The value of Corporate Social Responsibility

Published on
May 15, 2014

Corporate Social Responsibility, or CSR, has emerged as an inescapable priority for organisations.

According to Harvard Kennedy School’s Corporate Social Responsibility Initiative, “There has been a sharp escalation in the social roles corporations are expected to play”. But, this expectation does not need to be seen as a burden. If approached in a considered and strategic way, CSR can be a source of opportunity, innovation, and competitive advantage for your organisation.

In business today, it is widely understood that CSR can deliver reputational and financial benefits. A 2009 McKinsey Global Survey found that most executives believe CSR programs do indeed create shareholder value, with ‘maintaining a good corporate reputation and/or brand equity’ considered by more than three quarters of respondents as the most important way CSR initiatives improve financial performance. This was followed by ‘attracting, motivating, and retaining talented employees’.

So, how can organisations generate the most value from their CSR activities?

Various articles published by CSR experts Porter and Kramer in the Harvard Business Review indicate that an organisation’s CSR initiatives should be guided by whether they present an opportunity to create ‘shared value’ — a meaningful benefit for society that is also valuable to the business. Creating shared value should be viewed as a long-term investment in a company’s future competitiveness — just like research and development. In addition, organisations should pursue initiatives that are a ‘good fit’ culturally, logistically, and strategically, as “the more closely tied a social issue is to a company’s business, the greater the opportunity to leverage the firm’s resources — and benefit society”.

In a previous Rowland Strategies article Rowland Chairman, Geoff Rodgers, spoke about the importance of linking CSR with business strategy and making sure it is “authentic and based on achieving real and tangible social outcomes — not purely to benefit the business reputation and make people feel good”.

At Rowland, CSR has been a focus for our business right from inception. We support various charitable organisations in a number of ways, including financial contributions, provision of pro bono communication services, and staff rolling up their sleeves and getting involved.

For the past four years Geoff has been personally involved in the Vinnies CEO Sleepout — sleeping rough for a night to raise awareness and funds for the homeless and those at risk of homelessness. This is in addition to Rowland staff making personal donations and providing pro bono communication support to bolster the success of this great event.

Geoff’s visible leadership and the hands-on opportunities for staff to be involved are key elements of what we see as effective CSR initiatives that deliver personal, professional, and financial value to the organisation.

Integrating business and social needs takes more than good intentions. It requires strong leadership, a strategic approach, and accountability and reporting.

If you are looking for a way to evaluate and maximise the potential benefits of CSR, the following questions should help you get started:

  • Does your organisation engage in CSR?
  • Are your CSR initiatives integrated into your business strategy?
  • Do your CSR initiatives create shared value — benefit both the organisation and society?
  • Are your executives visible and vocal advocates for your CSR initiatives?
  • Are your employees engaged — emotionally and tangibly — in your CSR initiatives?
  • How do you evaluate the effectiveness of your CSR initiatives?

References

Harvard Kennedy School’s Corporate Social Responsibility Initiative. (2008). The Initiative: Defining Corporate Social Responsibility. Available at: http://www.hks.harvard.edu/m-rcbg/CSRI/init_define.html

McKinsey & Company. (2009). Valuing corporate social responsibility: McKinsey Global Survey Results. The McKinsey Quarterly. February 2009. Available at: http://www.mckinsey.com/insights/corporate_finance/valuing_corporate_social_responsibility_mckinsey_global_survey_results

Porter, M.E. and Kramer, M.R. (2006). Strategy and Society: The Link Between Competitive Advantage and Corporate Social Responsibility. Harvard Business Review. Available at: http://hbr.org/2006/12/strategy-and-society-the-link-between-competitive-advantage-and-corporate-social-responsibility/ar/1

Porter, M.E. and Kramer, M.R. (2011). Creating Shared Value. Harvard Business Review. Available at: http://hbr.org/2011/01/the-big-idea-creating-shared-value