The concept of Corporate Social Responsibility (CSR) has redefined the role of business in the society, economy, and immediate environment. Business entities are now expected to account for their social and environmental impacts and also make possible contributions to the communities in which they operate. Although, many business owners and leaders have now accepted that CSR is ‘the right thing to do’, the activities of several business organisations have attracted increasing scrutiny. What exactly makes up an effective, impactful or measurable CSR?
In the last two editions, we began a revisit of the concept of CSR; examining the approach of organisations to communication across different sectors of the Nigerian economy and reacting to the often limiting perspectives about the concept.
We often hear of ‘controversial’ CSR like that of the recently concluded Big Brother Nigeria show or ‘uneconomic’ CSR as often lamented by the opponents of CSR. To wrap up the throwback CSR series therefore, we share from our experience, some of the strategies to maximising impact with CSR, as well as clues for stakeholders in identifying and judging effective, impactful, and measurable CSR initiatives.
Clear Strategy and Policy
An effective approach to CSR always begins with a strategy – a responsible business strategy which should take into cognisance the workplace, marketplace, community, and environment. In business, the process of introducing a product or service begins with a strategy; from development strategy, through growth to price, promos, and sales and marketing strategies. Likewise, CSR should begin with a strategy. A CSR strategy determines the activities, focus areas and social investment of an organisation; it also clearly articulates the expected returns to be derived from such investments. However, because CSR is often seen as an extra –a measure of ‘doing good’, many organisations fail to adequately plan for it.
Having a well-documented CSR policy is equally as important as having a CSR strategy. A CSR policy is a first step towards incorporating a standard practice into the daily operations of an organisation, which in turn guides against reducing it to mere philanthropy or an unstructured approach to CSR, which wrongly captures CSR as a burden rather than an investment.
Alignment with Company Brand Essence: What works for a food and beverage company will not necessarily work for a financial institution. For instance, the environmental and health issues that receive considerable attention in a company like Shell are far less relevant for a financial institution such as Diamond Bank, which currently focuses more on capacity building, empowerment, and youth development. Similarly, the water, health and sport initiatives that thrive in a company like Nigerian Breweries Plc are less important to an e-commerce store such as Payporte which will rather invest in show sponsorships and/or youth empowerment initiatives in tune with its brand essence of unifying people.
Moreover, a look into the CSR history of the food, home and personal care multinational, Unilever, which originated from the 1980s start-up as Lever Bros reveals that it links its social investments back to its business history. Its hygiene-related products initiated its CSR investments, notably the Dove worldwide campaign for Real Beauty. Likewise, the sourcing and environmental challenges that interest Starbucks, a company that has always positioned itself as a social responsibility leader, originated from its brand essence.
What resonates in all these examples is that the strategy, initiatives, focus areas, and strength of a company’s CSR activities vary according to the thrust of the business. This is the beginning of an impactful and sustainable CSR strategy, which creates a win-win scenario for both the society and the business.
Alignment with Stakeholders’ Needs and Wants: We already stressed in the last two editions that CSR has evolved beyond charity and donations – it is more than philanthropy. One crucial question to ask in developing a CSR strategy should be ‘would this strategy respond to the needs of our stakeholders?’ This is however bearing in mind that any individual (or group of persons) who has an interest in an organization is a stakeholder.
There are often cases of fall outs between construction/manufacturing/oil companies and their communities of operations even after genuine social investments have been made in such communities. For example, there is a pending case of a major manufacturing company in Nigeria whose host community released land for the company’s business operation with an enthusiasm and assurance that the company will compensate residents, re/construct roads, provide basic amenities, employ the people, and most importantly ensure residents are not exposed to undue health hazards. Five years down the lane, the people are lamenting a betrayal of trust. Yet, the company claims to have properly compensated and attended to the community’s wants. Effective CSR often begins with proper engagement with all stakeholders involved hence, it is not prudent to roll out laudable initiatives until the interests of all stakeholders – including employees, shareholders and community, have been considered.
Nevertheless, stakeholder engagement is most effective through proper stakeholder mapping and profiling on one hand and interaction and integration on the other hand.
Ethical: One of the focal points of CSR is the promotion of responsible business practices – for consumers, employees, and investors. CSR might be seen in the context of an overall paradigm of business ethics thus, every effective CSR should be ethical to both the business and the community of impact.
Nonetheless, the concept of ethics can be relative – vary from business to business or country to country. However, an organization must ensure that its ethics spans the supply chain and aligns with agreed standards, as well as national and international ethical standards, where applicable.
Monitoring, Tracking and Reporting: The implementation of CSR initiatives must always include monitoring, tracking, and reporting because no one sets out on an investment trip without a follow up. Meanwhile, these are the checks for an effective CSR strategy.
Monitoring often involves building and maintaining sufficient capacity within the company to manage processes, implementation and progress. This is most effective through dedicated departments/professionals who are better able to fashion out strategies, policies, and initiatives that conform to modern trends in CSR, as well as professionally manage them. It is therefore not enough for an organisation to roll out or invest in an ethical or socially impactful cause (especially when it involves other organisations in partnerships and implementation), it must also ensure to closely monitor the process and progress, in order to guide against a diversion from ethical/productive motives, controversies, or loss of investment.
Tracking of CSR initiatives implies measuring the outcomes, success or benefits of CSR activities on stakeholders (society or other relevant people outside the company) and to the company itself. When CSR activities are not tracked, the organisation is deprived the opportunity to identify, or evaluate investments for continued or increased investments. Moreover, organisations that do not evaluate the impact of their investments on the stakeholders, communities, beneficiaries and the business are unable to report – another crucial step for an effective CSR. There are various tools available for CSR tracking which should be explored by all organisations seeking impact.
The importance of reporting cannot be over-flogged. We already deduced from the last two editions of this page that CSR and CSR communication are capable of transforming both a business and the community in which it operates. Reporting performance and disclosing social investments to stakeholders not only nurtures corporate image and reputation, it also improves relationships, helps identify future risks and opportunities, increases business competitiveness and sustainability, as well as drives more revenue for the business, in many cases.
Although the practice of CSR in Nigeria can be said to be in a fledging state; one which requires great investment in educating the government, individuals, and companies, the reality of our present is that the practice of CSR has evolved from philanthropy to a more rewarding, impactful and sustainable approach. Hence, any forward-thinking business requires an integrated CSR model to remain sustainable, one with traceable impact and clear returns on Investment.
ThistlePraxis Consulting (2011), Demystifying Corporate Social Responsibility: ThistlePraxis Consulting, CSRFiles, Vol. 1, Issue 1, June 2011
ThistlePraxis Consulting (2011), From Thought to Action: ThistlePraxis Consulting, CSRFiles, Vol. 1, Issue 2, October 2011
ThistlePraxis Consulting (2012), Sustainability: The ‘S’ of Business: ThistlePraxis Consulting, CSRFiles, Vol. 1, Issue 3, January 2012
ThistlePraxis Consulting (2012), Doing Good: Beyond Corporate Philanthropy: ThistlePraxis Consulting, CSRFiles, Vol. 1, Issue 4, April 2012
ThistlePraxis Consulting (2016), Introduction to Sustainability for Finance Professionals: ThistlePraxis Consulting 2016, Training Manual