Corporate social responsibility (or corporate social responsibility, CSR) refers to a form of management in which decision-making – ideally at all levels – takes into consideration the impact of the organisation’s activity on its environment, seeking to ensure that this impact is positive or, in the most conservative scenario, not negative for all its stakeholders;
When we talk about CSR we always take into account the 3 dimensions in which a company should measure its performance: economic, social and environmental; All these dimensions are interrelated and essential to ensure that an organisation’s strategy is holistic and healthy;
For example, if the entity makes decisions that aim to maximise its profitability by reducing operating costs that imply a high level of environmental pollution, or worse conditions for its workers, it is not applying the principles of social responsibility;
Basic principles of CSR
It all starts with good intentions, but as the concept and, above all, the importance of corporate social responsibility becomes more widely adopted, common parameters are needed to give it the corresponding seriousness as a management strategy in as many companies as possible;
In this way, guidelines and standards have been developed that provide clarity, not only to companies, but also to those who evaluate the information they communicate regarding their social responsibility policies; This is the case of ISO 26000, an international standard that offers a guide of good practices and recommendations for the correct implementation of a CSR strategy;
The seven fundamental principles of corporate social responsibility
According to this rule, theseven fundamental principles of socially responsible behaviour are:
- Accountability
- Transparency
- Ethical behaviour
- Respect for stakeholders interests
- Respect for legality
- Respect for international standards of conduct;
- Respect for human rights
In short, the basic principles of corporate social responsibility have to do with observing respectful behaviour towards all groups that are directly or indirectly affected by an organisation’s activity;
This might be taken as a truism, but in reality such codes of behaviour are necessary to prevent the relentless pursuit of profit maximisation from overshadowing collective welfare, equity, social justice and environmental protection;
But how is Corporate Social Responsibility measured?
As crude as this question may sound, it is the expectation that there is only one concrete answer; There are infinite variables, perspectives, realities, methodologies… in which CSR can be applied and be considered ‘effective’;
However, many companies have fallen prey to the much talked-about greenwashing -and others like pinkwashing or whitewashingThis is image-washing that wants to make people believe that a company is sustainable simply by implementing a measure or launching a superficial campaign, which in reality becomes a marketing strategy and not a real factor of transformation within the organisation;
CSR norms and standards
It is in this sense that governments, international organizations, academics and many other institutions, interested in a real commitment and accountability, especially from large corporations, have been shaping regulations and standards that accelerate the process of formalising the incorporation of CSR in companies.
An example of regulation in Spain is the Non-financial reporting law, which is applicable to entities with more than 250 employees (in addition to other conditions) which, in turn, is based on the GRI standards as a reference for organising the type of information to be reported, although other types of standards, such as SASB, can be applied later;
Reflection and decision-making on corporate social responsibility
Specifically, the idea is that each company should reflect deeply on its impact on its environment and set goals for improvement in order to become transforming agents of the society in which it operates, without forgetting that for a business to survive it must be profitable;
There are different factors to analyse in order to better understand what kind of decisions need to be made:
- What is the size of the organisation?
- In which sector are you active?
- What regulations apply to the industry of which it is a part?
- Do you operate on national or international territory?
- Who is the industry benchmark for CSR?
- Etc.
CSR: what is our starting point?
This starting point opens the way to a materiality analysis that allows distinguishing which are the critical points of attention, as those that most affect stakeholders, and on which the company can act directly.
Obviously, to start measuring the results of implementing a CSR strategy, you must first know what the baseline scenario is, what the indicators are and the values against which the results will be compared to determine whether the objectives have been achieved.
We are a long way from that inchoate idea of patting ourselves on the back for doing ‘something’, which is always better than ‘doing nothing’; CSR has evolved, it has matured, it is no longer confused with charity or philanthropy; it has become an essential pillar of management that must be considered with the same importance as financial management or human talent management;
How to measure corporate social responsibility
In order to measure CSR there are some fundamental steps:
- Determine the key points for improvement (materiality analysis)
- Establish indicators for these points;
- Measure the initial status of these points (digital tools, such as sustainability software, can be used);
- Define the objectives (do not forget that they must be SMART);
- Measure the situation of the same indicators after the action plan has been carried out
- Compare the initial scenario with the scenario resulting from the implementation of the CSR
- Organise and communicating the data
For example, to improve the indicator of female representation on its board, a company should start by measuring the initial situation (% of female directors in relation to the total); set a target (in two years, this proportion should be increased by X%); and measure the result at the end of the period (what percentage of female directors the organisation now has).
The role of communication in CSR
To make real progress on sustainability, transformation must happen at the very heart of the organisation, starting with top management commitment and moving through policies that drive change in the day-to-day processes of the business;
It is not possible to measure, let alone communicate, a good intention or a temporary action aimed only at pretending a model of sustainability that is not real;
Obviously, in this context, communication plays a key role throughout the whole cycle of a CSR strategy: in its definition, its implementation, the dissemination of its results and the corrective measures, if necessary;
The importance of stakeholders in corporate social responsibility
This is because the impacts of a business on its stakeholders and their needs cannot be determined without active and constant listening. Communication does not work if it is not bidirectional and the first thing that those responsible for sustainability in any organisation must do is to ask, listen, understand… Moreover, this listening does not only apply once, but is part of the day-to-day CSR strategy;
On the other hand, these same stakeholders, including regulators, want to have a clear understanding of the performance of the organisations they engage with, so that they understand the criteria that affect them, while at the same time driving them to make decisions about consumption, loyalty, involvement, support, legitimisation, investment, etc., with respect to these companies;
Communication, a vehicle for the dissemination of CSR
Communication is the essential ally of a CSR strategy: it supports its correct definition and is the vehicle for its dissemination, which allows companies to transmit information in an honest, consistent and comparable way;
If a business is coherent with its social responsibility, and if it is also transparent in its communication, the perception in its environment, both external and internal, will be favourable to continue building solidly one of the most delicate assets of any organisation: its reputation;
