In the must-haves for a successful Corporate Social Responsibility (CSR) program to yield a desirable Return on Investment (ROI), I consider the “holy trinity” of CSR components to be that the program is Strategic, Integrated, and Authentic. In many ways, authenticity is perhaps the most important of the three for while a CSR program can lack strategy and may stand-alone without integration, and still experience some modicum of success, the entire program will fall apart if it is revealed as anything less than truly authentic. Employees will become disillusioned, the communities that your company impacts will turn against you, and the media might very well eviscerate you, causing tremendous loss of profit or market share (see the recent falls from grace of Wells Fargo, Volkswagen, and Uber).
As I discussed last week, authentic employee engagement can yield tremendous benefits in attracting talent and in reducing turnover, absenteeism, and employee theft. Authentic community engagement can go a long way in creating mutually-beneficial partnerships with those most directly impacted by your company. Now, I’d like to focus on the other two pillars of CSR, creating authentic sustainability and corporate philanthropy programs.
The jury is out. People want companies to “go green.” In fact, Millennials demand it. But, what exactly does that mean as far as constructing an authentic sustainability plan? I suggest that any company that is undertaking minimal amounts of sustainability for “show” or merely to cut some expenses in the budget, is doing it wrong. The companies that are most successful and that see the greatest returns in the market place, as well as to the balance sheet, are the ones that authentically strive to be industry leaders in sustainability. Understandably, smaller and startup companies are not likely to have the capital to put into a green building construction project, but there are a variety of ways that you can authentically build your sustainability program. When viewing sustainability, it should always be a 360-degree approach to all stakeholders, internally and externally. This might sound like a lot of work to gain authenticity, but it will pay off in spades.
Let’s be clear. Simply having recycling containers around your office or putting up “Don’t Leave Me Turned On” stickers by light switches, might save a few dollars, but it won’t go far in the way of authenticity.
image: Sorana Secu
Let’s continue with our example from last week: Your company has a new food item going to market and you want to appeal to those consumers who specifically seek out healthier alternatives. How can you strategically integrate authenticity throughout your CSR program that may give you a competitive advantage?
For sustainability, the company will want to look at three elements: operations, ingredients, and externalities.
Operations: is your business generally operating in a sustainable manner? Do you have written operational procedures in place to ensure that you are creating, marketing, selling, and delivering your product in the most sustainable manner possible? Are your offices and your manufacturing facilities being operated as sustainable as possible when it comes to energy, water, and other resource usage? Areas to review for sustainability include electronics/computers, HVAC, lighting (natural and otherwise), plumbing, landscaping, printing/duplication, file management, onsite power generation, composting/food waste, etc.
Ingredients: Are you sourcing truly sustainable, natural, organic ingredients from the geographically closest sources available? Are you using sustainably harvested and fair trade ingredients? Are you limiting excess sugars, transfats, and processed materials? Packaging is also an extension of ingredients as far as minimization of materials that might not be compostable or recyclable or, worst case, harmful to human health (e.g., BPA liners). Could you use a biodegradable, wax-paper carton instead of a plastic tub? What are other, more sustainable ingredient alternatives or unique ways that you could package your product?
Externalities: What are your impacts on the planet from shipping your ingredients to production and distribution of your final product to market? Could it be produced in multiple locations to reduce greenhouse gas emissions/shipping costs? Are you operating your offices/manufacturing facilities as efficiently as is possible? Have you utilized “sustainable design” techniques in developing your business as well as production of your product?
The final, and most important element of authenticity concerning sustainability is to make sure that you are measuring your results and reporting them. There are lots of ways to do this using the International Organization for Standardization (ISO), the Global Reporting Initiative (GRI), the UN Sustainable Development Goals, but perhaps the easiest and least expensive one is using the B Corp B Impact Assessment. The B Impact Assessment is a free application from B Lab. It will enable your company to identify your strengths, challenges, and areas for improvement when it comes to sustainability and, in the process, provide you with an industry comparison to similarly-situated businesses.
Again, nobody expects a new business to take on all of this at once, but having a comprehensive, strategic, and integrated plan will go a long way to demonstrate your authentic commitment to sustainability to all of your stakeholders.
An authentic corporate philanthropy plan is not one that simply gives money away to the founder’s favorite charities, but rather is one that authentically addresses impacted communities’ needs, as well as employee engagement strategies. To that end, it’s always best to identify groups who may be negatively impacted by the production process and/or are proximate to the company’s headquarters. Rather than just giving money or product away to those communities, authentic corporate philanthropy meets the community where it is and is an on-going discussion, providing the help that the community actually desires. It must not be a one-time action that may be viewed as a publicity stunt or a way to simply ameliorate a PR problem. It should be a story that is connected to your business and that can be conveyed in an easily understandable message to the community and your workers. An authentic corporate philanthropy strategy should be thought out, defining how the funds will be allocated, the boundaries around and requirements for fulfillment, and, ideally, the expectations regarding use for the funds and metrics for measuring success. The more that the corporate philanthropy program is designed, the more authentic (and successful) it will be.
As I stated, there should be a “story” that connects the philanthropy to the business itself. Years ago, the nonprofit I founded was the recipient of a large sum of money from Major League Baseball. While it was great to receive the funds and fun to get the picture taken with the oversized check, the fact is that there was zero connection between MLB and the organization. None. How authentic did that look to the media or to the league? I suggest that it didn’t look authentic at all and that the return on investment in that exercise was negligible for MLB.
Authenticity is the secret sauce of CSR plans because it ties directly to an emotional feeling that all stakeholders desire to have. When done well, authenticity leaves all with a positive feeling about the company and the products they produce. When done poorly, it can undermine the entire CSR program. The businesses that implement successful CSR programs do so in a way that is not only strategically integrated and makes business sense, but do so in a way that is authentic. And it is authenticity that elevates the plan into a social imperative that is compelling for communities, employees, and customers.