Embedding CSR in business strategy
When it comes to societal and environmental issues, is business part of the problem or part of the solution? According to campaigning organisation Business in the Community (BITC), it should be the latter.
At BITC’s annual Leadership Summit last month, hundreds of business leaders explored how organisations could forge new contracts with society to rebuild shattered public trust.
“Without responsibility being truly built into the DNA of companies, trust in business will continue to plateau,” said BITC CEO Stephen Howard. “It is time for business leaders to think differently about how they create the right culture within their business and the practical steps they can take to turn values into action.”
But what are those practical steps and how can companies take them beyond ‘greenwashing’? BITC members suggested long-term partnering with local schools and colleges, seconding staff to work in the community and investigating their impact on the environment. Anglia Water’s CEO Peter Simpson said it shouldn’t just ?be “people in green wellies” ?talking about the environment; businesses need to engage too.
Truly embedding CSR into the company strategy through integrated reporting (IR) is one way to ensure ‘values’ are not just empty, cliché-ridden promises. While current financial reporting via quarterly and annual reports is a byword for short-term thinking, IR is more sustainable and holistic. During a panel debate about IR at the summit, National Grid CEO Steven Holliday even suggested scrapping quarterly reports.
An IR puts the ‘purpose’ of a business front and centre and that purpose “can’t just be to make money”, said Saker Nusseibah, chief executive of Hermes Fund Managers. “The purpose must be to do good.” The challenge, he added, is getting investors to see that a 30-year plan is more useful than one of three years.
For Holliday, however, it’s less about “doing good”, which is easy to dismiss as “soft and fluffy”. “This is about creating long-term, healthy, sustainable businesses,” he said. “We need to engage our employees today and attract our employees tomorrow.”
Rewarding the right behaviour and incentivising sustainable thinking is another area HR needs to consider. Holliday said: “You can’t talk the talk without aligning everything else to support it, to convince people, it’s not an initiative, it’s the way we do business.” At National Grid, incentive schemes are aligned to things beyond the financial, such as impact on the environment, work in the community and diversity.
Measuring all this can be tricky. Helena Morrisey, CEO of Newton Investment and founder of the 30% Club, which campaigns to get women on to company boards, said soft metrics are not meaningless. “It’s better to hear from a chairman that conversation is better and the dynamic has changed [because of diversity],” she said. “That doesn’t make it weak or fluffy. You can have change without having the numbers argument.”
Given the debate over the CIPD’s Valuing Your Talent initiative, that could be music to many an HR director’s ears.
There's still time to enter a CSR and HR initiative into the 2014 HR Excellence Awards. Nominations have been now been extended to 28 March 2014.