Business 2.0, Sustainability

Guest post: Corporate Responsibility — engagement and transparency

We’re delighted to have urban and social planning consultancy Urban Affect on board as a partner. In this guest post (reposted with permission), principal Allison Heller shares some of her thoughts on CSR and social engagement.

A new year is often a time of reflection among businesses on strategic directions and corporate goals. For many firms, sustainability — environmental, social, economic — is fast moving up the agenda.

Raised regulatory standards and consumer expectations are today demanding far more from companies than an annual CSR report and a handful of associated token initiatives. The genuine integration of sustainability within an organisation may require significant organisational change and improved stakeholder engagement.

The Centre for Social Innovation — a partnership between the Universities of New South Wales, Melbourne, Western Australia and the Swinburne University of Technology — has been undertaking research on this shift taking place in the corporate sector in recent years. Researchers Gianni Zappala and Sarah Adams’ 2010 paper, The Integration of Corporate Responsibility: Evidence from leading companies in Australia & New Zealand (PDF 266 KB), considers the level of integration of sustainability principles and practices achieved to date.

The paper defines Corporate Responsibility (CR) as “understanding and minimising a company’s negative impact or footprint on society and a broad range of stakeholders including the planet and environment, its employees, the communities in which it operates and the governments which make the laws.” It utilises data from the Corporate Responsibility Index (CRI) benchmarking tool developed by Business in the Community in the UK in 2002, which is applied annually in Australia and New Zealand by the St James Ethics Centre.

The reseach found that “corporate responsibility is on the whole well integrated into the way that leading companies in Australia and New Zealand are doing business.” However it suggests that firms could improve in four key areas, including ensuring improving CR training at board level and improving the extent and quality of stakeholder engagement.

The following criteria are suggested as a measure of firms that have achieved genuine integration of CR principles:

  • Adopt a holistic conception of corporate responsibility or citizenship;
  • Have board level governance systems to oversee CR policies and practices;
  • Have senior leaders that champion CR internally and externally;
  • Have a range of structures and systems to integrate CR across the business, including risk management systems, stakeholder consultation schemes, sustainability training for managers and employees, establish and monitor key performance indicators for CR, and
  • Have an open and transparent approach to CR information disclosure (eg undertake assurance of their CR reports).

There is no denying the challenge for corporates in moving to greater levels of stakeholder engagement and associated transparency. However in many cases this is a necessary first step on the road to more sustainable, productive and profitable business. Which companies will rise to the challenge in 2011?

Business 2.0, Sustainability

Social innovation in business

I’ve been doing a lot of thinking (but clearly not a lot of blog writing!) about the idea of social innovation in a business context.  This ties into some previous thoughts I’ve posted about values and sustainability as a lens for innovation.

Two articles that I’ve come across recently expand on this concept.  The first is from Tim Draimin and focuses on shifting from Corporate Social Responsibility to Corporate Social Innovation.

In the article Tim references Michael Porter’s thoughts:

Michael Porter suggests that CSR has evolved.  He speaks about a concept he calls “shared value” or “corporate policies and practices that enhance the competitiveness of the company while simultaneously advancing economic and social conditions in the communities in which it operates.”

The thinking goes that while traditional CSR programs are often viewed as an adjunct to the core business, something that happens “to the side”, the idea of CSI is that the benefit comes from the core business itself.  (While I do have reservations about the Corporate Social Innovation moniker, I do think the concept has merit.)

This is akin to what Adam Werbach outlines in his book Strategy for Sustainability when he talks about North Star goals and aligning sustainability goals with core business activity.  To my mind this also very much aligns with the concept of “betterness models” as put forward by Umair Haque.

I was reminded of this article (which I read quite a few weeks ago now) when I came across Dan Gray’s post on delivering short-term “quick wins” for sustainability within the context of a longer-term sustainability agenda.

In his post he says:

The authenticity of your commitment stems from the materiality of your actions – i.e. beyond the thin veneer of charitable giving, cause-related marketing etc., that commitment should be self-evident in the very products and services you provide, and the manner in which you conduct your daily business.

And goes on to quote Jonathon Porritt:

In an ideal world, all actions taken by a company to enhance its own commercial success should simultaneously generate benefits for society, over and above those that come directly through the use of that company’s products and services.

There are, of course, a number of cultural drivers that make consideration along these lines important for businesses moving forward, and I think they tie into the shift we’re also seeing in relation to social technologies (social networks etc.).  A quick summary of my current thinking is that people are seeking:

  • Human connection: as organisations have grown in size and become more and more depersonalised, people are wanting more human interactions and personal response.
  • Authenticity and transparency: from greenwashing to the GFC, the market’s trust has been eroded.  People are looking for organisations to say what they mean and mean what they say.
  • Co-creation and collaboration: people are taking a more active role in developing the products and services that they use.  And if they don’t find what they’re looking for, they will often create it themselves.
  • Environmental and social responsibility: global warming, looming limits to natural resource consumption, pollution and waste; respect for human dignity with fair wages and conditions — people want to support organisations that take these issues seriously, not just as something “to the side”.

Building a business (or service/product/brand) that resonates in this new “economy of meaning” requires a rethinking of an organisation’s role in more than “market” or financial terms.  But also, I think, a re-evaluation of an organisation’s relationship with customers/constituents, stakeholders, and the environment.

And I believe that it is in this rethinking that significant opportunities for innovation can be found.

Business 2.0, Social media & networking

Ubank slipup

I was going to post my thoughts on a recent slip up (putting it politely) by NAB’s Ubank – but Laurel and Stephen and John sum it up well.

The short of it – NAB was caught astroturfing on their own “social” site. (It’s a shame Cheryl’s original post is no longer available for broader context.)

What’s strange is that NAB/Ubank have broken some of the most obvious rules of engagement – something that even a Google search for “social media guidelines” would have picked up.

I don’t really have much to add… except, perhaps, to say to Laurel “it’s not me advising them” ;) I just felt it worth reposting in case you missed the kerfuffle – lessons to be learned etc…