Corporate Social Responsibility (CSR) encompasses not only what organisations do with their profit but also examining how they make them. It goes way beyond philanthropy and mere compliance to understand how companies go about to manage their environmental, social and economic aspects - as well as their stakeholder relationships - whether that is through their workplace, supply chain, community engagements or so forth. With our highly globalised economy, it is imperative to adopt CSR programmes, in conjunction with other requirements of ‘scaling up’.
Therefore, CSR has been intrinsically linked to corporate risk management through mapping out current and potential risks and offering solutions to effectively counteract them. The key to this remains in continuing to effectively manage stakeholder engagement.
Governance, reputation and ethics remain at the forefront of the numerous issues associated with CSR that have made it to the headlines recently. Examples include shareholder activism, supply chain issues, forced labour, illegal workers, financial scandals, false accounting and the list goes on and on.
Even if you worked tirelessly to optimise the social and environmental effects of your business, you still need to always consider the following:
Fostering transparency - this has always been the most important factor and should always be at the top of the business agenda. Whether externally or internally, transparency will take a new form as publicly available assets - mandatory disclosed governance, social, and environmental data should now be available along with a life-cycle impact level analysis.
Having a clear-cut social purpose and integrating it operationally. This wouldn’t eliminate the risk of being put under the spotlight for previous actions in the past but it will lay the foundation for ensuring that every aspect of the business is conducted in an ethical and responsible manner.
Identifying and engaging with advocacy and special interest groups. As part of a stakeholder engagement plan, you can give them the opportunity to examine different aspects of your business. Developing specific channels for different stakeholders will be necessary to meet information needs and making it easier to make more accurate assessments of the organisations’ performance.
CSR has come a long way from being just an an ‘ad-hoc’ type of ‘damage control’ response by businesses. It is now a global movement that is holistic and proactive and the benefits of doing it right is increasingly apparent.
Executives at the world’s biggest companies, asset managers, CEO’s and even board of directors now recognise that CSR and sustainability can no longer can be ‘compartmentalised’ in a specialist department. Instead of just having a ‘second-class’ citizenship status in the organisation; material environmental, social, and governance issues are now being factored into corporate and investment strategies.
Therefore, we will be introducing a ‘CSR & Crisis Management’ series to showcase different case studies of international companies that have faced major crises and how they recovered from them through strategic CSR implementation. The aim behind this is to have all employees to start thinking of more ways to integrate CSR into their specific functional areas and having proper future forecasting that creates a rational to mitigate risks. Stay tuned for further insights.