In the current economic climate businesses of all sizes find themselves under immense pressure. Given this, perhaps companies can be forgiven for looking at corporate social responsibility (CSR) activities as cost centres ripe for cuts. The prevailing local approach to CSR, which centres around philanthropic and often un-strategic activity, all but guarantees this view. However, such actions may turn out to be short-sighted. Recessions provide risks as well as opportunities. Companies on sufficiently stable financial footing may benefit more from staying the course or even building on their existing CSR programmes, than cutting them.
In 2009, in the midst of the global financial crisis, an article in the Harvard Business Review argued there were five key reasons why companies should not cut CSR budgets in a recession. These have been retro-fitted below to suit our local circumstances.
- Critical national and regional issues require companies and their CEOs to lead in the search for solutions, recession or not.
- Recessions result in more poverty and exacerbate social problems that governments and NGOs alone cannot solve.
- According to the 2017 Edelman Trust Barometer, trust in all four institutions of society (government, business, NGOs and media) is on the decline. Companies with a strong commitment to CSR are better able to earn the trust of their stakeholders.
- Many employees, and millennials in particular, are attracted to and motivated to stay with socially responsible companies, and want to see commitment to CSR initiatives continue through tough times.
- An increasing proportion of consumers are willing to pay price premiums for products and services marketed by companies with proven and sustained track records of doing good.
To these you can add the risk of competitors filling the void created by companies who cut back on their CSR programmes. These all suggest that knee jerk reactions may prove to be penny wise but pound foolish.
Capitalizing on the opportunity
So, what then are companies to do? Continuing with business as usual may not be possible or even desirable. A good approach is to use this opportunity to objectively assess CSR programmes and their impact, then bolster them with greater structure and rigour. More specifically:
Be proactive and have a plan – For example, instead of setting aside a CSR budget and waiting for requests to flood in, have a plan. Identify appropriate causes and beneficiaries and make pre-determined contributions at set times in the year. Set aside additional funds with clear criteria on how and when they can be used. This way, when ad-hoc requests are received or natural disasters occur, there is a framework to guide the response. This is a particularly useful way to respond to natural disasters. Providing up-front funding to organizations with strong disaster response track records will allow you to be more focused and thoughtful in your post-disaster response. That is, it gives you time to assess what the greatest needs are, by who, and the best way to provide support.
Focus on materiality – When selecting your causes and beneficiaries try to focus on those that are underserved and most relevant to your business. Ask yourself, where and how can we have the greatest impact given our company specific resources? It’s a good idea to engage staff and consider their views in this exercise.
Form strong and lasting partnerships – Work together with a manageable number of partners (e.g. NGOs, community groups) and beneficiaries. These partnerships should go beyond one-off activities, perhaps running for multiple years. Most importantly, they should have a relentless focus on building capacity and transitioning the partners and beneficiaries towards self-sufficiency. It is important to note that these groups often don’t know what they really need, so it may be up to you to help them figure it out. There may be more impactful ways for your company to help than writing a cheque!
Look beyond financial contributions – Financial contributions are the ‘go to’ CSR mechanism for many companies in Trinidad and Tobago. Less common, but still used are in-kind donations, employee volunteering, or pro-bono and discounted services. Remember, your company’s resources are not just financial. They include your people’s skills, experiences and networks, equipment and materials, real estate, brand equity and influence, and relationships with customers and suppliers to name a few. Alternatively, you may choose take a more holistic view of CSR. This could manifest itself in the form of efforts to reduce the environmental impacts of your organization and its products or services, creating a truly diverse and inclusive workplace which celebrates difference and gives equal access and treatment to all, or by applying responsible procurement principles in the management of your supply chain.
Encourage employee volunteering – Trinidad & Tobago does not have a particularly strong culture of corporate volunteering when compared to countries like the US or UK. However, there are many ways to help create one in your organization. For example, by implementing a volunteering policy that allocates a set number of working hours each year for volunteering, including volunteering in performance objectives and reviews, or by recognising the professional development and staff engagement benefits of skills-based volunteering in particular.
Acting on the preceding points will help to speed up the evolution of your CSR programme. The tangible and intangible benefits of a strategic and well-structured approach to CSR comfortably outweigh their cost. The risk of losing these benefits and opening the door to competitors as the result of a knee jerk reaction are greater still.
This article was originally published in the Trinidad & Tobago Express Newspaper on 13th December 2017.