First of all, it is necessary to understand what CSR is. CSR stands for “Corporate Social Responsibility”. The guiding principle is that economy is a global network of mutually depending influencing factors. The main focus of a CSR-strategy is to protect people (employees of the company, employees of suppliers, the society in general) and the environment from being harmed by the own company and (ideally) all business partners short-term and long-term. By identifying your biggest gaps, you can improve much more efficient. That helps to establish a sustainable business.
What does sustainability mean?
The Oxford English Dictionary defines sustainability as “The ability to be maintained at a certain rate or level“. It is the “Avoidance of the depletion of natural resources in order to maintain an ecological balance.“ Sustainability means a future-orientated growth.
Who cares about my CSR-strategy?
In the last decade, stakeholders, (end-) customers, business partners along the supply chain and independent organizations are more and more demanding proof from companies for awareness regarding a sustainable development and fair business practices. A study made in 2015 by Nielsen asked 30,000 customers from 60 different countries, if they are willing to pay more for a product offered by a company which is taking social responsibility. In 2013, 50% agreed. In 2014, 55% and in 2015 even 66% consented. This trend is assumed to be still rising. Therefore, this is not just a thing to satisfy the 1% environmentalists among the customers, but their majority.
How can I quantify my efforts?
An important tool to quantify the effort in a unified way is a Corporate Carbon Footprint. This helps to calculate an important KPI (key performance indicators) of environmental assessments: the overall emitted amount of CO2. Against the background of global warming, CO2 is one of the most climate-relevant factors. With this parameter updated every year, a benchmark of the own performance can be created. Also, concrete performance goals (for example “reducing CO2 emissions by 5% every year”) can be set and communicated as part of any CSR-strategy.
A CSR-report is the key communication tool for any CSR-strategy. There are several approaches on the market offering a standardized, comparable format. The two most common report standards are UN Global Compact and GRI. They provide a framework to report about your activities for several matters of interest like child labor, human rights, environmental friendly production, etc.
The biggest upside is the opportunity to compare your yearly performance based on KPIs.
What are the benefits?
A study by Eccles, Ioannou & Serafeim that was published in 2009 and observed the long-term performance of 180 companies. 90 of them had established a sustainability-management, 90 did not. The conclusion of the study was, that a CSR-strategy has a huge positive long-term effect on companies, strengthening their performance over time. Also, the trust in brands and the reputation of a company is a key tiebreaker for customers.
Furthermore, your customers can assess the risk you hold basing on the information you give them. The more transparent a company is, the more trustworthy they are from a business point of view.
What are the first steps for starting with a CSR-strategy?
- At first, an assessment of the status quo is necessary. Are there already efforts that are addressing CSR-topics but originally rooted in different departments like H&R, Marketing or Purchase? What are the goals you want to achieve? What are the topics with the biggest impact?
- Then, a CSR-roadmap is helpful. What should be addressed first? Who is responsible? The UN’s 17 Sustainable Development Goals are a helpful framework to make sure that every important topic is examined properly.
- When those things are addressed, a Carbon Footprint is needed.
- Basing on the Carbon Footprint, a carbon disclosure strategy for the future can be developed.
- For very motivated companies, establishing Science Based Targets might be considerable. Those are scientific calculation methods developed by the United Nations of how much CO2 every individual company is allowed to emit each year in order of keeping global warming under 2°C.
- Finally, a form of communication should be decided. For beginners, the UN Global Compact offers an easy start for your CSR-communication with manageable effort and comparably extensive result. Big companies are better advised addressing the more extensive GRI
DFGE offers a helping hand for every stage of your CSR-strategy. We support you establishing sustainability in your company, help with Carbon Footprint accounting, guide you through different assessments and offer different services for sustainability reports.
If you have any questions about CSR in general, contact us.
Phone: (+49) 8192 99 7 33-20