Do you religiously sort your rubbish for recycling? Did you volunteer for your company’s latest charity event? Do you care if your employer takes part in Red Nose Day and plays a role in the community? The evidence in the UK points to increasingly positive answers to such questions.
But why should companies pay any attention to being socially responsible? And what stops corporate social responsibility from being just a cynical window-dressing PR exercise?
The cynics guffawed last month when Marks and Spencer’s top CSR award from Business in the Community was apparently tarnished by its recent troubles. And do you remember Macy’s, the department store in the movie Miracle on 34th Street, where nice Father Christmas was used to push slow-moving lines of kids’ toys?
Beyond the simple risk minimisation argument, which encouraged companies such as Gap and Nike to invest in CSR after exposés of sweatshop labour in their supply chains, Mr Macy himself helps to answer the first question. He recognises at the end of the film that “the store that places public service before profit makes more profit than ever before”.
Anita Roddick, who has just donated £1m from her Body Shop-derived fortune to Amnesty International, argues a similar solid business case for CSR: “It is surely common sense that investing in greater security for all is a sensible way for further wealth creation.”
HSBC’s Richard Beck agrees: “If donating £35m to conservation [in its joint venture with WWF] is window-dressing, that’s an expensive way of dressing a window.”
And in the recent M& S takeover battle, Philip Green robustly defended his CSR credentials, refuting allegations that his target’s £7m community budget might be under threat, citing Arcadia’s £1.25m schools sponsorship programme.
All investors should pay attention to the work of Jim Collins and Jerry Porras. They found that the companies with the highest sustained returns for shareholders on the New York Stock Exchange over the past 50 years had a strong sense of mission and purpose, which engaged their employees to go the extra mile.
Many of the UK’s longest-standing companies, such as Boots, Cadbury and M& S, had profoundly religious founders with this broad sense of mission, though as the latter asserts in its annual report, “our community work is an integrated, business-focused programme delivering benefits to communities, our employees, our customers and shareholders”. The Marks and Start programme, helping hundreds of homeless people back into work, combats both the retailer’s and the UK’s skill and employment shortages.
Addressing the employee agenda is the second main driver for today’s CSR activity, as well as a key means of refuting the ‘it’s just PR’ arguments. Research by the Chartered Institute of Personnel and Development and Business in the Community last year found recruiting and retaining high-quality people was the top business concern of chief executives in Europe.
What influences today’s top graduates to join and stay with their companies? Some 88% of those in our research regarded the alignment of individual and organisational values, and
commitment to a worthwhile cause, as a significant influence on their choice of employer.
But fluffy mission statements don’t wash with today’s streetwise generation. Fewer than half of them believe their employers actually practise their espoused values. This is why HR policies are so critical, to embed these motivating big ideas in an organisation’s day-to-day routines.
The Department of Trade and Industry has just launched its virtual CSR Academy. It provides many examples of the competencies required and actions being taken by leading companies to put their CSR policies into practice.
At Selfridges, the board regularly monitors a scorecard of key performance statistics for all its stakeholder groups. Microsoft has recently introduced CSR targets into the performance and pay assessments for its senior managers.
Effectively practised, CSR enhances a company’s HR strategy for recruiting and motivating staff in the high levels of commitment that are the linchpins of long-term competitive success.
So, CSR without HR is pure PR. Now, where’s that red nose for the chairman?