We're often asked - what makes something qualify as corporate social responsibility? How can you tell how much is 'enough', and when does it become hollow? To help make it clearer, we've put together this guide on what makes a good step change - and the common hiccups to avoid.
A good step change:
- Is doing something you don't have to do (going above and beyond the scope of profiting).
- Is varied, but focused around a common purpose. For example, Unilever is focused on children's wellbeing globally, and chooses initiatives that align with improving this.
- Each project in your portfolio is easily identifiable. If someone can picture the result and quantify it in their minds, they will understand the need better. Ie. it's better to focus on helping dolphins rather than focusing on say a small patch of the wide ocean, even if the efforts required to help both are about the same.
- Is not one project in isolation, but a mindset of solving a social problem over time. Ideally this problem will be one that relates to core business over time.
- Is congruent with your business operations, and takes place across the supply chain. CSR fails when customers can see that you don't recycle, but you support a tree planting initiative, or when you sell a shrimp sandwich to help 'save the oceans'.
- Is as much about supporting community projects as it is about being a solution to a social problem by operating and producing responsibly. Good CSR uses the enthusiasm, entrepreneurial skills, expertise, experience and energy of a company to 'do good' by doing what it's best at.
- Is bold. It takes companies choosing to stand for something; and making decisions to change before it becomes normal to.
- Is significant in effort; a guideline we use is around 2% of your annual profit. This isn't a rule - but a number India has made compulsory for all of its corporates. We think it's a great place to start.
- Is relevant to the values of the target market.
- Is celebrated and communicated. Quiet giving falls under philanthropy; good CSR involves communicating your values and purpose with all stakeholders, and actively evolving your efforts with their input.
- Is organised. Unorganised efforts are more likely to become left behind and forgotten in time.
- Centre on making progress, not perfection. Good CSR is continually built upon and improved.
- Takes employee involvement in decision making.
- Might involve collaboration with other businesses. If the task is a big one, joint efforts between teams or friendlier competitors can go a long way.
- Is reported on. Glass pockets are important for good CSR, so that no one gets caught out when claiming a project, or overstating their contribution with promotions.
- Doesn't fall for the fallacy of 'we will once we're big enough'. Good CSR grows with a company; and is often one of the driving forces behind company growth.