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CSR
and Sustainability are continually getting more complex and more costly but
often without
a corresponding increase in value for shareholders and society.
Sometimes
it seems like it gets more complex and more costly and produces less value.
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CSR budgets, requirements and external expectations have increased astronomically in recent years.
At the same time the depth and breadth of stakeholder groups and related interest has continued to grow.
Layered on top of all this has been an ongoing increase in
regulatory requirements around CSR and Sustainability and an almost immeasurable
increase in voluntary standards, norms and reporting demands and expectations.
CSR and Sustainability are significant costs to modern
corporations in many sectors. And
failure to ‘get it right’ is a huge risk with potentially devastating impacts
on brand, projects, careers and even companies.
In many cases the cost and complexity of CSR has grown
rapidly and often without an effective framework to ensure that shareholder
value and societal value is optimized at both the project and the corporate
level.
CSR can seem Eyes Glazing
Over complex
As
CSR has become more important it has gotten more complex,
more
costly and often less efficient at producing value.
A
CSR SWOT can help discover risks and opportunities, and
help
to CSR more comprehensible to key internal and external stakeholders
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In my work at the corporate and project level I have often
found
1.
CSR is
efficient at value creation at the project level.
At the project level CSR activities are relatively efficient at
optimizing value to society and to the project. The immediacy and discipline of social license
and stakeholder interests drives discipline and focus.
CSR projects and activities at the site level (minesite, production site,
factory, etc.) are normally fairly well aligned with societal and shareholder
interests and enhancing overall social license.
2.
CSR is
inefficient at value creation at the corporate level.
There is seldom a corporate level strategy/framework for maximizing shareholder/corporate
value from CSR activities and budgets at the project level.
At the corporate level CSR value is more often realized across
communications, social value branding, talent acquisition and retention,
financial market relations, marketing and sales and other areas.
Whereas CSR and value creation at the site level is often responsive and,
in some ways almost instinctive, at the corporate level it is much more nuanced
and requires broader, more strategic and proactive approaches.
Few companies are efficient at fully capturing value from CSR at the
corporate level. This is somewhat ironic
in that corporate level CSR value is a highly leveraged and low-risk value
creation opportunity.
For the most part the money has already been spent (at the site level)
and capturing value at the corporate level is relatively low cost and high
impact.
3.
CSR/Sustainability
Metrics are confused and confusing.
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CSR Metrics should meet project and corporate level needs.
Often they meet neither |
Corporate wide-metrics and reporting frameworks are difficult to fit to
project-level needs and often simply add complexity and work without apparent
project-level value.
Metrics important for management at the project level are not understood
or accepted at the corporate level, and often not even at executive levels on
the project itself.
4.
CSR/Sustainability
Reporting is inefficient and overwhelming.
The reporting demands of the obligatory, regulatory-driven compliance
reporting coupled with what often seems like a disconnected and confusing hodgepodge
of voluntary reporting are confusing and overwhelming.
Compliance with regulatory driven reporting requirements is mandatory and
can be driven by site level and host country requirements, home country
requirements and the requirements of various membership organizations.
Voluntary reporting requirements are often selected somewhat randomly and
companies end up complying with sets of voluntary reporting requirements that may
not make sense when looked at objectively.
Too often companies end up complying with one or more voluntary
requirements that simply don’t make sense when looked at through a value and efficiency
lens.
Those that do often find that there is little marginal value in some of
their voluntary areas and that there may be other voluntary areas where there
is a much better value/cost relationship.
Even fewer look at where and how they may extract more corporate level value
from their overall reporting commitments.
5.
CSR is
ghettoized.
There has been significant improvement in this area in recent years but
it is still often the case that CSR is often somewhat of a bolt-on piece of the
corporate structure.
Fortunately, there are increasing numbers of companies that have CSR and
related interests represented at decision making levels throughout the
organization
6. Internal CSR communications & buy-in
need improvement.
While there is much improvement in de-ghettoizing CSR and integrating CSR
into the corporate structure there is still much work to be done around
internal communications.
Too often CSR is clearly seen as important and core to overall shareholder
value by those in CSR and related functions and by the CEO.
Other functions and areas recognize that CSR is important but do not
understand clearly how and why it is important to their role and the success of
their work.
Those responsible for CSR often have a lot of room for improvement in
internal communications and value alignment.
7. Confused strategy for external CSR
communications.
Few companies have invested the time and resources to develop effective
CSR communication strategies at the site level or at the corporate level.
Too often CSR communications is ad-hoc and sporadic, ranging from ‘shout
from the rooftops’ to ‘keep your head down and mouth shut’ strategies. Sometime both at the same time.
Communications is a very efficient way to extract more shareholder value
from CSR spending and yet too often this is literally left to whim and chance.
8. We’ll get to it soon.
CSR efficiency (especially efficiency at creating shareholder value) too
often ends up in the important but not urgent category and simply doesn’t get
done.
Executives and managers recognize that there are inefficiencies, that
there are value opportunities and that there are likely unnoticed risks and
threats.
They
know that a CSR SWOT should be done.
But, the urgency of day to day demands and priorities keeps pushing this
out and it doesn’t get done.
This isn’t to blame the leaders and practitioners of CSR,
nor the C-suite team. It is simply the
reality of companies and leaders working hard to keep up with a dynamic and
rapidly evolving field.
However, a CSR SWOT does represent an important opportunity
for companies, especially in these days of economic uncertainty and increasing
budgetary pressures.
A CSR SWOT can often uncover value, opportunities and risks
that have developed and gone undetected as managers and executives have
scrambled to keep up with the rapidly evolving CSR space in recent years.
An objective and dispassionate ‘fresh-eyes’ review will
often find:
- Opportunities for
increased shareholder and societal value from existing CSR budgets and
programs.
- Opportunities for
improved efficiency and effectiveness in CSR/Sustainability reporting
- Unnoticed risks and threats
Executives and managers who can’t find the time to undertake
a CSR SWOT should look to bring in someone who can bring fresh-eyes and fresh
perspectives and just do it.
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A CSR SWOT can help your organization to better support and
capture value from your CSR budgets and activities.
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A CSR SWOT doesn’t have to be comprehensive to be
valuable. Most can be done, at least to
a preliminary level, without travel to project sites and remote locations.
A CSR SWOT can help companies to unlock new value and better
manage risks. But, only if they actually
get done and not just thought about.
