On the one hand, the world of business has indeed changed and corporations can no longer ignore the environmental impact of their operations or the social/community priorities of their employees and external stakeholders. On the other hand, in recently memory, there’s never been so much emphasis on profits, earnings, and sales and corporate responsibility managers need to make an even stronger business case for their programs. So, even though employees, consumers, investors, and regulators expect much more from corporations in this area, securing internal resources for corporate responsibility is still as hard a sell as ever.
And, it’s not like there isn’t a business case for corporate responsibility. Without re-stating what’s available elsewhere, there is plenty of evidence that corporate responsibility is good for the bottom line. However, for the most part, the business impacts of corporate responsibility programs are often indirect. For example, it’s clear that community investment programs contribute to employee loyalty. This in turn results, in higher productivity and lower turnover. The bottom-line benefits include lower production costs, greater innovation, lower recruitment costs, and lower training costs.
All sounds good. However, in my experience, today most aren’t executives are paying attention to indirect benefits. They want to know what the direct and short term returns will be. Corporate responsibility manager are being asked questions like “In what ways is our community investment program going to help our business this quarter?”.
Clearly, this isn’t an easy question to answer. However, it does mean that managers should be looking hard at the fundamentals to ensure that they have covered all bases. Here’s an abbreviated checklist of the questions we think are most important for corporate responsibility managers to address:
- Has an environmental audit been done and have changes been made as needed to reduce environmental impact and related costs wherever possible?
- Does the corporation know what social issues are priorities for its employees and external stakeholders and does the corporation’s community investment program address these priorities?
- Has the corporation leveraged every opportunity to create profile for corporate responsibility programs in existing communications?
- Has the corporation explored every opportunity to integrate corporate responsibility programs into sales of its products and services?
- Has the corporation established partnerships with environmental and community organization that can add credibility and authenticity to its corporate responsibility programs, provide new sales and communications channels, and create opportunities for direct engagement through volunteering and knowledge sharing?
- Is there a system for ongoing measurement (qualitative and quantitative) of the impact of environmental and social programs?
From what I see every day, most corporations still have a long way to do to cover the basics. However, the time for corporate responsibility managers to act is now – for more internal accountability, for the best possible short-term advantage, and for helping their corporation come out ahead in the longer term.