Ask yourself: What does Corporate Social Responsibility (CSR) mean for your company? Decreasing the impact on the environment and climate? Philanthropy? Employer branding? Ensuring employees throughout the company commit to the importance of CSR is one of the main challenges for companies at this time. This text provides insight into the impact of CSR on your company. We will follow up on this with another article on concrete steps you can take to implement CSR.
The information provided in this article is based on an exchange of past experiences by member companies within the framework of the CSR Connect Learning Network supplemented by the expertise within Sustenuto, Agoria and Sirris.
We face a variety of challenges: climate change, demographic transition, migration, social inequality, etc. Our planet has been ignored for far too long and society needs to engage more positively. The UN General Assembly elaborated a global reply for this in 2015: the 2030 Agenda for Sustainable Development and 17 Sustainable Development Goals (SDG). This is a specific 'To-Do-List for People and Planet' to ensure sustainable development.
We have noticed a change in society's attitude in recent years. The call for specific actions to address climate change, sustainability and social justice resounds throughout human society. But how can a company undergoing the 4th industrial revolution take action? Instead of simply undergoing the change, your company can view the transition as an opportunity. The first step is to translate the CSR concept based on your company.
Impact on society
The European Commission has defined Corporate Social Responsibility (CSR) as follows: 'CSR is the responsibility of enterprises for their impact on society'. [i]
Taking the impact of a company as a major factor and assuming responsibility for this impact by taking specific actions is key. On the one hand, this means identifying and strengthening the positive impact of your organisation on society. On the other hand, it also means measuring the negative impact and taking action to limit this impact. The goal of CSR is to create as much shared value for all stakeholders (not just the shareholders) and society in general. Briefly summarised this means your goals reach further than the triple bottom line principle, the three Ps: People, Planet and Profit. The core element is ensuring your organisation grows in such a way that it contributes towards a liveable environment where wealth is distributed equally and that does not exceed the planet limits (refer to the figure below).
Identifying the impact
Organisations commit on a voluntary basis to integrate social, environmental, ethical and consumer issues into their operations and strategy in close collaboration with their stakeholders. The issues are assessed based on their specific materiality, i.e. which social impact is a 'material issue' at your company and within society. The assessment also takes the various stakeholders of your organisation and the impact to these stakeholders into account.
The materiality matrix connects the company's perspective to the social perspective and makes priorities visible. The matrix is a baseline assessment that indicates the issues to prioritise. The matrix provides answers to the following two questions: 1) What does the company consider to be their most significant impact on society?, 2) What do the company's stakeholders consider to be the most significant impact of the company on society? The matrix ensures the company sets up projects that address issues based on priorities.
Agoria, in collaboration with Sustenuto, is currently working on a CSR sector passport. This manual for Agoria members will help them set up their sustainability strategy and reporting. The CSR sector passport will include a materiality matrix for our industry.
Strategic and peripheral sustainability
Differentiating between peripheral and strategic sustainability is of importance during the sustainability strategy roll-out.
Strategic sustainability refers to projects supported by management. The project converts priority topics of the materiality matrix into specific and measureable KPIs. A company manager is the project sponsor and a CSR or sustainability manager takes care of project management. This guarantees the credibility of further activities.
Peripheral sustainability projects are ad hoc projects or initiatives. For example, neighbourhood activities, addressing plastic cups in the office mess room or increasing the green space at the company site, etc. These initiatives make sustainability visible, not just within the company but also to third parties. Even though these activities are local, small scale and may not have a significant impact, these have a significant influence when it comes to generating wide support for sustainability.
The combination of strategic and peripheral sustainability projects is therefore essential. It creates a link between the top-down strategy and bottom-up initiatives. .In an ideal situation, the company should have company ambassadors at every level who are personally committed to achieving the sustainability goals. CSR is only feasible when personal commitment is added to the organisation's goals. We therefore recommend that companies ensure that they do not limit specific initiatives by flexibly adding these to the overall strategy.
Sustainability as an opportunity
A company of the future is sustainable, otherwise it will not continue to exist. The added value of a sustainable strategy and partnerships is that they lead to innovation. These opportunities can be used to convert the business model based on co-creating social value.
Which results can you expect?
- Sustainability will ensure that your attractiveness as an employer will increase. 90% of millennials want to work for an organisation they believe in.
- Sustainability plays an important role in employee motivation.
- You can respond proactively to sustainability questions from stakeholders such as partners, suppliers, customers and investors.
- A sustainability strategy improves the reputation of your company without greenwashing.
- Sustainability decreases future risks to your company business model and therefore increases the resilience of this model.
- Meeting sustainability criteria ensures access to new markets.
- It provides a long-term competitive edge.
The following article will elaborate on specific steps your company can take to roll out a comprehensive sustainability strategy within your organisation.
European Commission, A renewed EU strategy 2011-2014 for corporate social responsibility, COM (2011), 25 October 2011 & Commission Staff Working document - Corporate Social Responsibility, Responsible Business Conduct, and Business and Human Rights: Overview of Progress, SWD (2019) 143, 20 March 2019.