In my view...

Make responsibility part of the process

John Hancock, Investing in Social Responsibility and 1999 Ethical Investment Journalist of the Year

Maybe it’s the sort of people who pop up in the media to expound the ideas or maybe it’s how the ideas are understood but, for whatever reason, many businesses regard CSR at best as an irrelevance; at worst burdensome. That’s unfortunate. Because it leads those businesses to approach CSR as a box ticking ‘compliance with the rules’ exercise, to be handled in a way that interferes as little as possible with the core business objectives of growth and profit. And in approaching it in that reluctant and minimal manner, they risk being out of step with the market and missing business benefits that could be accessed by a different attitude to CSR.

Some of the world’s largest businesses have already realised the values that can be extracted from CSR. And, as is often the case, their far sightedness looks set to be rewarded in a market where regulations and attitudes towards responsible business processes are now among the significant forces shaping the future. Instead of a ‘box ticking’ approach, they integrate CSR into their business. The first step is usually a CSR audit of the organisation, its supply chain and customers. A CSR audit tells the management team more than they ever knew about their own business and its operating environment; information that can be applied not only to improve the business’s CSR standing but also to better understand the organisation and its markets.

In a knowledge-driven economy, the sort of information gained from a CSR audit is of immense commercial value because, by and large, better informed management teams make and implement better decisions. If CSR is treated as a burden, it will be burdensome; but, embraced as an informed approach to management; it can add financial value as well as supporting good corporate citizenship

Tesco's regulator dodging body swerve
Tim Kitchen – partner in Glasshouse Partnership and a director of AccountAbility the ethical think tank and CSR standards body

CRM and CSR. Beyond the linguistic overlap, what exactly do they have in common?

CSR has always been about corporate behaviour – appeasing shareholders and legislators and mischief-making NGOs? It’s about policies and reporting guidelines and tortuous assurance processes. De Beers’ inaugural stakeholder report, out this month, runs to 160-odd pages! But if you want to see how the world of CSR is changing, just ask Tesco. When Tesco announced its intention to provide environmental impact labelling on all its products, it set out on a road to what Glasshouse has called ‘product social responsibility’ (PSR) - empowering individual consumers to make informed purchase decisions based on their own individual ethics. PSR moves beyond traditional CSR and CRM agendas into transactional accountability.

By taking this leap, Tesco is acknowledging its own ethical footprint is a function of its whole value-chain, not just a set of senior management decisions. More importantly, it is actually acknowledging (in a delightful monopoly-popping, regulator-dodging body-swerve) that its ethical footprint is a function of consumers’ ethical choices. It is empowering its customers to share the responsibility for Tesco’s environmental impact. These customers are thus encouraged to embrace the other face of PSR – ‘personal social responsibility’. And it is in PSR – around carbon allowances and credits and road pricing, that the future battles will take place, and the money will be made.

Except, of course, that there is no direct correlation between purchase behaviour and Tesco’s supply-chain response – until you introduce three new systems:
1. A collaborative ERP platform that manages external resource impact up and down supply chains
2. An assurance system that provides detailed and trusted verification of ethical claims (ideally, to save cost, through some simple form of mutual authentication)
3. Most critically, the mother of all CRM systems – which Tesco just happens to have through its majority-owned data partner dunnhumby.

The closer Tesco gets to serving ‘segments of one’, the more directly it will make the twin manifestations of PSR come alive. The next step should be a buyer-centric response, beloved of marketing guru Alan Mitchell. Tesco empowered its customers to manage their own purchase data and gave them the tools to manage-down their biodiversity impact or their carbon cloud. CRM started by creating transactional data dumps, and has only more recently figured out how to use those to create value. CSR is creating a fully-fledged data mountain. CRM practitioners...get ready to dig.

Global CSR Lessons from Your Local Bank Manager
Frances Wells – director of FWA Associates and CSR specialist with Mutual Marketing

When it comes to maintaining a sustainable business there are good reasons why companies may wish to “think globally, but act locally” with CSR. On their local, ‘home front’ they will find two major areas of ‘responsibility’ that can engage and benefit a wide range of company stakeholders.

1. Recruiting, retaining and developing the best possible staff as the company’s key asset in a value-added market (particularly one where good customer relations pay dividends)
2. Actively putting something back into the host community where company offices and premises are located

These two strands of CSR are all the more beneficial for being mutually reinforcing. One of the most effective ways companies can make a valued contribution to a local community is by supporting positive change – for example, contributing to community renewal projects run by local not-for-profit partnerships. Rather than simply writing a cheque relevant staff can be involved, through volunteering schemes or management secondments. This opportunity for staff to tangibly make a difference to a local area brings a myriad of benefits; team building, skills development, innovation into the company, good local PR, and increased staff loyalty.

Companies typically recruit many of their staff from the local area. When staff and would-be recruits see clear demonstration of the company’s commitment to the locality their commitment and interest in the company rises too. Equally, the more that companies work with others to improve the image of an area the better recruits will be attracted to live and work there. Call centres have known this for some time.

To optimise the reinforcing effect of the two CSR strands, experience has taught that they should be conceived and organised in a strategic and highly consultative way. Crucially, they should be integrated into company strategy, including brand value development, market positioning and product and service innovation.

Many companies now engage in staff volunteering schemes with local charities and projects but they are frequently ad hoc and unrelated to the core identity of the company. At their worst these schemes are seen as cheap staff development with little real respect for building sustainable local communities. By contrast, the most successful are those wherethe staff themselves have:

• led on identifying their own development needs as an integral part of developing corporate strategy
• identified clear links between external partnering opportunities and company activities
• actively engaged the local community in designing and delivering the resulting partnering programmes

In the not so distant past and before CSR was fashionable, the local bank manager was tasked with integrating their ‘role’ into the community: to develop partnerships and knowledge of the local. This was deemed good business practice but ceased when banks focussed on bottom line costs and moved managers around. Interestingly, in these less personal times, bringing back the ‘local touch’ to corporate life will very likely prove to be an important part of more global success.