We need more strategic, value-creating focus and less focus on defensive, compliance measures.
CSR = Risk Mitigation and/or Value Creation. Full Stop.
Companies the world over are recognizing that there are growing societal expectations on the social value added aspects of business of all types.
Firms everywhere are adapting and evolving, searching for ways to meet societal expectations and meet shareholder expectations. Some are finding value-creating synergies and ways to create more value for society and for shareholders at the same time.
Others end up in more of a zero-sum, value transfer type of approach (see the CSR Value Continuum for more on value-transfer/value-creation).
At the same time there is a rapidly growing and evolving set of global standards, reporting mechanisms and general compliance frameworks.
Many companies, far too many in my opinion, are paying inordinate amounts of attention to the compliance aspect of CSR and far too little to the value-creation potential that can come with creatively finding synergy and value-alignment.
This not only limits the value that can be created for society AND shareholders, but also serves to position CSR in a ghettoized corner, far removed from core value-creation functions and prone to be first in line when budget crunch happens (see CSR in Budget Crunch Times).
I just received an email from a friend who has developed a technology/system that has the potential to be transformative in terms of rural child education in remote and impoverished areas.
They reached out to the CSR Managers/Leaders of 500 companies working in this area to suggest that there could be some synergy with the social license/social value.
Not one responded! Follow-up phone calls suggested that the many (they said most) saw CSR as a defence mechanism and that strategic, creative, value-creation types of approaches are last resorts, to be deployed in times of crisis.
Strategic, creative, value-creation types of approaches that seek to find and develop alignment between societal and shareholder interests, and involve other stakeholders and partners, have been proven to be doable, affordable and less difficult than most believe.
Yet so many still default to defensive, compliance-focused, value-transferring (value-draining) sorts of approaches. There needs to be a balance, and a balance that allows strategy and innovation to systematically drive value creation through CSR programs and activities.
A veteran of 20+ years of award winning CSR and sustainability work, Wayne Dunn is President & Founder of the CSR Training Institute and Professor of Practice in CSR at McGill. He’s a Stanford University Sloan Fellow with a M.Sc. in Management from Stanford University Graduate School of Business. He develops and delivers training programs worldwide and consults on strategy, economics and operations to industry, government and international organizations. His work has won major international awards and has been used extensively as ‘best-practice’ by industry and academia, including being made into a Stanford Business School Case Study.