“We are now witnessing a marked transition from Corporate Social Responsibility (CSR) actions where our impact, though meaningful, was limited and fleeting, to creating shared value (CSV) where we hone our business strategies and policies in a way that brings positive and long-term societal change. This will, in turn, sustain and even grow our businesses.”
Unit Trust Executive Director Ian Chinapoo shared his perspective at the recent Local Shared Value Forum, hosted by the Arthur Lok Jack Graduate School of Business. His words are a call for companies to rethink business as usual, to apply their core activities and resources to solving the country’s social and environmental problems. But how exactly does a company “hone its business strategies and policies in a way that brings positive and long-term societal change”?
Go beyond philanthropy
There is no rule book, but a good place to start is accepting that a responsible business requires more than philanthropic activities. The Global Reporting Initiative (GRI), the most commonly used CSR standard adopted by roughly 30,000 companies around the world, identifies 33 economic, environmental and social issues for companies to consider, in addition to the universal concerns of ethics and integrity, corporate governance and stakeholder engagement.
This is not to suggest companies take action on every issue; that is not a practical or helpful approach. However, a narrow focus on philanthropy has not yielded significant societal or business benefits. For companies aspiring to create positive change, it is time for a new strategy.
Identify areas of focus
A critical step in developing any responsible business strategy is determining the social or environmental challenges in which to get involved – a decision that has often hinged on the interests of leadership or other influential voices within the company. Such an approach is no longer considered good practice; rather, several factors should be taken into consideration:
- Local operating environment – What are the most significant social or environmental challenges facing the communities in which the business operates? What are their causes?
- Business purpose, vision, mission and strategy – Which of the social or environmental challenges identified are most relevant to these fundamental building blocks of the business?
- Core skills and resources – What are the company and its people good at? What resources (products, services, raw materials, cash, time, knowledge and experience, relationships and influence, etc.) does the company have and how can these be applied to help solve the challenges identified?
- Stakeholder views – What challenges are the business’ stakeholders (including but not limited to leadership, employees, customers, investors, communities, suppliers and NGOs) concerned about? Do they expect the company to take action in these areas?
- Historic and current activities – What are the business’ existing social/environmental initiatives and how do they align with the challenges identified above?
It is worth noting that while there is no limit to the number of social or economic causes a company can support, good practice would be to focus only on what is most important, to avoid spreading resources too thinly.
Define a vision for change
Once you identify areas of focus, the next step is to determine the kind of positive impact the business wants to create in society. Think of it the same way you would a corporate vision statement, which articulates the company’s dreams and hopes for the future.
Defining the desired effects makes it easier to select the interventions (e.g. volunteering programmes, education initiatives, behaviour change activities, financial or in-kind contributions) that are most appropriate, identify the beneficiaries, and set quantitative goals and objectives. Tools such as Logic Models or Theories of Change help give the process structure and rigour, while identifying appropriate performance metrics to be measured.
Implementing the strategy
This is where the rubber meets the road. Armed with focus areas, a clear vision of desired impacts, preferred interventions, and performance metrics to measure progress, it is time to implement the strategy. These activities do not need to be equal in profile or scale, nor do they all need to be started at the same time. Companies may choose to launch a single flagship initiative, supported by a number of more modest activities. In terms of timing, a phased approach is often the most manageable, especially with limited resources.
Whichever approach you take, it is critical to allocate appropriate time, funding and staff to implementing the responsible business strategy. Having one full-time Responsible Business Manager is often more effective than asking a number of staff to dedicate small portions of their time (say 10%) to managing these activities. This role should be supported by a committee of volunteers with a representative from each business unit or department. These volunteers should be well respected and networked within the company, with sufficient seniority to influence action.
A leadership level sponsor or board champion will also be critical to successful implementation of the strategy. The role of the board champion is to advocate for the responsible business strategy inside and outside of the business and clear any barriers to implementation.
Measure and communicate progress
Few companies in Trinidad and Tobago actively measure progress against their CSR ambitions. Even fewer communicate this progress effectively to their external stakeholders. To ensure a positive societal impact, it is critical that companies have processes and controls in place to track the inputs and outputs of their responsible business activities. In some cases, this data will be available from existing systems in the finance or human resources departments (e.g. financial donations), but these systems may be ill-suited to tracking other metrics, such as employee volunteering hours. Where this is the case, it’s a good idea to develop bespoke tools.
In terms of communication, social media provides companies with a quick and effective means of telling their story. However, companies should avoid the temptation to create self-serving case studies, which media-savvy readers will see through as marketing and public relations. Instead, focus on demonstrating how the company’s activities have created tangible benefits for direct beneficiaries and wider society, supporting these claims with testimonials and data.
Companies may choose to publish annual responsible business reports, for which the preceding guidelines are just as relevant. Reporting standards such as the GRI and AccountAbility’s AA1000 provide detailed guidance on best practice, and most large multinationals now produce their own reports, which can be a great source of inspiration.
No matter the approach, the direction of travel is clear: companies around the world are being asked to play a greater role in solving society’s challenges. It is only a matter of time before this trend manifests itself locally. It is within your company’s power to take advantage of this opportunity.
This article was originally published in the Trinidad & Tobago Express Newspaper on 28th March 2018.