CSR: A Survival Tool For SMEs

CSR is a survival tool for small and medium enterprises (SME).

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!

CSR: What’s In For Small Businesses?

Here are some prejudices concerning CSR/Sustainability and Small and Medium Enterprises (SME):

• 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!

ISO 26000 Tips: First, Your Stakeholders

Where to start? Which steps should I take? How do I begin?

These are some of the questions that most companies, especially small and medium ones, pose themselves when they consider implementing a sustainability strategy. Of course, other questions will arise as well, especially related with costs and payback. However, doubts about how to start the process and which are the first steps that need be taken are some kind of existential doubt that always come up.

The guide ISO 26000 is a very useful tool for small and medium entreprises (SME) willing to commit themselves to corporate sustainability and responsibility. It offers a variety of hints on how to deploy the process.

One good piece of advice from the ISO 26000 is that a company should know who its stakeholders* are, as a first step prior to identifying relevant matters that need be addressed by the company.

*Basically, a stakeholder is everyone affected by the activities of our company: suppliers, employees, customers, shareholders, NGOs, the local community etc.

What is our reach? Which stakeholders are within this reach?

Identifying its stakeholders becomes the first milestone of a company’s way tos sustainability. Knowing who is affected by our impacts will let us know which issues need our special attention.

It requires a certain exercise of introspection by which we will analyse our internal and external relationships, as well as the impacts of our activities on others.  This is a great self-knowledge tool that will not only help us set priorities, but also detect new business opportunities that might have been ignored so far.

How can we identify our stakeholders?

• We can check our activities by department, identifying each departemt’s stakeholders. For example, our purcahsing department has relationsips with suppliers, our sales department with customers and so on.
• We could also analyse our products life cycle, from product design to market launching and waste management, and considering as well those stakeholders affected at any point along the supply chain (maybe hidden in some remote place far away).
• You can also check how the company dealt with this issue in the past and build on that.

The advantage of stakeholder mapping as a step prior to implementing our sustainability strategy are the following:

• It is the best way to know where we are and whom we are playing with in our organisation.
• Identifying our stakeholders and being ready for their demands will open the gates to new business opportunities.
• Stakeholder mapping helps prioritise and focus on those groups of particular relevance for our organisation. After all, our resources are limited, especially if we are a SME, and we need to focus on the essential.
• Stakeholder analysis is the best way to avoid ignoring groups such as NGOs or communities that, even though they are not formal part of our organisation’s circles of action, are nevertheless affected by our activities.

Definitely, stakeholder mapping is one of the most valuable tips from the guide ISO 26000. It is probably the first step every company has to take on its roadmap towards corporate responsibility, right after having defined its strategy, and probably overlapping with other important steps, such as finding which issues are relevant to our company.

Marketing and Sustainability: A Dangerous Liaison?

If your sustainability looks like this, hire a new consultant!

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

Teaching CSR

High Street / Calle Mayor of Palencia - Image via Wikipedia

Last week I visited my family in Palencia, a lovely, small, provincial town in Castilla y León (Northwestern Spain). During my trip, I had the chance to know the regional centre for environmental educative resources, PRAE. It was fantastic to see how they use different resources so that children and grown-ups get familiar with environmental issues. They also have different cooperation programs with schools to teach kids the first notions of sustainability.

During my visit there was a group of primary school girls and boys listening to how they can contribute to reduce global warming. Everything was being explained in their own language, and the kids were really interested, with their eyes and their ears wide open. I bet that they tried to transmit the message to their parents when they went back home: “Mom, we should replace that light bulb, it uses too much energy”.

This initiative of teaching sustainability, also called environmental education, is the best way to make children familiar with issues like global warming or renewable energy.

And what about being socially responsible? I have always thought that responsible consumption and responsible business are two sides of the same coin. The sooner we start to “create” responsible citizens, the more chances we will have that these future business people will be socially and environmentally conscious.

Most school programs (mostly in secondary school) already include notions of of economy and business. Why not include sustainable and responsible business, as well as responsible consumption? Now that’s something were governments could really do something to promote sustainability.

Are you aware of school programs (primary or secondary) were corporate social responsibility is included as a curricular activity, maybe under subjects such as economy or civic education? Do you know any initiative to teach children or teenagers the benefits of sustainable business?

The responsible children of today will be the responsible business people of tomorrow.

Center for Environmental Education, Castile and León

Barcelona, European Green Capital?

The new European Green Capitals for 2012 and 2013 will be announced at the end of October. One of the candidates is Barcelona, the city where I live. Is Barcelona up to the high standards set by Stockholm (European Green Capital 2010) and Hamburg (European Green Capital 2011)?

The first impression is NO, Barcelona can be a lot of nice things, but definitely not a green city. But, what is a green city anyway?

Let’s have a look at some of the selection criteria to be a Green Capital:

• Local contribution to global climate change. It would be very interesting to know how Barcelona is contributing to reducing its carbon footprint, not only by cutting down the emissions “in” the city, but also the emissions caused outside the city (for example, when goods are imported from very far away). Only by reducing the overall carbon footprint we can say that a city is sustainable and contributes to fighting global climate change.
• Local transport. The local transportation system is very good and covers practically all the metropolitan area with subway and commuter trains. However, too many cars are still in the streets. Parking on the outskirts should be possible, as well as some kind of tax to discourage people from using their cars. Barcelona has an advanced bike sharing system called bicing. This system has become very popular and, thanks to it, bicycles have become a familiar sight in a city where cars are still the kings of the road. Unfortunately, the bike lane system has not been improved accordingly, and bikers (me included) still feel very unsafe riding on the road.  Car restrictions and bike lanes are definitely things to improve, very urgently. Improve intermodal transport as well (bike+subway+train).
• Green urban areas. In Stockholm, 95% of the population lives close to green areas. Obviously, that does not happen in Barcelona, although that depends on the definition of a “green area”. Unfortunately, Barcelona has got no room for more parks; the city is packed with buildings. But the parks already existing should be more protected. Good news: the mountain of Collserola will be declared Natural Park soon.
• Nature and biodiversity. I hope that the declaration of Collserola as Natural Park will mean real protection for the biodiversity of the city, as well as provide with ecological corridors for the species. There is a lot to be done, like the interconnection of the different parks (especially in the upper town), as well as especial protection for Montjuïc (one of the hills surrounding Barcelona).

View of Barcelona from Collserola Park

• Noise pollution: This is one aspect where Barcelona really has to improve, starting with the noise pollution caused by public vehicles (waste trucks etc.) and continuing with creating a culture of quietness among citizens (also with fines, not only through advertising)
• Waste production and management are improving in Barcelona, especially waste management. More and more citizens are recycling their waste (from 20,000 tons glass in 2003 to 31,000 tons in 2009) and city campaigns are rising people’s awareness.
• Water consumption and waste water treatment. Well, this is a point where Barcelona can be really proud. Water consumption per capita is one of the lowest in Europe, thanks to campaigns and citizens’ change of attitude. Water consumption per capita was only 116 litres per person and day, compared to 503 in New York.
• The programme of communication of environmental actions is one of the big flaws of the City’s green activities. In fact, Barcelona’s bid as European Green Capital is unknown to the main public. It’s almost an information for insiders.

One last remark: Knowing that the City has also applied for the 2022 Winter Olympic Games, how credible is Barcelona’s green bid? For me, it’s hard to believe that a Mediterranean city that wants to organise such an unsustainable winter event is at the same time bidding to be “the” European Green Capital.

Hammarby, the eco-friendly district in Stockholm

As I already mentioned in one of my previous posts, I visited Stockholm some weeks ago. Stockholm is 2010 European Green Capital and a city full of nature, water and parks.

I was very curious about the new eco-friendly district of Hammarby. This new district is the result of the urban re-designing of an area situated in the southern part of the city. This was an industrial area occupied by workshops and small factories (in many cases without permission).

The City decided to expand to the south and the district of Hammarby was the best area to do so. The requirements were set very high from the very beginning, and the new constructions were built according to the latest environmental requirements.

Re-designing a new district is something that takes a very long time, from the planning to the implementation. Many aspects need to be taken into account, especially if the aim is creating a place where people want to live according to high quality standards and, at the same time, with the highest respect to the environment.

The new district of Hammarby is impressive. It is considered as a model of urban sustainable development. Again, green and water are everywhere, which is not new in a city like Stockholm.

Civic Centre

I visited the GlashusEtt, Hammarby information centre, where hey encouraged me to walk around the district, take pictures and check the inner patios. The GlashusEtt plays a very important role as a place where citizens can look for information, and where they can get assistance concerning waste management, energy efficiency and other issues dealing with sustainability.

GlashusEtt (Hammarby Information Centre)

Waste and Energy

The buildings have been built in order to fulfill high standards of energy efficiency, and there is an advanced waste treatment system.

One of the things that got my attention was that the apartment buildings display big windows to capture the sunlight and save energy costs, which is so important in the long Swedish winter, and the not so sunny Scandinavian summer.

Some of the buildings have solar panels. Biofuel from organic waste and biogas from waste water (sewage sludge) allow that the district creates great part of the energy used, allowing a high degree of self-sufficiency (the aim is that, when the district is fully built in 2017, Hammarby residents produce 50% of the energy they require).

Furthermore, rainwater is drained into the Hammarby lake, after proper treatment, allowing it to re-join the natural water cycle.

A District Built at Human Scale

To walk through the streets of Hammarby is a relaxing experience, the district is built at a human scale and one has the impression that life happens in a continuum between the apartments and the streets. The “dividing line” between apartments and street is very blurry. People living in Hammarby can enjoy street life thanks to their gardens and community patios.

You can actually watch people in the street, basking in the sun, kids playing in the street. Hammarby is a living quarter, with shops, restaurants and small businesses.

People having a quiet, relaxing summer break

Preserving Biodiversity

The planners have tried to preserve biodiversity, by preserving an old oak wood with old trees. At first it was planned that this oak wood should be cut down, however, protests from the people could save this area, which now connects the district with its rural past.

Furthermore, in order to preserve biodiversity, the planners have built eco-corridors that cross the highway (!). This way, seeds and animals can easily cross over the highway. These corridors are actually bridges fully covered with green (trees, plants etc.)

Eco-corridor above the highway

The City Bought the Land

I think that one of the secrets of the success of Hammarby is that the City bought the land prior to proceeding with the planning and construction of the district. This prevented from speculation and makes a difference compared to other new-built areas in Europe.

Criticism

It’s hard to think that such a project could raise criticism, however there are some things that were pointed out by people I was talking to during my holidays in Stockholm:

• Transport. Hammarby District is not in the centre of Stockholm and the lake acts a natural barrier between the district and the rest of the city. Many complained that it is not easy to reach Hammarby, however, the district is well covered by bike lanes and bus lines. The new tramway that will connect Hammarby with Slussen (Stockholm downtown) will soon be working. Furthermore there is a free ferry that connects Hammarby with Stockholm every 10 minutes.
• Housing prices. Living in a place like Hammarby is not cheap. It is a fancy, new, citizen-friendly district where housing prices are high, despite the fact that many of the apartments are public property. If Hammarby becomes a district for hipsters then the model will have failed; let’s just hope it won’t be the case.
• Transition model. There are allotment gardens in one of the blocks, and some of the neighbors grow their own vegetables in the balconies or in collective areas. However ,the whole idea of sustainability and green would be much more reinforced if the district would support other ways of sustainability, such as the transition model. In many ways, Hammarby is already a place where they produce their own energy, but I think that Hammarby should do more in terms of being less dependent from food coming from outside the district, that is producing their own food (in community gardens, etc) thus reducing the carbon footprint.

My response to the Wall Street Journal article

There was an article in the Wall Street Journal earlier this week. It attacked the role of Corporate Social Responsibility in creating profit for companies. The article also questioned that companies, by promoting common good, could generate more profit.  Dr Karnani uses a series of arguments, so easy to refute, that I am very surprised they come from a university professor.

Profit is not equal short-run profit

It looks like Dr. Karnani identifies profit with short-term profit; however, the profit that ensures the existence of the company throughout the years is long-term profit. Unless Dr. Kanani has in mind only speculative business, I don’t understand why he is concentrating on the short run.

CSR is not equal philanthropy

CSR is so much more that giving money to charities. Those who think that way are narrow-minded or badly documented. CSR goes far beyond philanthropy; it is a way of managing business, creating value through improving all three aspects relevant to the company: financial, social and environmental. Creating a sound financial situation is part of a good CSR strategy, and it does not have anything to do with spending money and “giving it to the poor” (which is not a bad deed anyway).

British Petroleum

There are many examples of companies that generate profit thanks to good CSR, but maybe we should use the example of a company that is on the verge of disappearing “thanks” to the lack of proper CSR. Proper CSR reduces risk and makes it easier to manage crisis situations. Maybe if BP had taken into account all 3 aspects of a company’s bottom line (financial, social AND environmental), they would not be stuck in the current situation. The lack of proper CSR is pushing them to the verge of bankruptcy.

CSR as a competitive advantage

How does CSR create profit? There are many ways, one of them generating a competitive advantage for the company: company’s reputation is solid, investors and customers trust the company, and government and society consider the company as a reliable partner. We are talking about partnership, about corporate citizenship.

CSR creates a stable framework

Companies can not operate in an unstable environment where workers are unhappy, legal situation is uncertain, climate conditions are changing and natural resources are more and more scarce. CSR contributes to creating a natural, social and economic environment where everyone feels safe and uncertainties are lower. It’s easy to see how this will end up generating good conditions to make more profit and create more value.

Buyers are not the only customers

The company interacts with many stakeholders and all these stakeholders do have a say in the future of the company. Companies will face a brighter future if they adopt an extended concept of customer, if they go beyond the “customer as buyer” and accept that not only buyers define the future and performance of a company.  Interconnection is the key word. I am so surprised that Dr. Karnani defends a way coming right from the 19th century capitalism.

Only excellent companies will survive

In the current situation, only the best companies will survive. CSR is the best example of top quality because it pursues not only the best quality for the buyers, but also for all the stakeholders involved.  Top quality should be one of the goals of every company. Improving the relationships with everyone (buyers, shareholders, society, environment, etc) is the first step towards a better quality.

Limited resources endanger profit-making

Companies use different resources to produce their goods and services. These resources are limited. Using them in a responsible way is a tool to secure profit and create the base to generate more value. Without resources nothing works. Proper CSR will make sure that natural resources are used in an efficient way and that workers commit to the strategy of the company.

Stockholm, First European Green Capital

A view of Stockholm from Skansen

This summer I’ve spent two weeks in Stockholm, European Green Capital 2010 and the first city ever to win this award. I was aware that Stockholm is one of the greenest cities in the world: there is nature all over the place. The question was: What had Stockholm done in order to deserve this award? What great achievements, apart from being a sustainable city surrounded by water, forests and all kind of green areas?

Stockholm, a truly green city

First of all, it’s easier to be environmentally friendly when your relationship with nature is so close. Furthermore, Stockholmers have earned the title of green city during the last decades; they were able to transform a town surrounded by dirty waters 100 years ago into a place where everybody can have a bath or spend the time fishing. This has not happened all of a sudden; Stockholmers have worked hard for that, with strict regulations and sustainable measures.

I wanted to find out why Stockholm was “the” green capital of Europe, know how the city was communicating this happy news and get information on how citizens were participating in the whole event.

Haga Park

Why Stockholm?

According to the information taken from their website: the reasons why Stockholm had being designated European Green Capital 2010 included:

• the City has an integrated administrative system that guarantees that environmental aspects are considered in budgets, operational planning, reporting and monitoring.
• the City has cut carbon dioxide emissions by 25 per cent per inhabitant since 1990.
• the City has adopted the objective of being fossil fuel free by 2050.

All these achievements are very remarkable, and everyone should congratulate Stockholm for that. The award is well deserved, however, there are two aspects that should be taken into account by the next prizewinners (Hamburg in 2011):

• The City should involve everyone in the award: the participation of important stakeholders, such as the citizens, is missing.
• The communication about the event should definitely be improved and be more open to the public. Without communication all efforts could be in vain. Let citizens be proud of their city’s great achievement!

Study visits only for “professionals”

I tried to set up visits to the different activities dealing with the event, as well as meetings with people involved in this process. Unfortunately, all professional tours were addressed to institutions, other cities, universities, etc.

There were no meetings intended for consultants or “normal” people. As an example, the next event is a conference intended for representants from other cities, the European Green Capital Conference. Little information is found on events where “normal folks” can participate.

As one person working for the City told me: “The aim of the study visit programme is to strengthen Stockholm’s network with other cities and increase the possibilities of sharing experience and learning from one another”. But I didn’t give up, I must thank this same person for getting me in touch with different institutions and recommending me to arrange informal interviews with them. I was able to set up one meeting with an environmental consultancy and another one with one person working at GlashusEtt, the centre for environmental information and communication in Hammarby Sjöstad (the new eco-friendly district in Stockholm).

That leads me to one of the things I missed: There were no events intended for the general public or even for tourists visiting Stockholm. The whole thing was too closed, almost for insiders.

Stockholm is the Green Capital of Europe, could you tell?

Another thing I missed was public reference to Stockholm being European Green Capital. The only one I found was a poster hanging in a stairway at the Tourist Centre. It’s great to be sustainable and green but it’s only half that great if you don’t spread the news…

Poster at the Tourist Centre

Communication of the award was inexistent. Even Swedish friends living in Stockholm told me they were not aware of the fact that their city was this year European Green Capital.

One would expect workshops, rallies and other events addressed to citizens and tourists, but there weren’t any, or I couldn’t find them (so hidden were they!)

The Green City and The Companies

The impression after the informal meetings was that the current City government was living up to the high standards reached by the previous one (from a different political party). Some people said that the City government was using the European Green Capital as a greenwashing tool.

My contacts at the environmental consultancy told me that the City government had cut down help to small and medium entreprises who wanted to adapt themselves and be environmentally friendly. I think that local assistance to small companies who want to be greener is a must. The role that cities can play in order to reach sustainability is crucial. They can be the interface between citizens, companies and public institutions.

Communicate, celebrate, convince

Stockholm deserves to be celebrated as a green, sustainable, citizen-friendly city, that’s why a little more effort communicating the event and sharing it with the community would have been recommendable. People need to hear good news connected with green and sustainable matters, not the usual “this is the end of the world”  type of messages.

Being positive, telling the good news and offering alternatives are key for the cause of sustainability.

Coming up next: Hammarby - eco-friendly district

In my next post I will tell about Hammarby Sjöstad, the new eco-friendly district in Stockholm, an urban paradise on Earth.