Here is why you need to take social responsibility seriously

On April 1, 2014, the new Companies Act, 2013 came into force—and India became the first country to legally require companies to “give back” to society.

On April 1, 2015, the government will start finding out if any of that actually happened, and if not, why not, as the legal reporting framework requires.

The law made it mandatory for companies that have an annual turnover greater than Rs1,000 crore, or net worth greater than Rs500 crore, or net profit greater than Rs5 crore, to spend 2% of their three-year average annual net profit on corporate social responsibility (CSR) activities starting last year.

But Indian companies largely spent 2014 awaiting regulatory clarity on several unclear provisions in the law, while also preparing to comply.

 CSR is actually much more exciting than all this regulatory talk. 

Critics argue mandatory CSR is oxymoronic, and a bad idea at a time when economic growth driven by the private sector has been ostensibly pulling millions out of poverty.

Moreover, they add, India’s inherent government corruption and “tick box” tokenistic compliance behaviour could make it nearly impossible for CSR to have substantial positive social impact.

Now there is speculation that the Narendra Modi government’s move towards improving ease-of-business might do away with the 2% requirement, but the Companies Amendment Bill 2014 passed by the Lok Sabha late last year doesn’t officially seem to deal with this (pdf).

Nonetheless, minister of state for finance, Jayant Sinha, last month recommended that corporates engage in CSR. And, although the CSR clause might eventually be watered down for ease-of-business reasons, it is very unlikely to be removed entirely. 

But CSR is actually much more exciting than all this regulatory talk.

As economic growth gets back on track—and if as expected the next decade produces unprecedented corporate successes in India—the size and scale of CSR will expand since it is effectively a proportion of corporate profits.

Which brings us to a key question: Whether compliance-driven or responsibility-driven, can CSR be transformational in India?

Organising force

In 2009, India had 3.3 million non-governmental organisations (NGOs), about one for every 400 Indians.

Most are tiny organizations that deal with specific local issues. And while the social sector in India is recognized for its big heart and solid commitment to social justice, it is equally well known for lacking professionalism, efficiency, transparency and accountability.

 CSR can bring fresh life into this situation and unlock the sector’s value by organizing it. 

NGO leaders will typically treat these traits as good-to-haves, but lack the resources—and often, the will—to implement them. That’s understandable. Consulting firms offer pro-bono consulting services for NGOs, but that too has limited impact.

Larger companies start their own foundations or NGOs in the hope of both doing good and being seen as such, but often end up creating somewhat professional but tiny silos, having little impact in organising the sector as a whole.

But if the social sector remains unorganised, much of its value will remain untapped. And that significantly reduces possible mission-level benefits for both NGOs and government institutions, and the communities they wish to serve.

CSR can bring fresh life into this situation and unlock the sector’s value by organizing it.

CSR funds can be used to create and run high-impact, transparent NGO projects. These high efficiency, technology-driven projects—co-created by corporate donors, NGOs, research organisations and local government agencies—can be transformational in their legitimacy, reach, funding, impact and sustainability.

To ensure maximum impact for every rupee spent, these projects can aim to improve the implementation of often flawed and leaky government programmes, and help create sustainable livelihoods.

Under the law, CSR funds are directly proportional to corporate profits, which are driven by market forces. Therefore well-managed collective CSR efforts will effectively create an elaborate, market-led NGO performance measurement standard, without any added government regulation or cost.

Through this, NGOs get to have social impact; companies enjoy impact and branding; the government receives help in development works; research organisations get access to subjects and data; and, most importantly, the served communities benefit tremendously.

In India, it would be a near miracle if all these happen as described, but the larger point is that CSR does have the potential to create and administer effective development projects. 

Philanthropy and government 

The past half-a-century of proliferating NGO activity has certainly done some degree of good for India’s poor and marginalized, but it has also added to government jadedness at the local level, by opening up what is often called a parallel development sector.

NGOs feel they are filling in for governments that aren’t doing their part. Unfortunately very often they have been right. But NGOs are often just as ineffective themselves. Companies doing CSR can change that by incentivising both sides to work together.

The central government’s many flagship schemes for the urban and rural poor need a lot of professional deployment assistance from the outside. Assistance coming from CSR-funded, professional NGO projects can improve the effectiveness of such programmes significantly.

Teams of consultants, development practitioners, researchers, academics and technologists, hired by think tanks that are funded by CSR money, could provide a major boost on the ground.

These experts can help local NGOs and government bodies implement programmes with precision and speed towards pre-negotiated common goals. If it is done right, such a controlled operation will likely demonstrate on-going positive development impact.

But that’s only a good idea. If not executed professionally, this can fall by the wayside just as easily.

Incentivise companies

A third way CSR funds can be transformative is if companies understand the real marketing, communications and brand value in properly executed CSR projects. This is not a novel idea, but it hasn’t been done right—yet.

Just about every new study on perceptions of business responsibility reveals that today’s consumers—including in India—aredisproportionately more willing to buy from companies perceived as “caring” for people, communities and social issues.

 CSR funds spent in the right places can easily qualify as marketing funds. 

Unfortunately, what we currently have is a large numbers of companies engaging in “feel good,” mostly pseudo-philanthropic marketing campaigns.

Some of it may be going viral now but these trends will be gone in five years. Instead, what will last is real concern, real care and real impact on the ground—all communicated well.

CSR funds spent in the right places can easily qualify as marketing funds, and if sufficient numbers of Indian companies begin to see this, it can result in significant cost savings and social impact for companies.

And that’ll help the bottom-line.

You can follow Ravi at @ravinarain. We welcome your comments at ideas.india@qz.com.

Lesson from four villages: Manage waste, earn money

GURGAON: A waste management project in four Gurgaon villages - Hassanpur, Nawada Fatehpur, Kankrola and Dabaripur - has become a source of income for the villagers. 

Known as "Kachre se Kamai" (income from waste), the project started about six months ago, with the aim to help villagers manage their waste and generate employment opportunities in the area. The villagers say an amount of over Rs 5,085 is generated by each village in one month, which is deposited in their panchayat fund, to be used for the area's development. 

The garbage is brought on carts to the waste management system in the village, and then segregated. Biodegradable waste is collected daily and disposed off by either composting or feeding to cattle. The compost is sold to villagers by the panchayat at subsidized rates. 

The panchayat gives villagers some amount as sanitation fee, which gives them a sense of ownership and makes them eager participants in the project. "I don't have to leave my family and go out to seek employment. Compositing is quite simple. I learnt it quickly and began working on the project," Ratan Yadav, a resident of Hassanpur village, said. 

"Most of the waste collected from the 312 households is recycled or turned into manure, which is sold. An amount of Rs 24,085 is generated per month," said Mewa Devi, sarpanch of Kakrola village. 

The project has been carried out by DLF Foundation. The foundation provides two personnel and one cart in every village to collect garbage from door-to-door. The project was implemented in phases to ensure sustainability and developing a self-sufficient model. The foundation managed the project for about five months and then the ownership was given to Panchayats. 

The project was initially implemented by DLF Foundation. It provided two persons and one cart to every village, to collect garbage door-to-door. The project was implemented in phases to ensure sustainability and for developing a self-sufficient model. The foundation managed it for about five months and then gave the ownership to panchayats. 

Known as "Kachre se Kamai" (income from waste), the project started about six months ago, with an aim to help villagers manage their waste and generate employment opportunities in rural areas. According to villagers, an amount of over INR 5085 is generated by each village in one month. The amount is deposited in the Panchayat Fund, to be used for development of the area. 

Garbage collection carts bring the waste to the waste management center in the village, where waste is segregated. Biodegradable waste is collected on a daily basis and disposed by either composting or feeding it off to cattle. The compost collected is given to the villagers by the Panchayat at subsidized rates. 

Villagers are getting some amount as sanitation fee by the village Panchayat. It gives them a sense of ownership and obliges them to participate in the project. Ask Ratan Yadav, a resident of Hassanpur Village. "I don't have to go out to seek employment leaving my family. The process of compositing is quite simple. I learnt it in a short span of time and started working with on the project," he said. 

"80 per cent of the waste collected from the 312 households is recycled or turned into manure which is then sold and an amount of INR 24085 per month is generated, informed Mewa Devi, Sarpanch of Kakrola Village. 

The foundation provides two personnel and one cart in every village to collect garbage from door-to-door. The project was implemented in phases to ensure sustainability and developing a self-sufficient model. The foundation managed the project for about five months and then the ownership was given to Panchayats. 

So far, the programme has been successful is providing employment to the youth, beautification of villages and providing better living conditions in rural areas. The foundation plans to take the project to other parts of the country soon.

90% of Americans more likely to trust brands that back social causes

This Bar Saves Lives is a for-profit company that makes fair-trade, GMO-free snacks that help provide life-saving food to children in need.

BY MATT PETRONZIO4 DAYS AGO

If your brand doesn't support social causes, it's missing out on a huge audience.

Consumers don't just like when companies incorporate social good into their business models — they've come to expect it, whether it's through corporate social responsibility (CSR), cause marketing or "good" content. In fact, 90% of Americans say they're more likely to trust and stay loyal to companies that actively try to make a difference.

Studies also show that 88% of consumers would buy a product with a social or environmental benefit, and a surprising 84% would tell friends and family about a company's CSR efforts.

Brands can tap into this consumer base through original content and social media. After all, 64% of millennials use social media to address companies about social and environmental issues, and 36% of consumers say they mainly share content to promote the causes they care about.

But your company needs to be genuine. Don't underestimate your consumers' intelligence by simply jumping on this bandwagon. "Causewashing" is a serious issue, and odds are your consumers will smell it a mile away.

Check out Column Five's infographic below to learn more about how your brand can create "good" content responsibly and effectively.

IMAGE: COLUMN FIVE

When a Company Truly Cares

Canadian companies profit when charity is more than just good PR

By Justina Reichel, Epoch Times | January 8, 2015

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Over the past decade, a growing trend has been quietly revolutionizing corporate culture in Canada.

It is characterized by various buzzwords: corporate social engagement, community investment, creating shared value, etc. Put simply, it is the mysterious magic that happens when companies align their core values and business strategy with engaged and meaningful philanthropy.

Corporate social responsibility expert Peggie Pelosi is a major force behind this trend in Canada. She first stumbled on the idea in 2000 when she was hired to turn sales around for struggling American health and nutrition company USANA.

People are fundamentally hardwired to want to help.
, founder of ORENDA— Peggie Pelosi

In an effort to inspire the company and its employees, Pelosi created a partnership between USANA and the Children’s Hunger Fund, a non-profit that works to find sustainable solutions to hunger in both the developing world and communities in the U.S. Employees were given the opportunity to volunteer or fundraise for the non-profit, and overseas trips to the impacted communities were organized.

The next few years brought staggering results. Not only did company-wide contributions to the charity grow 10-fold, sales increased dramatically resulting in a 3,000 percent increase in USANA’s share value.“The product was really the same, the people, the marketing, the pricing—none of that had changed. What had changed was the corporate culture,” remembers Pelosi. “We had created a very inspiring workplace.”

The experience was a watershed moment. Pelosi realized that rather than simply writing cheques to charities, if employers could strategically align corporate responsibility with their core values, while engaging their staff in a meaningful cause, it could be enormously profitable. Pelosi soon returned to Canada and founded ORENDA, a corporate social responsibility consultancy firm that teaches employers how to do just that.

“In the 10 years that I’ve been doing this it has really risen to the forefront of priorities for businesses,” says Pelosi. “It’s evolved dramatically.”

In recent years, companies have started to strive to make a deeper, more focused impact on society that aligns with their brand. This is a major corporate philanthropy trend, according to the Committee Encouraging Corporate Philanthropy (CECP), a coalition founded by the late actor/director Paul Newman which holds that societal improvement is an essential measure of business performance.

Employee engagement in charitable acts and non-cash donations of human and material resources are also on the rise, says the CECP.

This shift in strategy is driven by a variety of factors, Pelosi says. Customers are demanding more from companies, and choose businesses that align with their personal values. Millennials entering the work force are highly socially conscious and future-minded, and often choose to work for companies that contribute positively to the world.

Businesses are also eager to make a noticeable impact and leverage their philanthropic efforts. If they do it right, engaging with charities they deeply believe in, they can also avoid the appearance of insincerity and bandwagoning, such as with the proliferation of greenwashing or one-off cause marketing.

Boston Pizza’s Experience

Boston Pizza’s change in strategy last year is a prime example of the shift toward more meaningful philanthropy.

For years the company raised millions for charity, giving large donations to the Heart and Stroke Foundation through their heart-shaped pizza campaigns.

But the message was fundamentally confusing and off-brand. Boston Pizza, largely known for its casual sports bar atmosphere and high-fat menu, was not exactly a health-oriented business model.

That’s when Boston Pizza Foundation executive director Cheryl Treliving (daughter of Dragons’ Den star and Boston Pizza owner Jim Treliving) called up Pelosi looking for help to devise a giving strategy that made sense.

As Pelosi worked with the company, they discovered that the restaurant chain had a long history of business mentorship through its franchises, and role modelling played a major part in its success. When they started researching charities that place emphasis on role modelling, the idea began to click into place.

Last year Boston Pizza Foundation launched its new “Future Prospects” campaign in a re-focused effort to support youth through mentoring in communities nationwide, many where Boston Pizza restaurants are located. They partnered with organizations like Big Brothers Big Sisters, Kids Help Phone, and other programs that support at-risk youth.

“We started seeing that by standing for a cause versus [donating to] one organization, we could actually have some real impact,” said Treliving. “It’s not just, ‘do we look good by presenting this big cheque,’ but ‘is the money that we’re using actually impacting and making the world a better place.'”

A year after the change more staff have joined the company’s charity efforts and customer feedback is very positive, Treliving says. Their most popular staff incentive prize has become an annual trip to the Dominican Republic to build homes for those in need in partnership with the charity Live Different—even more sought-after than cash or other prizes available to the staff, she notes.

Canadian Tire’s Jumpstart program, which subsidizes sports-related expenses for kids, and technology company Softchoice’s volunteer training and computer donation program are other successful examples of Canadian companies leading the way in meaningful, on-brand philanthropy, says Pelosi.

It’s also a trend that shows no signs of slowing, partly due to human nature but also to its profitability, she adds.

“People are fundamentally hardwired to want to help,” she says.

“When companies make this part of who they are and imbed it in their corporate culture it gives everybody the opportunity to reach out and have that experience that feels very good, of getting out of themselves and making a difference in their own communities. So it’s really, really good for business.”

2015 CSR Prediction : Doing the right thing becomes central to business, not a sideline

People with good hearts often do the most harm. I witnessed this firsthand about 20 years ago, when – after I’d already been helping to build responsible businesses, large and small, for some 20 years – I saw the creation of a special business focus called sustainability. Then came corporate citizenship and other labels.

The organizations I had worked to develop had never separated out – and, as a result, fragmented – the work of doing business responsibly. Responsibility was part of how they did everything, not a sideline. I think separating responsibility from business operations, while well-intended, ultimately caused setbacks.

But I finally see that well intended sidetrack reversing: 2015 is looking bright for responsible entrepreneurship. Three big shifts in particular that should give us hope:

1. Less counting, more caring

Until recently, most reporting, consulting and corporate programs have used metrics to leverage responsibility. Managers figure out a way to count everything, believing a metric is the golden ticket to getting things done. The misguided notion of “what you measure is what you get” has been the mantra for decades. I don’t think it’s true. My mantra is: “What you get is what you care about.”

Google, for instance, is making headway in changing our relationship with food. Instead of focusing on metrics, it’s finding ways to make people care about the impact of their food choices on farming, health and climate.

Via global dialogue and multidisciplinary projects, it aims to create food experiences and knowledge that brings those impacts to life in a more effective and powerful way than simply by sharing abstract numbers and statistics.

This approach has already born fruit: Google has set up its own community-supported agriculture deals directly with local farms in Northern California. If Google and other companies can get more people to care, that could make it possible to scale for organic farming, resulting in real systemic change.

2. Less copying, more innovating

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The sustainability movement unwittingly has borrowed many bad ideas from the traditional business world. Chief among them is the idea of “best practices.” Copying others’ practices has the tendency to commoditize the same approaches rather than creating unique ones that are relevant to each situation and business.

For example, most companies have separate programs and standards for goals such as water conservation, fair trade, green building, energy efficiency and more. But focusing on the individual numbers in each category isn’t enough to make a business create real change. Being a fair trade brand is a baseline for being a good business; not a differentiator.

What I hope to see more of in 2015 is the shifting of entire systems through innovation. I’m already seeing some signs this trend is growing: take Merida Meridian, a small US textile design company that has been changing the rug industry with unique designs and products that exceed sustainability and fair-trade standards.

The company creates healthier communities in places – such as Brazilian villages – where it sources woven, dyed materials. It supports the unique artisan skills that were being lost to commodity sourcing. And the designs themselves stand out: Merida Meridian is now considered a “go to” source for top interior designers around the world.

It would have missed all that commercial and social success if it had simply pursued the best practices in its industry. 

3. Fewer substitutions, more game changing

2014 may have been the year of the social enterprise , but many social enterprises operate on a small scale. If we want to see true progress, these companies will need to think bigger.

While most social ventures offer product substitutes for conscious consumers, they leave more than 97% of the market to more irresponsible options. Or they focus on solving a single problem rather than changing the system that produces the problem. Most, so far, haven’t been disruptive enough to change their whole industry. But that transformation, I hope, is coming.

Community Sourced Capital of Seattle, Washington, is changing the financial system that affects small business investing and local economic vitality in its area. In particular, it’s taking on the impersonal relationships banks often have with their communities.

Here’s how it works: local residents make interest-free loans to local CSC-member businesses – which are vetted by CSC – to buy equipment and grow. The investors are investing in the neighborhood, as well as the business. They are deeply connected to the neighborhood businesses and care if it is succeeds. CSC is changing both an industry and a social system.

If more social enterprises find innovative ways to change systems, they could end up doing far more good.

Carol Sanford is an educator who has worked with companies such as DuPont, Procter & Gamble, Seventh Generation and Google. She is also the author of The Responsible Entrepreneur: Four Game-Changing Archetypes for Founders, Leaders, and Impact Investors.

Eight CSR Trends to Watch Out For in 2015

Eight CSR Trends to Watch Out For in 2015

Corporate Social Responsibility IS The New Norm.

From Giving Tuesday to the Ice Bucket Challenge to Climate Week NYC, 2014 brought plenty of opportunities for companies to get creative with their corporate social responsibility initiatives and experiment with new types of engagement. As a whole, the corporate social responsibility industry continued to gain traction this year, with social impact increasingly making its way in to the C-Suite and transparency becoming the new norm. With 2015 just hours away, we asked industry experts to share their top CSR trends from 2014 as well as their predictions for the new year.   

Rich data and communication technology enables companies to solve social and environmental problems at scale.

“I strongly believe that in a world where increasingly smart devices deliver rich data and communicate with each other to exchange information and knowledge, we have a powerful new way to unite people and drive solutions that truly solve some of the biggest social and environmental issues around the globe.” - Gabi Zedlmayer, Chief Progress Officer, HP Worldwide (@GabiZed)

Diversifying the C-Suite helps companies reach their full potential to solve global problems.  Diversifying management will also drive success.

“The most successful companies in the 21st century will be led by boards of directors comprised of people with diverse backgrounds, perspectives, and areas of experience and expertise, who can envision the company’s greatest potential in solving the world’s most compelling social, environmental, and economic challenges.” – Alice Korngold, Consultant and Author of “A Better World, Inc.” (@alicekorngold)

Companies step up to tackle human rights issues domestically and globally.

“2014 saw human rights continue to climb up the business agenda, which will no doubt continue next year. President Obama announced that the U.S. would develop a National Action Plan on business and human rights; over 2000 people attended the United Nations Annual Forum on Business & Human Rights in Geneva; and the U.N. Human Rights Council agreed to explore the feasibility of a legally binding treaty for corporate human rights responsibilities. Companies not already getting their collective heads around their human rights responsibilities would do well to get on board!” – Christine Bader, author of “The Evolution of a Corporate Idealist: When Girl Meets Oil” (@christinebader) 

Corporate responsibility becomes an absolute mandate.

“One of the most compelling trends CECP (The Committee Encouraging Corporate Philanthropy) sees globally is the move by countries and regions to mandate certain aspects of corporate societal engagement. Companies with a current or growing multinational footprint need to understand this evolving landscape to inform their societal investment strategy and support compliance. Some emerging markets, including Brazil and Indonesia, have regulations that determine a specific level or type of corporate societal investment, similar to India’s new ‘2 percent’ CSR requirement. In Europe the mandate trend is seen in a requirement on non-financial disclosure and reporting. CECP has resources to help companies learn more about this topic, addressed in greater detail in the free Giving Around the Globe report.” – Margaret Coady, Executive Director, CECP (@MargaretCoady)

Initiatives focused on empowering women and girls gain traction. 

“One of the trends we saw in 2014 was continued traction and collaboration around CSR programs and multi-stakeholder initiatives to advance the economic empowerment of girls and women – from education and technology access programs, to job-skills and supply chain diversity initiatives.” - Suzanne Fallender, Director, Global Girls and Women Initiative at Intel INTC -1.1% (@sfallender)

Social impact makes its way to the resume and becomes a calling card.

“In 2014, we saw a powerful trend start to emerge among our employees and the members on the LinkedIn network with people wanting to volunteer their skills to make a positive impact.  To date, more than 3.5mm LinkedIn members have signaled on their profile that they want to serve on a nonprofit board or use their skills to volunteer.  We expect to see that number rise dramatically in the new year as more people are making social impact part of their professional identity and looking for ways to find purpose at work.” – Meg Garlinghouse, Head of Social Impact, LinkedIn(@megarling)

Climate change and measurement climb to the top of the agenda. 

“I think the big trends will focus on climate change and measurement.  More specifically, I think (and am hopeful!) that you will see more countries, socially prominent leaders (from movie stars to CEOs), and corporations step up to this challenge and/or address it publically for the first time.  I think the agreement between China and the U.S. this year (WAY late in coming) is a wake-up call for all.  On measurement, I think this  coming year holds promise on companies moving forward with how we measure the sustainability value and footprint of our products, hopefully moving towards a more consistent, reliable method.”- Trisa Thompson, Chief Sustainability Officer, Dell (@TrisaDellCRO)

The language around CSR is changing–for good reason.

“Over the years, there has been a noticeable, side-stepping away from the term ‘CSR.’  Part of this is due to the negative associations it sometimes provokes. So-called ‘green- or ethics-washing,’ and real challenges to CSR as an authentic trade. This search for new language reflects our new expectations of what it means for a company to be socially responsible. In our information-rich, media savvy environment, there is no one-off philanthropic initiative that can distract from an utter lack of sustainability or responsibility in the core business operation.” – Denielle Sachs, Director of Social Impact, McKinsey (@dano129)

There’s no question that 2014 brought a great deal of progress on the CSR front—and that there’s even more in store for 2015. According to Dave Stangis (@davestangis), vice president of CSR and Sustainability for the Campbell Soup Company, “Corporate responsibility will continue to move up the hierarchy.” As Dave put it, CSR isn’t just becoming part of the CEO and board agenda; it is the CEO and board agenda.

So get ready, CSR fans, because 2015 is bound to be a formative and thrilling year for our space. We’ll see the tenets and practice continue to spread through corporate enterprises and touch each and every employee, stakeholder, investor and hopefully customer in the year(s) ahead.

How Companies Can Become More Socially Responsible in 2015

This article is by Paul Klein, founder and president of Impakt.

In a recent article I co-wrote with Milinda Martin, In the Future, Companies Will Only Survive if They Help Solve Big Social Problems, we predicted that “2015 will mark the beginning of a long-term transition of the role and purpose of the world’s largest public companies and the value chains they control” and suggested that “the new imperative for business leaders will be to embrace the idea that the viability of their businesses depends on solving the world’s most pressing societal issues.”

The vision for the future we illustrated was based on input from corporate leaders who have observed that most of the ways in which businesses currently contribute to social change aren’t very effective for companies or communities. We suggested that in the years ahead leading businesses would abandon tokenistic corporate social responsibility, commit to bold social goals, and integrate social change in all aspects of their operations.

In responding to comments from readers, I realized that we missed an opportunity to help corporations become more effective agents of social change by providing specific ideas for what they should start to do differently in 2015. So here are seven ideas to help executives move their businesses towards a more compelling long-term vision and improve their performance in 2015.

1. Pick a big issue, declare a clear goal, and mobilize your resources. Corporations become successful because they identify problems, allocate resources to uncover and deliver solutions, and are accountable for what happens. The role of business in social change should be no different. Tyson Foods, one of the world’s largest producers of meat and poultry, has a social goal of ending hunger. Through its KNOW Hunger program, Tyson donates to food banks and increases awareness of hunger issues on a large scale. At the end of 2010, Tyson had donated 78 million pounds of protein—enough to serve one meal to every American citizen.

2. Make more effort to engage the millennials in your workforce. Employees of this generation want to be rewarded in ways that go beyond compensation and expect their employers to support their interest in social change. These employees also want to apply what they know to issues that they’re passionate about. This means reduce or eliminating activities that have employees doing menial tasks that don’t contribute to measurable social outcomes. For more about this, refer to MSLGroup’s excellent report, The Future of Business Citizenship.

3. Engage your naysayers. Corporations that include the perspectives of advocacy organizations create opportunities to make meaningful changes. “Nestlé has been engaging much more systematically with stakeholders, even constructively critical ones, to ask them what they expect of us,” said Paul Bakus, that company’s president of corporate affairs, in a recentForbes.com interview. “This has led to the development of 35 forward-looking commitments covering every area of our business—nutrition, water, rural development, sustainability, and compliance.”

4. Begin to allocate some of your company’s philanthropic giving to social purpose businesses and/or social enterprises. This will establish a base of social investment the results of which can be quantified while you preserve philanthropic commitments that are meaningful to employees and stakeholders. Based on 2013 figures from the Giving USA Foundation, reducing philanthropic contributions by approximately 50% of what they are today would create an annual pool of social finance capital of approximately $8 billion in the U.S. alone.

5. Ensure that all strategic investments in social issues include credible ways of measuring and evaluating performance. No significant use of business capital is made without a way to assess its value, and social investments shouldn’t be an exception. In some cases, this may mean increasing or changing your support to give your social partners more capacity in the area. In others, it could mean reducing support for organizations that don’t have clear plans to solve specific social issues, or don’t show interest in measuring the results of their work.

6. Reduce cost and improve efficiency. Eliminate separate corporate social responsibility reporting. This has been widely discussed for the last few years but remains a staple of CSR communications, despite its high cost and low value. (For more about this, read “What Gets the Worst Marketing ROI? Your Corporate Social Responsibility Report,” inAdvertising Age.) You can also increase internal capacity by only requiring charities that receive major support to submit accounts of how charitable funds are used. Nonprofit organizations spend too much time preparing these reports, and corporations spend too much time reading them.

7. Be disruptive. Oil and gas companies could begin transforming some of their stations into local centers of sustainable transportation. Banks could start crowdsourcing platforms to help social entrepreneurs access capital. Grocery retailers could help stimulate local agriculture and provide consumers with healthy food choices by hosting famers markets. What can your company do to be disruptive in 2015?

My advice is think about these ideas in January and write a media release dated December 31, 2015, outlining your company’s vision for the future and what you’ve done during the year to bring that vision to life

CSR is crucial to sustainable growth

 ‘CSR is crucial to sustainable growth’[Herald Interview] 

Published : 2015-01-01 20:51
Updated : 2015-01-01 20:55

Korean companies need to take a strategic approach to their corporate social responsibility-related activities to link them to sustainable growth for the company, the head of a global CSR strategy consultancy said.

“CSR is not a matter of how enterprises spend their money. It’s about how they earn money,” Lee Yoon-suk, founder and CEO of InnoCSR Group, said in a recent interview with The Korea Herald.

Lee, 36, emphasized the high correlation between a company’s CSR and sustainable growth.

“Companies should integrate every strategic pillar of CSR ― social, environmental, human rights and consumer concerns ― into their business operations and core strategy,” Lee said.

Established in 2008, InnoCSR Group has been operating as a global CSR strategy consulting firm, initially focusing on Northeast Asia ― China, Japan and Korea. Currently, the company has three offices, in Shanghai, Seoul and Manila.

InnoCSR Group CEO Lee Yoon-suk. (Chung Hee-cho/The Korea Herald)

The consulting firm advises some 20 enterprises a year on CSR-related strategies and more than 80 percent of these are Fortune 50 corporations, according to the CEO.

Lee, who dealt with corporate partnerships and corporate engagements at the United Nations Children’s Fund, or UNICEF, found “a great mindset gap of what corporates and nongovernmental organizations think corporate social responsibility is.”

“I thought I could set up a company that plays a role as a bridge between them,” he said.

Lee warned that a companys’ management should change the way they regard social responsibility activities as an “extra cost.”

“If the companies spend a bottomless pit of money on CSR programs and events, they could be caught in their own trap of philanthropy,” Lee said.

For that reason, InnoCSR will focus on consulting companies to implement ISO 26000, guidelines for social responsibility launched by the International Organization for Standardization in 2010.

The guideline aims to contribute to global sustainable development, by encouraging business and other organizations to practice social responsibility to improve their impact on their workers, their natural surroundings and their communities.

“The comprehensive standard enables large conglomerates to save their budget on CRS audits and reforming or creating their own codes of ethics while subcontractors just need to comply with the global standard without adopting different kinds of systems from various buyers,” Lee said.

To gain stronger footholds, the group will further give an impetus to its subsidiaries Inno Global Institute, which concentrates on education, research and consulting activities, and Wegoodit, a social media and e-commerce platform connecting brands, NGOs and consumers, he added.

By Park Han-na (hnpark@heraldcorp.com)