

CSR ≠ Green
CSR ≠ Strategic Philanthropy
CSR ≠ Public Relations

CSR isn’t PR, it’s About Your Business Strategy

I have discussed in the past the huge difference between conducting brand management and reputation-building and immersing CR as a culture of change into your company’s strategy. I asked Holland how he advises clients to walk that fine line.

“First of all, it needs to start from the top. Secondly, it needs to part of a company’s communication strategy. And finally you need to define what it means to track the progress of your corporate responsibility. The problem is that the marketplace believes that CSR is cause marketing and philanthropy. Our task is to overrule that and teach them that actually it’s about business strategy.”

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Now, with several communications firms announcing CSR practices, where are we headed with the confluence of PR, brand management and CSR? I turned to the latest entrant in the field, Ruder Finn. Take a read.

Social Media and Leadership: Are Twitter and Facebook 21st Century Necessities?

12 Friday Aug 2011

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There is a lot of love for social media among many in the corporate social responsibility (CSR) and sustainability community. [Take this short survey and have your say: Useful, necessary engagement tool or hate it and a complete hassle?]

Lucy Marcus, founder of Marcus Venture Consulting, for example, posted a blog today on Harvard Business Review, that talks about a particular Groupon deal that annoyed her enough to tweet about it and how that rose several eyebrows and an eventual resolution.

David Connor recently wrote about his love for Twitter, calling it a fascination and being constantly impressed by the simplicity of engagement and the tangible sense of community the platform provides. In his post, he alluded to a recent confession of mine, simply titled: In Defense of Twitter: 5 Reasons Why I am a Mad Tweeter, which was a response to an alternatively headlined Wall Street Journal article.

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For those interested, here is a recount of my top five:

1) Community: Twitter has provided me with a very diverse community of individuals who are eager to engage, argue and collaborate.

2) Soundboard: Without the 20 odd tweets I send out every day, I wouldn’t get any work done. Sounds counter-intuitive, I know—but it’s true. You’ve got to go where your audience is. They have a voice and they like to use it—and as a blogger, hearing what’s working and what’s not is inarguably essential.

3) Collaborations: And of course, without Twitter, I wouldn’t have made HR Examiner‘s Top 25 HR Digital Influencers for 2011 or named among the Top 100 Thought Leaders by Trust Across America. Nor would I have been able to successfully put together the recent panel on responsible business with Carol Sanford, Jeffrey Hollender, Sarah Murray and Bank of America, or been able to interview thought leaders like Campbell Soup’s Dave Stangis, PwC’s Shannon Schuyler, EMC’s Kathrin Winkler and many others while at Vault—and collaborated with enterprising students like Ashley Jablow, Catherine Chong, entrepreneurs like Myles Lutheran and the EDF Climate Corp fellows, or published the much-referred to series on job hunting in CSR.

4) News: Believe it or not, Twitter has become a significant source of my daily news. With the help of coordinated lists, I can scan the morning news in one stream all at one source.

5) Innovation: How many times have you read an 800-word article in one the mainstream newspapers and thought “Wow, that’s interesting, I wonder how I could learn more” or “I’d love to get involved” but haven’t known what to do next? Well, because it’s so easy to connect with others on Twitter without having to jot down strenuous emails or phone calls, now you can!

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But Connor also brought up transparency and corporate accountability.

And here is where most companies struggle with the plethora of choices available today under the domain of social media: Facebook, Twitter, LinkedIn, Quora, Digg, StumbleUpon, Reddit, and the new kids on the block BranchOut and Google+, to name just a few.

So, how helpful are these channels? BRANDfog, a social media and CSR consulting firm launched a survey last week that begins to dig deeper into some of these questions.

Social Media and Leadership:

Should CEOs be engaging on Twitter for example? Does that help gain trust with customers, loyalty with employees, or raise the bar on transparency?

Recruitment Decisions:

Has social media become a benchmarking tool for prospective candidates in their recruitment decisions?

CSR and Sustainability:

And does a presence on social media help companies illustrate their brand values, mission and corporate citizenship?

What do you think? Take this short survey and have your say. Is social media emerging as the differentiator in today’s crowded market of jobs, business, and consumer loyalty?