Corporate social responsibility

Corporate social responsibility 101: Everything you need to know

Still wondering what corporate social responsibility really is?

The adoption of “corporate social responsibility” is a trend that has really gained traction in the last 10 years. If you’re still trying to figure out what it is and what it means for your organization, you’re not alone.

Let’s put it this way: We know what a “good human citizen” looks like and the characteristics that go along with that, right? It’s generally someone who exhibits ethical behavior and practices kindness, caring, empathy, generosity and other desirable qualities – someone who does the right thing even when no one’s watching and regardless of their own personal interests.

It’s the same thing with companies. A company may be an inanimate legal entity, but it’s made up of humans and behaviors.

Corporate social responsibility defined

Corporate social responsibility (CSR) is simply the vehicle that enables a company to:

  • Describe its peoples’ collective values and beliefs
  • Explain how its actions exemplify these values and beliefs
  • Promote the positive impact it has internally and externally in the community.

In other words, it’s how companies demonstrate good “corporate citizenship” – how it strives to do the right things.

These efforts are usually encapsulated in these ways:

  • A CSR program:
    • Identifies desired areas of impact such as wellness, philanthropy, the environment ethical practices, etc.
    • Collaborates with internal stakeholders to promote the advancement of the initiatives
    • Coordinates across the organization to collect data on results
    • Creates an annual CSR report that celebrates activities and accomplishments affiliated with these initiatives within a single calendar year.

 

What’s included in a corporate social responsibility report?

CSR covers many areas of focus, which are then outlined in the annual CSR report. Topics covered usually include:

It really is a snapshot of your company’s culture and everything you value.

Consumer social responsibility report example

Here’s an example of a completed CSR report that was done by our own Insperity team for 2021.

What should you include in a CSR report?

Currently, no widescale standards or firm requirements exist regarding which topics must be tracked in a CSR program and covered in a CSR report. There’s still a lot of debate about what constitutes the right amount of information to share. This is because CSR is still fairly new to the business world and is evolving quickly – there are no hard and fast rules. Plus, every company is different.

You’ll have to make a decision about what you want to focus on and publicize based on:

  • Your company’s unique factors and circumstances
  • What your peers and competitors are doing
  • Which areas your organization has the greatest impact on stakeholders
  • What your stakeholders expect

Some companies rely on reporting frameworks – a popular example being the Global Reporting Initiative (GRI) – that does call for the disclosure of specific information. The reason is many feel it lends their program and reporting an extra layer of credibility. This, however, is optional.

Who is a corporate social responsibility program for?

The beauty of a CSR program lies in its versatile appeal. A CSR program has many different audiences with varying interests:

  • Employees
  • Prospective job applicants
  • Clients
  • Industry partners, including vendors and contractors
  • Investors
  • Government
  • Members of the surrounding community, including community partners
  • Media

Your employees and job candidates are interested in what your organization is doing for its people and to positively impact the world. Working professionals of today, especially Millennials and the ever-growing numbers of Generation Z workers, prioritize being part of a company that seeks to do good and exhibits values that align with theirs. People don’t want to just work for a company and earn a paycheck – they want to be part of a positive mission that’s bigger than themselves.

Furthermore, your clients, industry partners and community partners want to know who they’re transacting with and which values and actions they support indirectly.

Investors are interested in anything that impacts an organization’s image and reputation, recruiting efforts, customer acquisitions and the ability to avoid any negative outcomes – all of which affect profitability and the bottom line.

Government entities are concerned with how your organization works to comply with applicable laws and avoid any negative impacts that may fall within their purview, particularly regarding the environment, personnel health and safety, equal opportunity for all workers and human rights.

As for the media, CSR is simply good public relations and image building.

What are the benefits of a corporate social responsibility program?

Keeping in mind the stakeholders for CSR, in sum here are the primary benefits of enacting a corporate social responsibility program:

  • Conforms with increasing internal and external pressures to report on CSR topics
  • Aligns your organization with its peers and prevents perceptions that your company is “regressive” or “uncaring”
  • Assures stakeholders that your company displays good corporate citizenship and is doing the right things
  • Presents an opportunity to steer the company’s narrative while improving visibility, image and reputation
  • Showcases a commitment to transparency, organizational values and improvement in meeting CSR-related goals and objectives
  • Demonstrates legal compliance
  • Boosts recruiting and client acquisition
  • Strengthens employee engagement and raises morale

How to create a CSR program and report

Here’s how you can get started implementing a CSR program and reporting annually.

1. Form a CSR steering committee

This is the core group of employees who focus on CSR and oversee the annual CSR report. This includes any other CSR-related content your organization disseminates as well.

In coordination with executive leadership, these committee members set the overall CSR strategy. This includes:

  • Deciding which CSR focus areas your organization will prioritize for tracking and reporting
  • Choosing and adhering to a reporting framework, if any, along with selecting reporting metrics
  • Conducting benchmarking analysis by comparing your organization’s efforts against peers and competitors
  • Obtaining internal support and buy-in from executive leadership
  • Establishing goals and monitoring year-over-year improvements in performance
  • Selecting a consistent publication date for the CSR report each year (typically, organizations publish these reports for the prior calendar year toward the end of Q1 of the current year)
  • Establishing the timeline or schedule for producing each year’s report, as well as assigning tasks and preparing a report outline
  • Identifying cross-functional subject matter experts (SMEs) and leaders with whom they will need to engage

Ideally, your steering committee includes professionals who specialize in CSR as well as marketing and communications. You will also need a resource to write the report. Additionally, your committee may include representatives from organizational functions that will be included in the report, so that they can efficiently liaise with their teams to obtain necessary information.

2. Regularly engage with all internal stakeholders and SMEs

The departments within your organization that your CSR committee members will need to collaborate with on an ongoing basis include:

  • Executive leadership
  • Human resources (HR)
  • Health, safety and environmental (HSE) personnel
  • Community relations
  • Legal
  • Various SMEs in areas that are targeted for a special highlight in a specific year’s report

These parties can help CSR steering committee members to uncover potential story ideas proactively and collect information. They can also provide pictures of certain events or people that should accompany content. Notably, they should be available for interviews to provide more details when necessary.

It’s important to stay in touch with these contacts throughout the year to avoid delays and last-minute rushes – or overlooking valuable information that would have been optimal to include in your report. For most people, it’s difficult to remember what happened in January by November.

3. Validate all data and information

Before any data or concrete information goes into the report, verify the source and confirm its accuracy. False information can damage your company’s credibility or put your organization at legal risk.

4. Write the report

At this stage, the designated writer puts together the content for the report. There are no rules on the report structure or even the length – take as much or as little space as you need to fully tell your company’s story for the year. Reports can range in length from 10 to 100 pages.

A growing trend is for companies to divide their reports into chapters on environmental, social and governance (ESG) topics. (The social chapter often encompasses health and safety performance, employee matters and community impact.)

However, it is up to you.

If your company uses a reporting framework, such as GRI, it’s common practice to have the report divided into two main sections:

  • The body of the report, where you write in narrative format and include pictures and graphics to enhance the content
  • The index of the report (at the back), where you insert data tables and explain where, specifically, within the body of the report your company has answered questions and addressed reporting requirements

5. Conduct internal reviews of the report with all stakeholders

Anyone with ownership over content in the report should review it for accuracy and clarity before the report’s publication. Typically, the parties with most seniority and veto power – legal professionals and executive leadership – conduct final reviews.

6. Publish and distribute the report

When your company has finalized your annual CSR report, you have the option to print it, post it online or both.

For external audiences, you can make your report available for download on the CSR page of your website. You can announce its publication via:

  • Social media
  • Press release
  • Mass email to targeted parties

For internal audiences, you can notify them via:

  • Mass email to all employees
  • Intranet
  • Employee newsletters
  • Major company meetings

You can also distribute copies:

  • Within your office (reception or lobby area)
  • Via postal mail to targeted parties
  • At major company meetings, such as annual shareholder meetings

How do you know if you need a corporate social responsibility program?

This brings us to our final point: Should your company engage in CSR efforts?

Truly, CSR is relevant and valuable for any company – regardless of business prominence, type, size or industry. Certainly, some companies are more visible than others. Public companies have more expectations for transparency placed upon them than private companies. And in some industries, such as oil and gas for example, it’s more strongly encouraged to engage in CSR efforts versus other industries.

Generally, how do you know whether a CSR program or report is the right activity for your organization to commit significant time and resources at this time?

Ask yourself a few key questions:

  • Is your company doing specific things that are positively impacting your community, the environment or your employees?
  • Do you want to demonstrate good ethics, strong leadership and robust controls?
  • Do you have compelling, meaningful stories to tell that bolster your company’s mission, vision, values, ethics or culture?

If you do, then the answer is simple: Yes, it’s a good idea to participate in corporate social responsibility.

However, there are a few big caveats:

  • Don’t exaggerate any statements, or offer “fluff” or shallow claims just to jump on the CSR train. You can damage your credibility by doing this. Instead, be authentic and make substantial claims backed up with data and facts.
  • CSR is a long-term commitment. Therefore, be transparent and consistent in:
    • Tracking data and improvement on previously reported metrics
    • Reporting this information on an annual cadence.

Once you start this initiative, your stakeholders expect it going forward. If you allow any gaps in your reporting, it may appear as though you’re trying to conceal something unflattering or that CSR simply isn’t a priority at your company.

Summing it all up

Corporate social responsibility programs are rising in popularity; therefore, there’s a lot of internal and external pressure for companies to engage. It’s also a significant commitment that requires you to dedicate personnel and resources, and establish a reporting process, which can seem daunting at first. That being said, there are many powerful benefits associated with a well-executed CSR program.

For more information, download our free magazine: The Insperity guide to corporate social responsibility.


 

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The Insperity guide to corporate social responsibility
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