2. Implementing CSR > Adopting a step-by-step approach > CSR implementation by Prof. Maon
- There is no one best way or miracle recipe for addressing complex CSR challenges.
- Companies have to develop their own policies, actions, and strategies if they want to approach the CSR idea constructively.
- Thus, it gives us a way to approach the CSR idea strategically and in a structured way.
- Unlearning old ways of doing things is critical, and developing a CSR orientation means that managers uncover various unchallenged cultural assumptions about the “right way to do things.
- ” These assumptions constitute the organizational culture, so they are often held subconsciously and can create barriers to CSR development and implementation.
- Perceived threats to stability, fear of change, beliefs that a CSR orientation is inappropriate for an organization, or notions that focusing on CSR will result in losing sight of the organization’s core values are all notable barriers.
- In the first step, corresponding to the sensitizing stage, an early CSR vision gets triggered by an evolution in managerial perceptions of the business and societal environment.
- A CSR program has indeed to align with the values, norms, and mission of the organization.
- The organizational culture needs to support the development of CSR policies and actions.
- You can’t just build CSR policies and actions on a value-free basis or in an ethical desert.
- Developing a working definition for CSR that is clear to all organizational members and key stakeholders is essential if managers and stakeholders are to pull in the same direction and establish foundations for subsequent CSR assessments.
- Step 4 then involves auditing current CSR practices and benchmarking competitors’ practices or CSR norms and standards in the industry.
- The organization might designate a senior official or committee responsible for ensuring the overall CSR implementation, improving interfunctional coordination, building CSR responsibilities into employees’ job descriptions and performance evaluations, recruiting people knowledgeable about CSR who have appropriate attitudes and skills, and developing spaces for dialogue and knowledge sharing across the organization.
- Although top management determines the direction and strategy for CSR, middle management and employees implement it in reality.
- When it involves employees in discussions of CSR implementation, the organization can help them develop a sense of ownership and pride in their organization’s CSR activities.
- It also means ensuring that they understand the context and background of the CSR approach, including its motivation, rationales, relevance to the organization, fit with existing organizational objectives, and any changes it creates in current approaches.
- During the refreezing stage, communication instead centers on publicizing and demonstrating the success of the CSR program, as well as anchoring the CSR vision in the day-to-day activities of the organization.
- Corporate decisions about the nature and level of communication about CSR practices remain complex though.
- In particular, communication needs vary across stakeholders and the priority they place on CSR issues.
- Here, the clear identification of key stakeholders and their expectations -together with a continuous, CSR-related, stakeholder dialogue- remain cornerstones of CSR implementation and communication.
- Next, Step 8 recognizes that improving any CSR program requires evaluations, measurements, verifications, and reports that attempt to determine what works well, why, and how.
- Regular formal reviews of CSR activities also must enable stakeholders to recognize progress and make activities both visible and transparent.
- Finally, CSR policies and actions need to be institutionalized and adopted as a long-term strategy.
- This model presents a limited number of steps, but CSR development and implementation are actually a never-ending process, reflecting a logic of continuous improvement.
- Expectations evolve, CSR issues shift, and environments mutate.
- More generally, maintaining continuous, structured stakeholder dialogue processes is central to any successful CSR development and implementation processes.
- That is, organizations and their managers must look carefully at how formal and informal connections and relationships between and among stakeholder groups.
- Finally, a culture of continuous learning should mark stakeholder dialogue processes, from the very start of the CSR development and implementation.
2. Implementing CSR > Adopting a step-by-step approach > CSR implementation by Sabine Denis
- The company has to define the vision that will embed its societal purpose.
- CSR starts with an explicit strategic decision by company leaders.
- It requires defining a clear social purpose, publicizing it internally and externally, and then embedding it in core processes, such as strategic planning or budgeting.
- This vision helps the company pay close attention to the societal consequences of its decisions, as well as to externalities of its actions and the problems it could help solve through entrepreneurial initiatives.
- Food companies such as Nestlé, Unilever, and Danone are repositioning themselves as nutrition and health companies.
- Technology and telecommunications firms such as IBM, Intel, and Verizon have made improving education and health care or making cities more livable their central missions.
- The vision next has to be translated into a clear strategy that gives shape and direction to a company’s engagement.
- Nestlé focuses on three key issues: rural development, water use, and nutrition.
- Each area has a direct impact on the company’s core business.
- The strategy for the Belgian beverage company Spadel consists of three pillars: nature, footprint, and people and society.
- The most effective companies mobilize a wide range of internal and external resources.
- Water access is a critical issue in India, Mexico and South Africa, but water is pretty abundant elsewhere.
- Thus, the company can continually adapt and focus its investments on the locations with the highest returns.
- Effective companies employ a range of communication approaches to reach specific groups in targeted ways.
- Both CSR and shared value require the active participation of virtually all corporate functions, but to develop a sense of shared ownership, employees need to understand and buy into the concept.
- The Credo accordingly is central to the company’s very identity.
- Another example is the Belgian chemical company Solvay, which uses various methods, tools, and processes to align its present and future activities with sustainability challenges and opportunities.
- CSR reports demonstrate transparency and commitment, but they tend to be read by just a few people.
- To extend their communication channels and reach a wider audience, companies might use their CSR reports as part of a wider communications strategy.
2. Implementing CSR > Adopting a step-by-step approach > Other insights from practitionners
- The CSR initiatives within a company involve five key stages: The top management’s acknowledgement of the need to implement CSR and commitment to it.
- Assessments of existing CSR-related initiatives, to highlight their worth The establishment of a CSR strategy among in-house stakeholders that also is in line with societal needs.
- Implementation of internal and external communications, together with an awareness strategy to share the company’s flagship initiatives Assessments of the results, along with measures of the impact or effect of CSR initiatives on the company’s overall performance.
- There are several key steps in the CSR journey: Identify the impacts and assess the social and environmental risks of the company.
- Clarify the vision and values of the company, so that the top management can determine the priority actions and add the CSR journey to the general strategy of the company.
- Define written action plans and measures to reduce impacts, as well as key performances indicators to measure progress.
- Mobilize stakeholders, especially the staff, to undertake the change.
- Develop innovative solutions to reduce impacts in the long term.
- Develop a CSR reporting system to communicate current status and report on progress.
- When we launched CSR at Proximus in 2007, we began by writing a first CSR report for 2006.
- Just like becoming virtuous or ethical is not a single-time project for an individual.
- A company, before anything else, is a group of persons undertaking a venture together.
- So I actively refuse to identify the “steps” to implement CSR. I prefer to speak about a few critical actions that must be undertaken and then put right back onto the table again.
2. Implementing CSR > Key success factors > Key success factors
- Involvement by top management in the CSR process, so that the journey is integrated into the global strategy and is not a simple communication action.
- A partnership with a third party that has CSR expertise and credibility.
- This sort of collaborations helps frame the scope of the CSR journey and determine ambitious objectives for the short, middle, and long term.
- It also gives credibility to the CSR journey, because the initial analysis, criticism, and measurement come from a third party.
- The success of a CSR strategy depends essentially on four factors.
- To induce a serious CSR culture -a culture that goes beyond just compliance, window-dressing or CSR-washing- the managers and the most important members of the Board of Directors must first consciously renounce the Friedman equation and clarify their societal purpose.
- All employees should be allowed to challenge and question strategies, policies, rules, and hierarchies that might cause damage or harm some stakeholders.
- Training also should be offered to all employees, to strengthen their capacities to question, to recognize ethical dilemmas and deal with them, to identify externalities generated by their companies, and to propose ways to lessen the impact of negative ones and increase the impact of the positives.
- CSR should be the business of everybody in the company, not limited to a particular team.
- Employees dealing proactively with CSR issues, whatever their field of activity, should be recognized and incentivized.
- The second key success factor is to adopt a systemic, an integrative perspective where we look at the whole rather than some of the parts, and we try to optimize the whole, and to find synergies and alignment of interest along the different parties.
- Of course all this could lead to major changes, and these changes you don’t have the solution or the right answer right from the start the only way to go about implementing those solutions is not through a Big Bang approach where there is a day before and a day after, where things are radically different, it’s really through step by step experimentation, discussions with partners, co-creation, learning by doing, and adapting, and so on.
- A company has to think carefully about how CSR can save or make money for it, by addressing some specific societal need and creating shared value, while still acting in its own best interests.
- Second: link the CSR strategy to the company’s core business.
- The core purpose of an enterprise is a beacon for finding a valuable CSR strategy.
- All of these companies tie their CSR efforts explicitly to the products they sell and their core business.
- Corporate responsibility and sustainability can apply to a vast range of issues, and not all of them are relevant for every company.
- I identify the success of ambitious CSR development and implementation processes on two different levels.
- Second, connecting CSR vision and strategy with core values, competencies, and functional strategies.
- Then comes fostering the presence of moral, CSR champions, at all organizational levels.
- Second, involving employees in developing CSR programs and fostering creative and innovative thinking.
- Formalizing CSR objectives through official documents and regular communication.
- Creating enthusiasm and credibility around CSR. Emphasizing relationships between new behaviors and success.
- Rewarding people who create CSR successes, with formal incentive schemes but also by including CSR-related considerations and objectives in job descriptions and evaluation processes.
- More generally, maintaining continuous, structured, stakeholders dialogue processes is central to any sucessful CSR development and implementation processes.
2. Implementing CSR > Key success factors > Key success factors
- Involvement by top management in the CSR process, so that the journey is integrated into the global strategy and is not a simple communication action.
- A partnership with a third party that has CSR expertise and credibility.
- This sort of collaborations helps frame the scope of the CSR journey and determine ambitious objectives for the short, middle, and long term.
- It also gives credibility to the CSR journey, because the initial analysis, criticism, and measurement come from a third party.
- The success of a CSR strategy depends essentially on four factors.
- To induce a serious CSR culture -a culture that goes beyond just compliance, window-dressing or CSR-washing- the managers and the most important members of the Board of Directors must first consciously renounce the Friedman equation and clarify their societal purpose.
- All employees should be allowed to challenge and question strategies, policies, rules, and hierarchies that might cause damage or harm some stakeholders.
- Training also should be offered to all employees, to strengthen their capacities to question, to recognize ethical dilemmas and deal with them, to identify externalities generated by their companies, and to propose ways to lessen the impact of negative ones and increase the impact of the positives.
- CSR should be the business of everybody in the company, not limited to a particular team.
- Employees dealing proactively with CSR issues, whatever their field of activity, should be recognized and incentivized.
- The second key success factor is to adopt a systemic, an integrative perspective where we look at the whole rather than some of the parts, and we try to optimize the whole, and to find synergies and alignment of interest along the different parties.
- Of course all this could lead to major changes, and these changes you don’t have the solution or the right answer right from the start the only way to go about implementing those solutions is not through a Big Bang approach where there is a day before and a day after, where things are radically different, it’s really through step by step experimentation, discussions with partners, co-creation, learning by doing, and adapting, and so on.
- A company has to think carefully about how CSR can save or make money for it, by addressing some specific societal need and creating shared value, while still acting in its own best interests.
- Second: link the CSR strategy to the company’s core business.
- The core purpose of an enterprise is a beacon for finding a valuable CSR strategy.
- All of these companies tie their CSR efforts explicitly to the products they sell and their core business.
- Corporate responsibility and sustainability can apply to a vast range of issues, and not all of them are relevant for every company.
- I identify the success of ambitious CSR development and implementation processes on two different levels.
- Second, connecting CSR vision and strategy with core values, competencies, and functional strategies.
- Then comes fostering the presence of moral, CSR champions, at all organizational levels.
- Second, involving employees in developing CSR programs and fostering creative and innovative thinking.
- Formalizing CSR objectives through official documents and regular communication.
- Creating enthusiasm and credibility around CSR. Emphasizing relationships between new behaviors and success.
- Rewarding people who create CSR successes, with formal incentive schemes but also by including CSR-related considerations and objectives in job descriptions and evaluation processes.
- More generally, maintaining continuous, structured, stakeholders dialogue processes is central to any sucessful CSR development and implementation processes.
2. Implementing CSR > Key success factors > The Nestlé case
- We already talked about these huge issues to be tackled: youth unemployment, child labor, water scarcity.
- So it means we need to be transparent, we need to share where we are -what is the status-, but aslo we need to share where maybe we are not but we would like to be and then to define, ok how can we get there.
2. Implementing CSR > Key success factors > What to keep in mind ?
- If you have listened carefully to our experts, you likely have identified some common, underlying bases on which build your CSR strategy, according to your company’s cultural background, values, mode of functioning, size, and sector.
- It does not just happen; CSR follows a process of careful information gathering, prioritizing, and decision making to determine where resources should be invested to ensure the greatest benefits for the business, social concerns, and stakeholders.
- Second, the most appropriate starting point for strategic CSR is the corporation’s mission and values.
- They therefore need to consider questions like: What values guide the way our company does business? How are these values related to larger social and/or environmental concerns? Third, in addition to being driven by the corporation’s mission and values, strategic CSR should be driven by stakeholder expectations.
- Stakeholders should be an inspiration for CSR and help identify issues that underpin the organization’s CSR efforts.
- Fourth, senior and top management should provide CSR leadership, to ensure its legitimacy and establish its importance within the corporate strategy.
- Top managers are role models for CSR, and others in the company emulate them.
- It also is necessary to develop a common understanding and appropriation of what CSR is at all levels of the company.
- Fifth, CSR requires learning over time and an ability to understand the specific context and confluence of stakeholder expectations.
- CSR strategy development and implementation also requires managers to unlearn.
2. Implementing CSR > Obstacles to overcome > Obstacles
- So you should have the courage to try and pilot test and many companies don’t do that anymore.
- Skepticism and fear of change -whether to protect existing ways of working or due to a lack of understanding- are the main obstacles to overcome.
- Transparent communication, external pressures, management drive, and early successes are the key to overcome those obstacles.
- Obstacles arise when there is insufficient conviction or support from the top management and if the journey and objectives are not explained properly to the entire staff and all the stakeholders.
- The choices of the actions to take should align with the overall vision, values, and core business of the company.
- Another obstacle I see is within society and with the consumers, which I am, and which we are all, and which is the kind of conflict or schizophrenia we have in ourselves.
- Three main obstacles tend to hamper our efforts to reach our CSR objectives: economic or geopolitical circumstances in the areas in which the group operates, a lack of coherence and clarity across the various projects, and the gap between the company’s business strategy and the kind of projects which are undertaken.
- There might be some challenges in terms of creating a common understanding and commitment, but they can be resolved through good communication, working together, relevant data and information, openness to other voices, and so on.
- There is only one critical obstacle: a lack of consciousness by top management and board members.
- One of the main obstacles for implementing a CSR strategy that is really ingrained into the core business of the company is that it requires to challenge things which are very important.
- When you challenge the business model of your company, it can be very demanding, it can be very scary, and it really requires to rethink, look at the world differently, and to challenge some basic assumptions.
- They thought CSR would change their way of working and take the business in the wrong direction.
- The first obstacle is to, kind of, to try to copy and paste Each company is unique, each culture is unique, and therefore each CSR strategy will be unique.
- The number one obstacle is to believe wrongly that you could do a copy and paste from the CSR strategy of one company to the other.
- Today the management of most companies has been trained, formed, and been very successful, in applying one type of business model.
- The difficulty to unlearn, and to be humble about the challenges that major companies are facing, is an obstacle.
- The sole obstacle is to, in my view, is to try to limit CSR to reputation purposes.
- Unless CSR is not, has not reached the core of the operating model of any business, it will remain something peripheral, it will remain something for reputation purposes, and could actually build some criticisms.
- So I think there is, long will be the road here, there are multiple obstacles.
- I think the nature of business models is an obstacle, the difficulty as human being to unlearn and learn new things is an obstacle, the, also the lack of knowledge, in a sense, the lack of knowledge that exists in this area of doing good and doing well is an obstacle, because we know, as a business, we know how to manage financially a business, we don’t know yet how to manage socially and environmentally a business.
2. Implementing CSR > Obstacles to overcome > The Nestlé case
- Obstacles are that climate changes can be much faster than we have assumed, can be different.
- A lot of people in a lot of areas in the world still believe there is no CO2 issue, so if you talk about, you want to reduce the CO2, or the emissions into the environment, not everyone in the world still believe this is a need to do.
- So obstacles are really to inform people, to be transparent, to share with them what we believe, what we believe what we need to do.
2. Implementing CSR > Common mistakes > Common mistakes
- I can think of two common mistakes related to running a CSR initiative: First, not taking local stakeholders’ concerns into account or not doing enough to understand them.
- So we quickly learned that the choice of a partner is a key element in successful CSR projects! You tend to forgot that people have different levels of understanding of an issue.
- As a manager, I had to come to understand a few things: I need to spend lot of time interacting, face-to-face and on the ground, with staff all over the world, to explain the policy and strategy in the context of their local norms, values, and issues.
- I have to work with local supervisors and let them translate the corporate communication into specific and personal examples.
- The most common mistake is to think CSR has everything to do with society and nothing with the company or the organisation itself.
- There is this sense that CSR automatically increases costs, and that assumption tends to lead people to overlook its effect on innovation.
- CSR can be initiated for reputational reasons, and in those cases, it is perceived to reduce risks, though the major benefits are really that it increases trust and thus reputation.
- A CSR strategy has to be integrated into the general strategy of the company and supported by the general management; otherwise, it will be reduced to pure communication.
- Belgacom was able to implement its CSR strategy successfully only when it integrated its CSR objectives with its overall strategy, so CSR became the responsibilities of each unit manager, instead of one “CSR guy” who sat outside the organizational chart.
- Common mistakes: first one would be to isolate CSR. So, you isolate CSR somewhere in a department, on the side, or you hire someone – which is logical: you hire someone to have an owner of the topic.
- That would be, I think, one of the biggest mistakes: to isolate CSR on the side and especially not having it high enough in your organization.
2. Implementing CSR > Common mistakes > The Nestlé case
- So do you have a concrete case on which you think you made mistakes or you learned from that mistakes to improve today your CSV management? I think there is one case which is probably widely known: it’s the KitKat case which is – I think it happened already 8, 9 or 10 years ago- where we were attacked by an organization called Greenpeace which is very very well known that due to KitKat and due to the usage of palm oil, that orangutans in the Indonesia would lose their space to live in.
- We use certified palm oil and we really work together with NGO organizations to ensure that there is no deforestation anymore happening in regards to the palm oil.
- We learn some years ago, problems or criticisms about the KitKat brand and the use of palm oil in Kitkat brand, can you give us your opinion about this small -or big crisis- that could be for Nestlé? Yeah, it’s interesting because I told you that one of the advantages of being in contact with our key stakeholders is that we, it allows us to anticipate some of the issues that arise and to be more ready to face it.
- What is interesting is actually we had been in a dialogue with Greenpeace about this specific question of palm oil for several months if not, several years and we were already, we had already expressed our commitments to reduce the part of palm oil, when we use palm oil, to do it with really suppliers that have a responsible way to grow the palms and to exploit them.
- I mean it sort of died relatively quickly because, well, you know, we, when we said ” ok, by this time we will stop using palm oil in our products, this, this, this… I mean what else can you say, you know?” So that’s it, the problem was in a way closed relatively quickly and didn’t create that much damage.
2. Implementing CSR > Stakeholder dialogue > The crucial role of dialogue
- I am talking about two-way communication inside the organization, among members, but also with external stakeholders.
- More so than in the past, people, and I quote, “Do not want merely to be identified, described, researched and communicated to []; instead they want to be part of strategic formulation….” A real, non-fictional stakeholder dialogue can increase the organization’s know-how about how to implement and then communicate about its CSR. It is also a good way to prevent bad buzz while improving its reputation and long-term relations.
- Dialogue is necessary to confront the organization’s perceptions, ideas, and projects against those of stakeholders, so that the organization can learn and improve itself.
- It develops, matures, and grows within a company only through an honest, authentic dialogue between the company and its stakeholders.
- Engaging with stakeholders is necessary first to understand if the company even knows what its impacts are.
- An area in which stakeholders can be of great help is by providing competence and skills or challenging the ideas that are being developed.
- Next to consultation and validation, engagement with stakeholders really defines the terrain of the seasoned CSR professional-always leading to new insights and solutions.
- To assume their responsibilities, companies should interact closely with their stakeholders including the staff, customers, suppliers, civil society, public authorities,, who are key to identifying economic, social, and environmental impacts.
- Addressing a global responsibility is not only a moral obligation but also the best way to respond to pressures from stakeholders, mitigate the risks of environmental degradation, and overcome the social divide in economic opportunities.
- A stakeholder dialogue also is becoming an asset, because the company can better anticipate the expectations or criticisms of its activities.
- A strong interaction with stakeholders is a perfect answer to the challenges of CSR. It gives an idea of how to tackle the complexity of the challenges.
2. Implementing CSR > Stakeholder dialogue > Difficulties
- How will it weight each stakeholder in its decision process? How will their respective expectations and demands be taken into account? There are no easy or standard answers to these questions.
- Each company needs to deal with them, from its own particular perspective, with its own “Conscience”, and with the knowledge that its answers will never be definitive and will need to be reviewed regularly and reconsidered to take new societal developments into account.
- Of course, each stakeholder looks at sustainability challenges and goals from their own perspectives.
- The input of each stakeholder is valuable, though it also tends to be diverse and sometimes even contradictory! It is important to listen to all these opinions, then take them into account in our decision making.
- Faire une hiérarchie entre les attentes des différentes parties prenantes est un enjeu important : doit-on satisfaire tout le monde ? Je pense que l’on doit chercher une solution pour inclure toutes les considérations car négliger une partie prenante peut conduire un mouvement de blocage et aussi petite qu’elle soit l’ère des réseaux sociaux aussi peut très vite démultiplier une petite minorité en un grand mouvement social.
2. Implementing CSR > Stakeholder dialogue > Recommendations
- Make stakeholder dialogue real, not just a tactic to improve the firm’s own image.
- Dialogue has to be a real source of information and suggestions, not a pretext for saying, “Hey, look at us doing dialogue!” My main recommendation would be to go for a qualitative dialogue at some point.
- Anyone hosting a dialogue should be clear about their expectations.
- Members of a dialogue should be prepared to hear and listen to critics.
- Come back to stakeholders to show that you care about them and what they think.
- Regarding stakeholder dialogue, which is at the very heart of Corporate Social Responsibility, is to make sure that you start this by engaging: your management and even your board members and the CEO directly in this dialogue.
- It’s a minimum of preparation in terms of identification of the relevant stakeholders and what are the two or three main topics you would like to address with them in the dialogue.
- Now, one experience I also have with stakeholder dialogue is that you commit to, what your internal and external stakeholders, that you will come back in 6 months time after the dialogue to explain what is it that you have been doing or not with all the knowledge, all the expectations and advices and tips that you will have received during that day.
- So that they can understand and that they are taken seriously about the input that they are providing in this stakeholder dialogue.
- Un dialogue entre parties prenantes ne peut pas être effectif s’il n’y a pas de compréhension mutuelle des cultures de chacun.
- Ensuite, il faut que le dialogue aboutisse une culture commune dérivée de chacune des cultures de départ.
- Ce dialogue passe donc par de la confiance, de l’empathie et de l’envie.
- Il est clair, le dialogue ne se décrète pas, il se construit brique par brique, action par action.
- Une trop grande précipitation ou la domination culturelle d’une partie prenante nuit la symbiose d’un dialogue pérenne.
- Create in-depth, one-to-one dialogues or focus group meetings with stakeholders who have clear opinions.
- Then be clear about the scope of what will be discussed with stakeholders -otherwise, you create impossible dreams and frustration.
- Finally, always offer feedback to stakeholders about what you plan to do with the information you’ve learned from them! In stakeholder dialogues, the company cannot be seen as the enemy.
- The dialogue needs to be open and constructive.
- I think that the key to success for stakeholder dialogue is really to build trust and cooperation among the different partners.
- Such a dialogue must allow for formal and informal meetings, for criticism, and for joint actions.
- Stakeholders within and outside the company must believe that top management is open and receptive to their views, expectations, suggestions, even criticisms, and that when they are voiced, management will take action, one way or another.
2. Implementing CSR > Stakeholder dialogue > The Nestlé case
- One of the things that we try to do is first work with our stakeholders, in the sense, which are, you know, our expert partners.
- The, you know, the international local organizations, governments and so on… to really engage with them in a real dialogue, and to be on a listening mode with them, so that they see that it is something serious for us, it’s not something that we do because it looks pretty.
- We generally just refer to go to this site where you will learn more about how we make you know, how we collaborate with farmers on, you know, cocoa agriculture or something like this.
- We will not try to have you know an advertisment that says you know “what is the wonderful world that we do with the farmers because you can’t do it in a few seconds.
2. Implementing CSR > Stakeholder dialogue > What to keep in mind ?
- In addition to their economic and legal duties, companies have ethical and discretionary responsibilities to society, which reflect the requirements, expectations, and desires of multiple stakeholders in the industrial and societal environment in which they operate.
- Each company represents a constellation of converging and competing interests, each with intrinsic value, such that it provides a place of mediation, where the varying interests of different stakeholders and society interact.
- A series of questions thus quickly arises at an early stage of CSR reflection: Which CSR issues should be addressed? How can we prioritize those CSR issues? How should the pertinent CSR issues be addressed? With which partners? Entering into dialogues with stakeholders is essential for answering those questions; for understanding stakeholders’ expectations, perceptions and reactions to CSR; and for working together with stakeholders to develop better strategies.
- Fifth, transparency: Crane and Matten define transparency as the degree to which corporate decisions, policies, activities, and impacts are acknowledged and made visible to relevant stakeholders.
- Some other recommendations also have been proposed by different corporate and academic experts involved in this course: be open, be humble, listen actively, acquire savoir-faire in mediation, which means developing skills such as empathy, human respect, and positive interaction And though everybody agrees about the importance of stakeholder dialogue, nobody claims that it is an easy task! It demands being willing to accept modifications to the firm’s hard won strategy, due to external influences; it means opening the door to criticisms of the firm’s flaws, lack of progress, or contradictions between its commitments and its reality.
2. Implementing CSR > Stakeholder dialogue > Dialogue with employees
- Consider the dialogue between shareholders and employees.
- In the case of firms, we should equally be shocked if someone calls democratic a governance model that grants power to a single stakeholder without being able to demonstrate that e.g. workers are either so much less knowledgeable than the average shareholder, or so much less affected by the policies of the firm than the average shareholder, that they should simply be excluded from voting at the company’s general assembly.
- Why should the privilege of participating in decisions be restricted to cash contributors? Sure shareholders bring financial capital to the firm.
- Workers bring human capital, and there are plenty of democratic models of governance operating in the real economy.
- So firms should take the initiative of implementing more democratic decision-making processes and the practical option to do so are in front of our eyes.
- Being socially responsible means creating or improving dialogue with employees and including them in the company’s strategic decisions.
- In early 2000, a major Belgian insurance company implemented a CSR strategy, including quality and continuous improvement circles.
2. Implementing CSR > Stakeholder dialogue > Dialogue with WWF
- To achieve its mission, an organization like WWF uses a scientific and constructive approach to encourage collaboration and dialogue with other organizations, authorities, and companies.
- Working with companies to reduce their ecological footprint represents a necessary method to transform the society.
- At WWF, I engaged companies in Belgium that were anxious and ready to implement a CSR strategy through an improvement program.
- The impacts of the wider sector in which the company works provides the scope for our work.
- It’s obvious, for example, that a textile manufacturer needs to control its ecological footprint, but a company in the telecom sector needs to prioritize reducing its CO2 emissions.
- A credible CSR journey needs a scope that is large enough to reflect all the impacts of the company: from production to supply, from product use to managing end-of-life outcomes, to working to reduce impacts in a growth scenario.
- A third party doesn’t have to validate every activity a company takes.
- Instead, its role is to guide the company in the journey and move the process forward.
- In working with the Coca-Cola company to reduce the amount of fresh water used to manufacture their namesake beverage for example, we realized it was also important to reduce the amount of sugar and citrus, because the quantity of water needed to produce those ingredients was even greater than the amount used to manufacture the drink.
- In a partnership between a company and an NGO, the staff is crucial.
- So to reduce its CO2 emissions, Mobistar encouraged its employees to use public transportation by offering mobility packages that were worth more than company cars and by reducing parking facilities, while at the same time increasing the number of shuttles to local transportation stations.
- Efforts by staff to support CSR initiatives often are what decides whether a company reaches its CSR objectives.
- Because the company explained the initiative to the whole staff, they spontaneously organized themselves into ecoteams who collected data, and then became active ambassadors and exemplars within the company.
- As these examples show, a partnership involves transforming not only the company’s impacts but also those of their stakeholders.
2. Implementing CSR > Stakeholder dialogue > Dialogue at Proximus
- For our CSR partners, we meet regularly to take stock of our joint projects and better understand the issues concerned.
- When it comes to our suppliers, a key objective of our company’s purchasing department is to encourage suppliers to meet or exceed legal standards for the provision of products and services by integrating social, environmental, ethical, and sustainable principles.
- We also encourage our suppliers to promote CSR principles among their own partners and suppliers.
- With this platform, our key and high-risk suppliers can complete a Self-Assessment Questionnaire to analyse and validate their CSR performance.
- Finally, with our peers, we share CSR best practices and try to build common projects with other companies that are part of the Shift and Be.Face networks, as well as with ETNO and GSMA.
2. Implementing CSR > Stakeholder dialogue > Dialogue at McCain
- How is it that through these stakeholders well-prepared, McCain has developed new business models, one in Columbia, one in the North of France and where now you have new series of products that come on the market and every of this product has a story explaining how they have been made and produced and harvested through a whole supply chain.
- That is something that is really remarkable to see how a mix of stakeholders with the top of the company can rethink the purpose and generate new production lines, new products for consumers like you and me that we can buy in any shop.
2. Implementing CSR > Stakeholder dialogue > Dialogue at Gerdau and Vale
- If you want to find a solution or develop a solution to the issue of mobility then you really have to put around the table all the different actors who bring the different elements of the solutions which are cars, public transportation, bicycles, infrastructure, signaling systems, communication systems, training of citizens to change their behaviors and so on.
- It really takes collaboration and co-creation with all those stakeholders to develop innovative solutions for mobility in cities.
- If I wanna give a counter example of stakeholder dialogue, I would talk about Vale who is a Canadian company, a mining company, and Vale -like every company or every large company- publishes every year its sustainability report.
- Well they are so poor at managing the relationship with their stakeholders that recently we have seen appear another report which is called the “Vale unsustainability report” which has been published by all the opponents in society, NGOs and so on who are not happy about the way that Vale is operating.
2. Implementing CSR > Company motivations and potential benefits > Companies’ motivations
- They recognize that CSR and profit can go hand to hand.
- For a group like ENGIE, implementing a CSR policy and incorporating it into its strategy comes from the objective observation that the company’s business and performance must include considerations of diversity, multiculturalism, social innovation and the sustainability of industrial processes.
- Getting this validation going depends on the level of CSR maturity: is it project-based, or is it really integrated within the management of the organisation? Is there an explicit goal? Creating a CSR organisational structure is an obvious and necessary step for organisations that are serious about CSR. If we zoom in on the motivations that lead company business leaders to address CSR, three of them become prominent: First, some say “because we must” due to the legal obligations, social pressures or customer demands.
- Others would say “because we should” usually stemming from some personal conviction, such that the personal values of managers determine the values of the company.
- A recent CSR barometer in Belgium revealed that the top 5 reasons for companies to explain their CSR strategy were all closely related to long-term visions: they hope to improve their reputations, their relationships with stakeholders, the motivation of their employees, their innovation, and their compliance with regulations.
- So it seems that companies are still struggling to find clear and immediate business advantages of their CSR strategies.
- Even if there is still a way to go, companies seem to understand that sustainability involves business opportunities and not just contraints.
2. Implementing CSR > Company motivations and potential benefits > Other benefits
- Making business decisions by looking through the prism of economy, society and environment, managers gain access to a myriad of new possibilities for increasing profits or saving costs, through new product and service development.
- Cost reductions are another important reason, for about half of all companies.
- This rationale is particularly important for companies that have worked to reduce CO2 emissions, especially those that started with quick wins and planned for necessary adaptations to reduce costs in the long term.
- A company involved in a CSR strategy also can gain a competitive advantage, even if the results are only visible in the long term.
- As first movers, these companies also can claim a leadership role in their sectors.
- As leaders, they influence all other companies in that sector to engage in similar processes.
- The improvement process often leads to innovation, because the company seeks innovative solutions to reduce its impacts and minimize its risks.
- It might even mean a new business model for the company.
- Finally, companies involved in CSR projects are securing current and future investors, because they are considering their risks and anticipate any issues among stakeholders.
- Therefore you can bring totally innovative solutions to protect the crop which are natural protection like sexual trapping, like natural predators, butterflies and insects who would eat some smaller pests and so on.
- The third benefit is the increased motivation and involvement and retention of the staff in your company.
- If you work for a company which is meaningful, and again example with this crop protection company, it’s probably much more motivating to be working in this company because it brings value to your job and therefore you are more likely to stay in the company, you are more likely to say things postive about the company to your people around you, and also you are more likely to strive, to flourish, to be fully dedicated, and fully performing in your job.
- Maybe the last benefit I would like to mention is that when you build the value creation of your company, when you build your business model on immaterial resources… Well, these immaterial resources, they are very much linked to people, and to the ecosystem and to the relationships that you have around the company.
- These companies are really anchored in their territory, and therefore they do not run so much the risk that a manufacturing plant or an office site would be closed and delocalised to a low cost country.
2. Implementing CSR > Company motivations and potential benefits > The Nestlé case
- If you take one of our principles of Creating Shared Value, it’s for example “sustainability”, rural development.
- What are the motivations of Nestlé in targeting this Creating Shared Value or CSR? Or can we talk really about motivations behind or is it really part of the way you do business? Yeah.
- I remember when I joined Nestlé 13-14 years ago, this was the time, when the price of coffee and cocoa as a raw material was going down, down, down.
- What are according to you the main benefits that you can derive from this CSV strategy? I think it lies in the definition of Creating Shared Value.
- So the benefit here is savings for us and we can, and there is more water available for the society, we can help people to use less water which then has a long term effect for the entire environment, ok water will stay for a longer time.
- The value for us, is they will stay in the supply chain, they will continute to produce cocoa beans and they will deliver this extremely important raw material we need to produce chocolate, cocoa powder, etc.
- We learn and we can also sometimes, it will help us also to reduce costs but much more often, it will help us to give a wide access to more people, that means to increase the potential base of doing business.
- Finally, maybe we can talk about the benefits for the company? So you begin by talking about this concept of Creating Shared Value that is value for the Society and for business.
- Can we specify a little bit what you mean in terms of type of value for business? Oh well there’s quite a lot.
- When we work at diminishing salt in our products, when we work at diminishing sugar in our products, when we work at bringing more nutritional value for our product, this is definitely something that we can market and that brings us a competititve advantage, so this is someting that yes, it brings profit, it brings growth.
- What’s in your CSV strategy for Nestlé people? A lot.
- If you are so decentralized, people need to be able to take responsibility but they also need to know ok, there is trust, there is strong values and strong principles.
- For me, it reminds me a little bit when I was a child, I have brothers and sisters and we got from our parents also we got trust, we got responsibilities but there were also taking care for us and they were steering our way.
- That way of being able to grow up, to learn, to take responsibility that is very powerful and very much motivating for the people because they know with their behaviour, with their contributions, they can do feel good.
- If you look at our people, the vast majority of our employees, they stay for the whole life – or for working life- at Nestlé.
- As a HR manager I can tell you one thing that is essential is the pride and the engagement of our employees.
- I mean we see this a lot, that it’s completely, yeah it’s a key element of why we attract people, why we do retain people, why people are happy to work for Nestlé.
- We see it, we do employees surveys every two years, we see that our scores are getting better and better and better in terms of engagement, year after year.
- So we have committed to a certain number of hiring of young people over three years.
- It’s about 20 000 opportunities that we committed to give to young people in Europe.
- As part of this initiative, we also want to help young people get more ready for work.
- So for instance we have employees who were mentoring young job seekers, we have employees going to events where people can get trained in doing a interview or things like this, we have, we organize events with the local schools etc… So that we prepare the kids to see, you know, their future life, and give them perspectives.
2. Implementing CSR > Company motivations and potential benefits > What to keep in mind ?
- Surveys of top managers and CEOs indicate that most of them believe that their firms’ CSR engagement will be rewarded by consumers and employees, among other stakeholders, though they also agree that the lack of a clear link between CSR and financial performance is a barrier to continued progress in the field.
- The reasons for those divergent results are numerous, such as: Studies that refer to different operational definitions of CSR that use different measures to assess the degree of CSR, leading to divergent conclusions; The potential benefits of CSR, such as higher employee morale or a better reputation, that never appear on balance sheets; Studies that use different time lags to measure the impact of CSR on financial performance, some of which are too short and thus are not coherent with the long-term nature of CSR activities; Considerations of different sectors of activities, as well as companies of different sizes and cultural backgrounds-factors that potentially affect the direction and intensity of the relationship between CSR and financial performance.
- Building on stakeholder theory, research shows that CSR initiatives can affect organizations’ bottom lines by creating strong and trusting relationships with key stakeholders, who in turn provide essential support – in terms of resources, legitimacy, collaboration- for the organizations’ success and long-term survival.
- In the workplace for example, CSR perceptions relate positively to employees’ commitment to and identification with the organization-which refers to the extent to which they develop a sense of connection with the company, because they think facets of the company’s identity overlap with their own.
- Prior literature demonstrates that CSR might strengthen consumers’ identification with the company, increase consumer trust and loyalty, and stimulate positive word of mouth.
- CSR activities can enrich the company’s reputational capital; attract loyal investors; improve the quality of suppliers; attract new business; and increase the employability of workers.
- What impacts do CSR activities have on society and, more specifically, on the social and environmental issues they are designed to address? Focusing solely on corporate concerns implies a corporate-centric perspective that marginalizes social interests while privileging financial concerns.
2. Implementing CSR > Conclusion > Conclusion and teaser
- We are at the end of the second module for this course on “Communicating Corporate Social Responsibility.
- ” By this point, you should have acquired some knowledge about CSR implementation and the importance of good stakeholder dialogue.
- You can recognize the key ingredients for implementing a successful CSR strategy, such as the crucial role of top management commitment, the development of a common understanding and appropriation of what CSR means at all levels of the company, and the mobilization of collective intelligence within the company and in collaboration with different stakeholders And finally, you know very well that a good stakeholder dialogue is necessary, because it can help make sense of issues in both economic and ethical terms and advance the discussion about how these issues can be integrated into an overall corporate strategy.
- This dialogue opens up a negotiation process, where judgments and assumptions are exposed and out in the open, and it improves stakeholders’ perceptions of legitimacy and trust, provided that the dialogue is transparent and the initiator responds constructively to expressed expectations.
- With these premises, the next module moves our journey forward by detailing the crucial role of communication in the CSR process.
- Until pretty recently, effective communication about CSR was hindered by a common assumption that communication simply meant the transmission of CSR information from the corporation to its stakeholders.
- CSR communication is a challenging, necessary process, requiring a clear understanding of stakeholders, their information needs, and the available communication channels.
- In particular, CSR communication cannot follow a simple, one-way public information model of exchange.
- It demands two-way communication, between companies and their stakeholders, with a focus on mutual understanding and shared value.
- CSR communication also involves listening more than talking.
- That alone renders CSR communication quite different from communication about a product or a service.
- The academics and consultants who participate in this module are specialists in the field of CSR communication.
