When I ask business leaders to tell me what good CSR looks like, they mostly respond with examples of charitable giving. The trouble is, unless you’re Bill and Melinda Gates, there are limits to what you can achieve with corporate philanthropy. For CSR with real impact, it’s better toÂ start inside your organisation instead.
Taking a table for ten at a sportsman’s dinner that’s raising funds for a local charity. Making direct donations to a chosen charity. Sponsoring a local children’s football team.
These are just three examples of the sorts of activities that SME business leaders often tell me they most closely associate with Corporate Social Responsibility or CSR.
It’s not surprising, because ‘good deeds’ like these are exactly the sorts of things that attract publicity and help us to communicate our responsible business credentials to stakeholders in a very visible and tangible way.
But whilst there’s definitely a place for this sort of corporate philanthropy, it isn’t the panacea of good CSR. It’s much better to focus first on the things you can control 100%, then the things you can influence and, lastly, things like charity that you can only ever support.
Three spheres of CSR impact
When working with SMEs that want to improve their environmental, social and governance (ESG) performance – which includes sustainability and CSR – I encourage them to think about making changes within these three spheres of impact:
Firstly, the things over which they exercise 100% control.
Secondly, the things they don’t control but over which they can exert influence.
And, thirdly, the things they neither control or influence, but which they can support and contribute to.
This means focusing internally to begin with, where the impacts are greatest, before expanding outside the organisation where the impact gradually declines.
Here’s an example of what I mean.
Imagine you’ve got a colleague that’s working part-time for 20 hours a week earning the new national living wage of Â£7.20 an hour. That adds up to an annual wage of Â£7,488.
You could instead pay the voluntary living wage of Â£8.25 an hour that the Living Wage Foundation has calculated to be the minimum needed to meet the basic costs of living in the UK. This would mean your colleague would earn Â£8,580 instead – a boost of Â£1,092 a year.
Put another way, that’s new shoes and school uniforms for the kids, more trips out with the family – even a holiday – and being able to afford to have the heating on a bit more in winter. Real, tangible differences to a person’s wellbeing and society as a whole when everyone does it.
Now, isn’t that more deserving of a CSR award than if you spent the same amount sponsoring the shirts of a local junior football team?
It’s also much more likely to pay dividends in the form of greater employee engagement, loyalty and performance.
Where to start and what you’re aiming for
Thinking for a moment about the definitions of CSR, what do you think are the top 5 internal aspects of your business, over which you have total control, that have some bearing on CSR performance?
Here’s what what my list looks like:
– people and places
– governance (taxes / legals)
– supply chain
– energy and resources
– waste and recycling
“Really? That’s CSR?” you ask?
Remember, it’s about doing business in a socially responsible way. Your people are part of society aren’t they? If you start out by treating them well, paying them a decent wage, helping them to develop and fulfil their ambitions in life, right away you’re doing something good for society.
So, with that in mind, here’s where to start.
Pay them enough
Develop and empower them
Look after them (H&S)
Pay your taxes on time and in full
Comply with relevant laws
Source locally where you can
Pay them on time
Energy and resources:
Produce fewer emissions
Waste and recycling:
These are all things that are under your direct control. You decide what you pay people, you decide to comply (or not) with the laws that apply to your business, you decide to buy from local SMEs wherever possible, instead of overseas multinationals for example.
Expanding through the spheres of impact
Once you’ve got to grips with the things you can control, you can start to think about exerting pressure on the things you can influence.
In large part, that will be your customers and your suppliers, although how and the extent to which you can influence them will differ.
For instance, you will be able to exert less influence over your customers – because they can chose to buy from your or not. But, done well, they’ll be receptive to your efforts.
Suppliers, on the other hand, can be encouraged to adopt different approaches with the promise of more work, bigger orders and testimonials because they positively want to work with you.
So here’s what to consider next.
Require them to adopt minimum standards
Encourage them to cascade to their supply chain
Once you’ve tackled the things over which you have control and those things that you can influence, it’s time to consider the things you can support.
Typically, that’s local community projects and charities. You can’t cure cancer on your own, but by making regular donations to a cancer research charity, you can help them to help others.
This is CSR at the outer edge; the tip of the iceberg stuff. It’ll be the thing that most people see because it’s the sort of thing that makes for great PR, but because you can only help here, the impacts will potentially be the smallest.
Connect colleagues with local causes
Provide mutual support
Pick a charity or a group of charities and find a way to make regular donations.
This inside-out approach to CSR really works and you still have lots of great news stories that you can share.
What’s more, it gives you loads more examples you can use to showcase your efforts when you’re compiling responses to tender opportunities or updating a B2C website.
Better still, though, it is so much more impactful than jumping straight in to corporate philanthropy. You get to make a real difference, whether that’s to the environment, your local community, or the people your business shares it with.
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