Posts tagged ‘Corporate Social Responsibility’
Los consumidores se han sentido normalmente impotentes ante la actuación de las grandes empresas. No tenían poder para enfrentarse a sus actividades ni tenían la capacidad necesaria para que sus protestas tuvieran el eco suficiente. Pero eso está cambiando con las redes sociales y los nuevos canales de comunicación entre empresas y sus grupos de interés*.
Incluso me atrevería a decir que estamos asistiendo al nacimiento de la “stakeholdercracy”, o un incremento muy importante de la capacidad de influencia de los grupos de interés sobre las decisiones de las empresas.
Antes, cualquier conflicto podía mantenerse dentro de unos ciertos límites geográficos, lo que permitía ejercer cierto “control de daños”, ahora esa posibilidad ya no existe debido a que internet hace que la información esté disponible y accesible para todas las personas, no importa en qué lugar se encuentren. Las empresas están más expuestas que nunca a las reacciones y las opiniones de los grupos de interés, y estos tienen más medios que nunca para poder ejercer presión e “imponer” sus demandas a las empresas.
La nueva situación es buena para empresas y grupos de interés. Es buena para estos porque el poder de va a desplazarse de las grandes corporaciones hacia los grupos de interés, equilibrando una balanza que hasta ahora ha estado demasiado inclinada hacia los intereses de las empresas, sin tener en cuenta los intereses de las otras partes afectadas. Igualmente, es beneficiosa para las empresas porque estas se van a ver obligadas a prestar más atención a las demandas y expectativas de los stakeholders, con lo que las empresas van a tener un análisis más certero de su entorno y van a descubrir nuevas oportunidades de negocio que antes habían pasado desapercibidas.
Veamos el ejemplo de tres empresas que han debido cambiar sus actividades debido a que los impactos producidos han sido denunciados por los grupos de interés:
- ZARA, del grupo español Inditex, se ha comprometido a eliminar el uso de sustancias químicas peligrosas de todos sus productos después de una campaña de Greenpeace en los medios sociales. Ello ha sido posible gracias a las firmas y el apoyo de miles de personas a través de los medios sociales, algo que hubiera sido mucho más difícil hace unos años.
- La empresa bananera Dole Food Company ha sido denunciada por un bufete de abogados de Seattle declarar que lleva a cabo políticas de responsabilidad social corporativa mientras al mismo tiempo le compra plátanos a un proveedor guatemalteco acusado de destruir el medio ambiente. Tanto si se demuestra que esta denuncia es cierta o no, Dole tendrá que defenderse frente a una demanda realizada muy lejos de donde el supuesto impacto ha tenido lugar. Este tipo de casos no serían posibles si la información no estuviera tan disponible como lo está ahora gracias a internet.
- La cadena española de televisión Telecinco se ha visto obligada a retirar una demanda recientemente. Esta demanda se había planteado contra el impulsor de un boicot a uno de sus programas de televisión en el que se habían hecho entrevistas de dudoso gusto y ética profesional. La cadena tuvo que retirar la demanda después de una campaña lanzada a través de change.org. Este es un ejemplo claro de cómo los consumidores pueden canalizar sus protestas, no a través de grandes ONG como Greenpeace, sino a través de peticiones individuales impulsadas gracias a los medios sociales como Facebook o Twitter.
Esta situación de “democracia de los grupos interés” no va a cambiar y va a seguir inclinando la balanza hacia los stakeholders. ¿Qué es lo que pueden hacer las empresas? Básicamente solo tienen una alternativa: Integrar las demandas de los grupos de interés en sus estrategias, anticipando estas demandas y adoptando una posición más proactiva.
Esto solo puede hacerse aprovechando los nuevos canales de comunicación con los stakeholders y realizando un análisis exhaustivo de la cadena de valor de la empresa. Eso les ayudará tanto a minimizar riesgos como a detectar oportunidades de negocio a través de la escucha activa de las expectativas y demandas de los grupos de interés.
¡Cuidado empresas, el pueblo tiene el poder!
*Un grupo de interés es todo aquel que se ve afectado directa o indirectamente por las actividades de una empresa.
June 12th and 13th in Berlin. Block your diaries these days for the first international conference called “Networking for Better Corporate Social Responsibility Advice for Small and Medium Sized Enterprises”, to which I have the honor to be invited, along with other 99 CSR consultants. This conference, funded by the European Commission, will be a forum for experts from all over Europe, specialized in sustainability in small and medium enterprises (SMEs). There will be discussions about how to provide better advice to European SME’s, and how we can contribute to better sustainability strategies in European SMEs.
CSR consultants are already sharing views via social media more and more often. However, it’s what SMEs do in terms of sustainability what is missed. Most often it’s big corporation language.
Consultants can act as a bridge between SMEs, exchanging experiences, know-how and points of view. This is the only way that”small” CSR best practices will be known not only in small, local circles, but also in wider platforms where they can be used by other organizations. A networking event like this has many challenges to face:
- Spread the news about CSR best practices in SMEs. Usually it is bigger corporations’ programs the only ones that get in the picture, leaving aside useful learnings and experiences made by smaller companies. The path towards sustainability for a SME can have completely different challenges and motivations. Very often what is good for a MNC is not necessarily good for a SME.
- Create a “best practices database” where both SMEs and consultants can contribute and profit from. Unfortunately, very often brilliant initiatives with great benefits have a limited audience. They should be accessible through this platform.
- European CSR needs to happen at smaller scale, or it won’t happen at all. According to the European Commission, “SMEs provide two out of three of the private sector jobs and contribute to more than half of the total value-added created by businesses in the EU”. European CSR programs have to take this into account if they really want to succeed. SMEs need an environment where they feel comfortable and free to discuss how they manage their CSR and sustainability strategies. This conference should be this ideal environment.
- Share, optimize, improve existing initiatives. For instance, there are dozens of self-diagnose tools that remain known only to few people and companies, mainly because they are local initiatives, or because they don’t have the proper forum where they can be analyzed and discussed. These initiatives should be shared, compared and complemented in order to avoid duplicities and create synergies.
- Find the best ways to help smaller companies become part of a sustainable supply chain. In some cases sustainability comes top-down: First, multinational companies decide to adopt a sustainable strategy and, later on, they demand the same from their suppliers (often SMEs). Small and medium businesses need to be prepared for that.
- Simplify things for SMEs: Speak their language, use their scale, be one of them.
- Turn CSR benefits into real value. Explain CSR to SMEs by using examples that bring added value to their activities. Don’t be abstract, get specific, talk about value creation.
- The conference should definitely go beyond consultant networking and facilitate networking between SMEs as well.
- Help companies find new businesses opportunities that are hidden behind the curtain. Tear this curtain down and help SMEs discover a whole new world of green, sustainable activities.
- The conference should prepare the shift from an economy based of the production of stuff to a new model based on added value and more services.This applies as well on SMEs.
Stay in tune, I will keep you posted!
With 20% votes, this is the main result from the poll that I published some weeks ago, and also my humble personal opinion. The rest of participants voted for options that could actually be considered as benefits that lead to the main one, namely:
- 18% think that CSR make smaller businesses more suitable to be part of the supply chain of conscious clients. As Jill Poet states, supply chain issues are becoming more and more important, and it is the way how sustainability can spread top-down, from bigger clients to smaller suppliers. CSR even opens the door to public contracts, especially now that the EU is emphasizing on sustainable criteria for public procurement.
- 14% voted that a sustainable strategy allows to optimise the use of resources, such as energy, etc. Here I would not only include energy costs but also transportation costs, logistics or office material.
- Also 14% think that CSR is a way to differentiate from competitors, and in uncertain times like these, where competition is rough and SMEs have to struggle every day, CSR can be the added value that is required to excel.
Intentionally, I didn’t include philanthropy, donations or any kind of sponsoring so maybe the poll was a little biased. Now I am curious about what would have been the result if I had included these options, which personally I do not consider a proper sustainability strategy.
However, I am surprised to see that the option connected with CSR as a self-knowledge tool (CSR to manage risks) was not picked by more participants, only 10% voted for it. Maybe because CSR as introspective analysis is more useful for complex structures, such as bigger corporations?
Last but not least, it was a little discouraging to see that CSR as gate to new products and services only got 6% of the votes. Are we really aware of the fact that sustainability can actually allow a company to reshape its portofolio? All kind of companies, not only SMEs, can develop sustainable goods addressed to certain market niches unexplored before. This is something we need to stress since I think it is an important benefit from CSR for SMEs.
I have to agree that CSR is the best strategy to survive in today’s changing world. and maybe it is so because of all the reasons stated above.
Thanks everyone for participating!
- Sustainability is for big companies
- Sustainability is too expensive
- Sustainability requires too many resources
- Sustainability is marketing, we cannot afford marketing campaigns
- We are far too few people, we don’t need social responsibility
These are some of the opinions I have to counterback when I explain sustainability to friends, relatives or even owners of small businesses. Most of them look at me skeptical and surprised. Their looks say “Small businesses have enough to do trying to survive in the current situation, they dont have time to think about social responsibility or sustainability”. However, the expression on their faces changes as soon as I start talking about the benefits of a sustainable strategy for a SME. SME are in fact open for CSR, as I explained in a previous post.
Which one is the most important benefit for a SME that engages in CSR/Sustainability? Take the poll!
Last November I had the honor (and the pleasure) to participate at the very first GRI-certified training on stakeholder inclusion. It was conducted by Niels Ferdinand, director of BSD Consulting Spain, and it took place at the Madrid Chamber of Commerce.
As I wrote in my previous post, stakeholder mapping (and prioritisation) are very important steps on a company’s road towards sustainability. It gives a lot of insight, as well as orientation about which should be the points where a company needs to focus.
What is stakeholder inclusion? It’s the process by which you start a constructive dialogue with the groups affected by the impacts of your company. This process will lead to solutions concerning matters that are relevant for your company and your stakeholders, thus guaranteeing the sustainability of the enterprise in the future.
There are a couple of tips that you should follow if you want to have a fruitful dialogue with your stakeholders. The most important ones are:
- You should be very clear about the goals of the proccess. Also, you should be very clear about what will NOT be under any circumstance a matter of discussion. This has to be properly communicated to the stakeholders prior to starting the process. This is to avoid the rising of false (and potentially dangerous expectations) from the stakeholders.
- The way of dialogue will vary from stakeholder to stakeholder. Your company should decide on the best way for each stakeholder. Dialogue with customers will probably take place through social media, whereas inclusion of NGOs can happen at discussion rounds or joint projects (also depending on how deep the involvement desired from the stakeholders is).
- Do not forget to communicate always with your stakeholders, at the start, during and (most important) at the end of the process. It’s crucial that your stakeholders are informed at every stage, espcially at the end. Just imagine how frustrated your customers, your employees or local NGOs could be if they are not updated about the outcome of a process they have dedicated effort and resources to.
Stakeholder inclusion is a very valuable tool, but only if companies go along with the process till the very end: from first consults to communicating final results, otherwise, it’s just wasted time and resources. Clearness, honesty and communication are a must.
If you are interested in staleholder inclusion you might want to check the new AA1000SES standard on stakeholder inclusion that “provides a principles-based, open-source framework for quality stakeholder engagement and supports the AA1000APS Principle of Inclusivity. It can be used as a “stand-alone” standard, or as a mechanism to achieve the stakeholder requirements of other standards, including GRI G3 and ISO 26000″.
Greenwashing! How often have I heard this word every time I speak about corporate social reponsibility (CSR)? The only reason for this reproach is that too many companies have used CSR initiatives in order to improve their image, as a smoke curtain to hide unsustainable activities.
There are a lot of examples where marketing is a way to make goods and services look greener. Charitable activities are designed by marketeers with the sole purpose of washing the image of a company. Or maybe suddenly the packaging of some article gets greener (the colour) without actually getting greener (the article itself).
Of course, we all agree that good CSR is everything but just a marketing tool. CSR is a business strategy with a holistic view that does not only concentrate on donations, sponsoring or cause marketing. It goes well beyond that, and the marketing department should be an ally, not an enemy.
Whereas sustainability* should not be considered as a marketing tool, marketing can (and has to) play a very important role when developing and communicating our CSR strategy. Why and how?
- CSR is a task of all departments, including the marketing department. Fortunately, those companies where CSR depends from the maketing department are becoming rare. More and more often, CSR orginates from the board of directors and is spread throughout the company via the rest of departments, including marketing.
- External marketing: If you are good, why not tell it to the rest? Maybe other companies can learn from your sustainable strategy. Marketing tools can help you spread the word. If you don’t show off you might be missing the opportunity to find new investors or the possibility to enter new markets. Market your CSR strategy, but don’t let it look like publicity.
- Internal marketing: When it comes to developing a CSR strategy, getting the involvement of employees is probably one the most important things. Without employee involvement, nothing will work. Here is where the marketing department becomes especially relevant, supporting other departments to “sell” the idea internally.
- Furthermore, the marketig department, deeply involved in product development (and product responsibility), has to be part of the CSR strategy from the very beginning.
Are you aware of other initiatives, activities where the marketing department could do a lot for our CSR strategy? Please share!
*The terms sustainability and CSR are used interchangeably in this post
I am more and more convinced that being a sustainable and socially responsible company revolves around dealing with its own impacts. Recently I read a very interesting article on The Guardian: “Measuring social performance is difficult but essential”.
This article addresses a very important issue: Social impacts are relevant and we need to measure them properly.
An example why it is important: As long as negative social impacts can affect a company’s stock value (among others), they need to be measured, managed and reduced. Not only because of the negative effect on our image or on our reputation, but because it is threatening to the very same sustainability and survival of the company.
I agree with the writer of the article about the fact that measuring social impacts is very challenging. It is difficult to set the boundaries and use a valid method. It is maybe one of the weaknesses of this approach, but different groups and institutions are working out a methodology. If we cannot identify and asess our impacts, then it will be difficult to know where we we stand and where to start.
The other weaknesses are two very important points that need to be considered carefully. One of them is, as it is pointed point out in the article, product responsibility. This is a crucial issue, maybe the most visible part of the social impact of a company. Is your product harmful? How harmful? Are you doing anything to limit/reduce that damage? If the product is harmful no matter how you use it, do you have a strategy to replace it by something else? This is an introspective exercise that companies have to do. And if they do not do it themselves, they might be forced from the outside sooner or later (authorities, social media, NGOs), but then it will be too late. An honest reflection on what your company does is needed.
Supply Chain Impacts
The other weakness is that, too often, we forget that social impacts (both positive and negative) do not end within the companys borders. It is necessary to audit/inventory all kind of social impacts along the whole supply chain. If we concentrate just on the social impact of the final product or service, we are considering only the top the iceberg. A food company might undertake all kind of steps to reduce trans-fats, promote healthy nutrition and limit sugar content in order to reduce its negative social impacts. All these efforts are in vain if our suppliers use bonded or child labour. Therefore I think that social impact auditing along the supply chain should be a must.
Last but not least, all kind of efforts, activities, charities etc are sometimes not enough to compensate for negative social impacts. This is the case of PR/Marketing campaigns of companies from controversial sectors. But then we are not talking about social responsibility, but about greenwash and smoke curtains.
There is this cliché that identifies Corporate Social Responsibility CSR with large, multinational corporations. Why is this so? Mainly because of following reasons:
- Many initiatives driven by small and medium enterprises (SMEs) do not have enough resonance, they stay in their own small circles.
- Most SMEs are not aware that they are already carrying out CSR measures of some kind.
- Last but not least, usually SMEs feel lost and do not know how and where to start implementing a CSR strategy. The jargon of CSR is often too entangled and complex for them.
However, not only SMEs can strongly benefit from a sustainable strategy, but sustainability is often part of their company culture, even if they are unaware of it. And one can not fully benefit from something you are not aware of.
The new ISO 26000 standard highlights the fact that it is a guidance addressed to all kind of companies, including smaller ones. However, no matter how useful this document will be, the smallest ones of the class won’t help feeling lost and lonely in the process. In Spain there are several initiatives to support the implementation of a CSR strategy in small and medium businesses:
- Transparencia is a program that has recently been launched by the Catalan chambers of commerce. Here, large companies, such as DKV, Mango or La Caixa act as mentors of smaller businesses (mainly their suppliers), guiding them through the process of becoming socially responsible. This initiatitive is supported by the Global Reporting Initiative.
- RS PYMES (PYMEs is the Spanish translation of SMEs) is a diagnose tool to check if a small company is socially responsible according to 7 different criteria: governance, human rights, environment, fair operating practices, customer issues, community involvement.
- In the NGO I am currently cooperating with, Economistas Sin Fronteras (Economists Without Borders), we are developing a training framework for small and medium companies (also including microenterprises). This project I am proudly leading aims to cooperate with towns and their local development agencies in order to reach SMEs more easily. Local administrations are usually felt as “closer” by citizens and small companies and maybe it’s also the best way to “teach” them the advantages of running their businesses in a more sustainable, socially responsible way. I will keep you updated about this one!
Are you aware of other initiatives especially addressed to SMEs? Why is it allegedly so difficult for SMEs to get the best out of CSR? Or is it not so difficult after all?
“Spanish people are passionate, creative and they tend to improvise”. These are clichés that people use to describe the Spanish way of living. But, do they apply also to “CSR the Spanish way”?
In the last report issued by the Reputation Institute, Spain ranks high not because of our economic model, the quality of our products or the good reputation of our companies, but thanks to our lifestyle and our cultural heritage.
Could CSR change this perception? Could CSR help us change our model, creating competitive advantages?
First, let’s have a look at the Spanish economy and its perspectives. With an unemployment rate of 20% and a public deficit of 10%, our economy badly needs to transform a model too long based on tourism and the building industry. Any initiative to save money and resources will be welcome. Therefore, environmental sustainability (energy cost reduction) and employee motivation (higher productivity) as part of a wider CSR strategy will find receptiveness.
In the last 15 years the world has seen the rise of Spanish multinational corporations (MNC) spreading all over the world, especially in Latin America and Europe. Although the contribution of tourism and construction is still remarkable, energy, fashion retailers, banking and telecommunications are the new rising stars of the Spanish economy. Everybody has heard of, NH Hotels, Inditex (ZARA), Telefónica or Banco Santander:
- Grupo Inditex. This Spanish fashion group is featured in the Dow Jones Sustainability Index (DJSI). It comprehends international retailers like ZARA or Massimo Dutti. Inditex faces great challenges such as how to control their supply chain or reduce waste and energy costs.
- NH Hotels was the first Spanish hotel chain to join the International Tourism Partnership (ITP), a global association integrated by leaders in the travel and tourism industry.
- Telefónica is one of the most important telecommunication companies in the world. It has just released a new sustainability report at the Cancun summit, and it’s the leading telecommunication company in the DJSI.
If we have a look at the last report issued by Forética, a Spanish multistakeholder organisation supporting and promoting CSR, here are some important conclusions, just to name a few:
- 6 out of every 10 companies knows what CSR means and takes
- Also according to this report, 84% of companies think that CSR will remain relevant or even become more important in the future.
- 8 out of every 10 companies consider that CSR contributes to cost reduction
- 7 out of every 10 think it can contribute to profit generation
- 6 out of 10 companies see CSR as a way to attract investors and fundings
Another report issued by Fundación Alternativas shows interesting results:
- 55% of those polled think that, despite the current crisis, companies will not give up their CSR efforts, and even 24% consider that companies will increase their CSR activities.
CSR Made in Spain presents a major dilemma: whereas some people think that CSR is an extra cost that makes the current, uncertain situation even worse, other think that CSR will strengthten their position and help them keep their financial position under control.
Now, let’s go back to the clichés. Is CSR Made in Spain really passionate, creative and improvised?
Ok, this cliché about us Spaniards might be right and could be extrapolated to CSR Made in Spain: 22% of the European companies reporting according to GRI standards are Spanish, which is a high percentage given the weight of the Spanish economy.
According to the Dow Jones Sustainability Index 2009, 4,44% of all companies featured in the index are Spanish, with some of them leading their respective sectors, such as Telefónica.
Definitely, Spanish corporations, especially MNCs, are handling CSR with passion.
On one hand, Spanish corporations are following international standards and not creating their own frameworks. As I mentioned before, most of the Spanish companies publishing sustainability reports follow GRI standards.
On the other hand, small and medium enterprises (SMEs) need to be creative about the subject, mainly to find ways to avoid costs and complex procedures. There are several examples of creative CSR, one of them is this project of collaborative CSR called ResponsHabilizate. Here, people and small business have published their own ideas of how SME’s could easily implement CSR and be more sustainable.
Furthermore, creativity is a must when explaining CSR to people and companies, especially to SME’s. Here is a nice way to represent the path towards corporate responsibility, neatly presented as a subway map. Explaining CSR to people and SMEs is one of the big challenges of CSR Made in Spain.
Companies are not improvising, public institutions seem like they are. Spanish CSR is starting to have a regional touch, a local flavour that sounds delicious but actually smells more like improvisation. Spain is administratively divided into 17 autonomous regions with legislative capacity. Many people fear that each of those regions will be tempted to regulate the subject in an uncoordinated way. In fact, two regions have already passed a law to support voluntary CSR.
Meanwhile, the National CSR Council (CERSE), created back in 2009, could finally prove as useful. On February 15 the new Law of Sustainable Economy was approved by the Spanish Parliament. This new law encourages companies with more than 1000 employees to issue an annual Corporate Social Responsibility and Sustainability report. Good news at last?
There are several challenges that CSR Made in Spain is facing now, some of them are common to other countries while others are country-specific:
- Since SME’s are so important for the Spanish economy, it’s crucial to involve and support smaller businesses. Bigger corporations are familiar with CSR and sustainability, while SME’s are too often giving up their CSR plans due to cost reduction and the complexity of the most common CSR frameworks. According to Forética, one out of every three SME’s had to put their CSR strategies on cold ice, at least until the crisis is over.
- Spain should develop a national CSR strategy, like Germany has done, avoiding regional, uncoordinated approaches. A little support from the government (from national to local authorities) could help SMEs go a long way
- Put CSR into value. This is a challenge that CSR faces everywhere. However, in the current Spanish crisis it becomes more and more important to translate the advantages of CSR into profit.
- CSR Made In Spain seems too focused on reporting (GRI & Global Compact), forgetting about the message and the overall strategy.
- If we want to make CSR attractive and get support from the public opinion, we have to explore the possibilities that CSR offers in terms of resource optimisation and job creation.
Again, in a situation of 20% unemployment and 10% public deficit, and despite the fact that the national government should lead the process, the role that Spanish companies can play should go beyond business. By reinforcing their CSR strategy they can and should play a very important role in the Spanish recovery.