Corporate Social Responsibility

by Becky Toal and Veronica Broomes

Community engagement and investment

Over the past decade, investment in communities by businesses has grown in sophistication in terms of both approaches/strategies, and in measuring the impact of the investment of time and money on the triple bottom line of people, planet and profit.

In the past, donations to locally favoured community causes were made after overheads and dividends had been cleared. Today, however, investment in communities (both local and overseas) is more complex, with businesses being able to use pre-tax profits to support a wide range of projects. For a smaller business, the investment may take the form of sponsoring local sports teams, donating products for charitable fundraising or accepting a local student on work placement. Through their charitable foundations, larger organisations may be supporting community-based entrepreneurial initiatives overseas.

Business in the Community (BITC), based in London but with national reach, is a useful source of information on the nature and scope of community investment programmes. The BITC runs an annual Corporate Responsibility Index, through which invited companies can report on their management of CSR. This allows them to compare management processes and performance with others in their sector. The index consists of a series of questionnaires for participating businesses to complete, and investigates four key areas:

  • Community
  • Environment
  • Marketplace
  • Workplace.

It also looks at performance across a range of social and environmental issues.

Companies listed on the BITC Index are able to show key stakeholders how they are taking a lead in public reporting and increasing the transparency of business performance. BITC’s seventh annual index (for 2008) was announced in the Financial Times in June 2009. Awards were given to 109 companies in five categories, as summarised in Table 3, although the company reported that 146 companies used the BITC Index as a management tool.

Index category awarded Number of businesses
Platinum plus 7
Platinum 33 (including 23 awardees from 2007)
Gold 30
Silver 32
Bronze 7

Of the 350 companies that have participated in the index since 2002, 32 have taken part every year and the most recent group included 22 per cent of new entrants.

The BITC also manages the ‘PerCent standard’ which is a voluntary benchmark that seeks to promote a model of corporate behaviour that improves the impact business has on society. This benchmark is one per cent of pre-tax profits invested in the local community.

Several independent consultancies have emerged to help businesses prepare their CSR reports. In some organisations the CSR report is an integral part of the Annual Report and many companies, including some trading globally, have signed up to voluntary initiatives, such as the Global Compact, which is supported by the United Nations. Online forums for CSR practitioners and those with an interest in CSR include:

Things any manager can do

Find out if your organisation undertakes any community investment schemes, either in kind contributions, cash contributions or volunteering time from staff. If no such schemes exist, consider suggesting one to the senior management, either for the organisation as a whole or just for your own team.

Staff involvement in the local community can add brand value, lead to positive word-of-mouth referral and increased staff retention.

  • Review relevant industry and CSR websites to keep abreast of new initiatives and case studies on how companies have handled CSR issues that go beyond mere philanthropy (for CSR websites, see Want to know more?).
  • Discuss with your Board of Directors if the organisation should sign up to the UN Global Compact.
  • If this has not yet been done, consider including discussion on the shared values of the organisation in your annual Staff Away Day or Strategic Planning event, and then agree on voluntary initiatives for CSR.
  • Review your supplier list and consider including social enterprises and relevant charities as suppliers. This can be in areas such as corporate gifts and catering.
  • Consider donating surplus or retired IT and other office equipment to suitable local charities, social enterprises and community groups.
  • Recycle computer cartridges through local charities or schools. In this way, you will be recycling while simultaneously helping a local group to earn income.
  • Ensure products purchased by the organisation do not support human rights abuses, such as use of child labour in the production.

Persuading the board

In times of recession, it can be tempting for the board to cut back on charitable initiatives. What can you do, as a manager, if your board is planning to stop matching employee contributions to your preferred charity and staff are unhappy about the plans?

The first step is to explore the options:

  • Consider the organisation’s current financial position and see if there is merit in concerns about finances.
  • Are there other areas of cost that could be reduced or performance that could be improved?
  • Would the withdrawal of funding be for a fixed period or be discontinued indefinitely?
  • Is the organisation’s commitment to funding ongoing or reviewed at the end of each financial year?
  • Can employees contribute time in place of lost finance?
  • Can the organisation honour its current commitment to the end of the present financial year and give the charity due notice of inability to continue thereafter?

Making a case

If you still feel there is a way forward, the next step is to plan an approach to the board and to staff.

  • Consult staff to get their views on options, including suggestions on the way forward.
  • Persuade the board of the business benefits of maintaining the current level of support for the chosen charity.
  • Enable staff to contribute their time, if appropriate, to the charity to make up for the shortfall in financial support.
  • Point out the benefits to the organisation’s brand and the satisfaction that employees will gain from maintaining the current relationship.
  • Point out the potential damage to the organisation’s brand and employees’ morale if the organisation’s support is withdrawn.