Corporate social responsibility (CSR) or corporate citizenship entails companies behaving in a socially responsible manner, and dealing with other business parties who do the same. With growing public awareness and demand for socially responsible businesses, it is little wonder that companies of today take corporate social responsibility into account when planning future socially responsible business operations.
In April 2009, Booz & Co., a global management consulting firm, released the findings of a study into the impact of the recession on sustainability-related corporate spending. The study essentially found that there is little correlation between financial strength and optimism about socially responsible CSR agendas and 28% of respondents at financially strong companies said CSR agendas in their industries will be affected by the economic downturn. Another survey of charity chief executives by the UK Charities Aid Foundation (CAF) revealed that 72% have seen demand for their services increase as their running costs rose during the recession and 30% saw the charity donation for charity organizations, nonprofit fundraising for nonprofit organizations and the likes of corporate philanthropy fall at the same time.
Indeed, budget cuts for corporate social responsibility CSR are to be expected during a recession. A recession, however, provides ample opportunities for companies to leverage greater non-financial resources. "False belief that investments in people and training can wait; that corporate social responsibility can be put on the back burner," Starbucks CEO Schultz wrote in an essay in the Huffington Post. Companies can uphold their socially responsible commitments by reviewing their corporate citizenship strategy in three simple ways:
Employ a Strategic Framework for Corporate Citizenship
Companies will have to integrate specific social issues into corporate strategy in a way that reinforces competitive advantage to create a sustainable business. An effective strategic corporate social responsibility framework aligns community efforts and donations with core business strategy, company expertise and market needs. As such, this calls for more targeted corporate social responsibility expenditure on one or two specific issues that are linked intrinsically to one or more of a company’s business units.
For example, General Electric GE expanded its program that provides health-care equipment and training in places like Honduras and Kenya and has committed extra funding and corporate philanthropy towards catering for basic needs like food, clothing and shelter for needy Americans.
Commit to Economically Deprived Social Projects
Environmental issues and issues engaging environmental sustainability often take a back seat during recession times and gets less face time in the media. Companies should refocus their corporate citizenship efforts in these areas in order to maximize their impact and get maximum exposure.
For example, Intel, the world's largest chip maker, stepped up its energy conservation efforts through the purchase of 1.3 billion kilowatt hours of renewable-energy certificates, during a time where oil prices dipped and renewable energy was seemingly not such a sexy phrase anymore.
Partner with the Right External Organizations
Working with external organizations provides credibility for the company’s corporate citizenship efforts, and increase public confidence in it. Areas where significant improvements for socially responsible companies can be expected from Non-Government Organizations NGOs and government entities alike by companies are mobilization of resources, communication mediums and know-how in certain areas. Partnership with the right nonprofit organizations can also mean effective nonprofit fundraising, ease at which a charity donation is made for charity organizations and an ideal example of this is karmayog.
For example, McDonald’s implemented the Sustainable Fisheries program in collaboration with the Sustainable Fisheries Partnership, which defines sustainability standards that guide all of McDonalds’ purchases of fish to create a sustainable business for a fishery.
Jo Bilson - Jo Bilson is a management consultant with interests including venture capital and entrepreneurial finance.
