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CSR: Do good in a sustainable way

In my last article, I wrote about the evolution of Corporate Social Responsibility (CSR), promising that in this one I would delve into the latest trends in CSR and how it relates to ESG (the Environmental, Social and Governance dimensions) and the SDGs (the Sustainable Development Goals).

For my guidance, I turned again to Michael Hopkins, whose core area this has been for 20 years and who has written several books on the subject, including his 2016 one, aptly named CSR & Sustainability: From the Margins to the Mainstream.  His most recent one, CSR and Sustainability – The Big Issues of the Day, was published this year, and it is from here that I lay out his model for applying what he describes as a “systems approach” to CSR.

Through such discipline, Prof Hopkins sees organisations not just viewing the CSR activity as inhabiting some corner in a department, but evolving as a high-level integrated component of the overall strategy, with active board engagement.

It must be well-managed so as to ensure profitable sustainability, he insists, and it should be pursued without compromising those profits. It is a question of how profits are generated, he clarifies, not allowing them to suffer as a result of “doing good”.

For anything to be well managed it must be well measured, as we all know.

But defining Key Performance Indicators for CSR initiatives is not a straightforward task – particularly given the requirement to have them be associated with the relevant SDGs, given their broadly defined aspirations.

It’s a challenge to assess the impact of any goal that cannot be easily measured in terms of quantifiable scale such as shillings or miles.

And this, more so, as of course must happen, if one follows the path to the ultimate desired impact. Bearing in mind, too, that having visualised that impact a new issue arises: to what extent can one attribute it to the initiative in question?

Little wonder that only a few organisations are anywhere near rigorous in laying out KPIs in the CSR domain.

The consequence, however, is that when for instance they seek capital, potential investors will not be impressed.

The “business case” must be spelt out, just as it must for any other aspect of the organisation, and of course, we’re talking about the long-term case. After all, that’s what sustainability is all about.

These days too all this must integrate with the whole ESG ecosystem.

And a good place to start is by drawing up a stakeholder map bearing in mind that the essence is to “treat all key stakeholders responsibly”. So, who are they? Which ones are key, in their influence on our organisation, and in ours on them?

Having identified them, the next stage is to invite them into dialogue, so a clear, trusting and mutually beneficial relationship is developed between them and you.

Such dialogue must involve a wide range of contributors from within – way beyond just someone with a fancy title like Chief Sustainability Officer.

The next step is formulating the CSR strategy, integrated into the overall organisational one.

This lays out the purpose, the programmes and the indicators; the budgets and the benefits; the systems and the performance management; and the reporting discipline.

A good example of the positive stakeholder impact of CSR is in the area of staff engagement, where the consequence of doing well by doing good is that people of high competence and character are attracted to join you and stay with you.

Here as elsewhere, one must define indicators that assess the impact of CSR on such talent attraction and retention.

Time must be invested in all of this, and more than on a one-off basis. But not everyone is a Safaricom or a KCB or a Diageo, so we must not be over-ambitious either.

The idea is to be uplifted by one’s efforts to make a sustainable assessable difference in this world, knowing that today organisations are being judged not merely by the extent to which they protect shareholder interests but the broader stakeholder ones, too.

A final point: Prof Hopkins is a strong advocate for CSR to be practised not just by for-profits but also NGOs and the government.

Why should they feel morally superior to commercial entities if they too do not treat all stakeholders fairly?

Evolution of philanthropy and CSR

In today’s world more and more firms from SMEs upward – never mind publicly quoted ones – have taken corporate social responsibility as a natural component in how they operate.

For some, it came more naturally than for others. For those where owners’ and directors’ values resonated with being responsible citizens, it was an easy evolution, one they felt good about.

Applying my colleague and friend Prof Michael Hopkins’ CSR definition of “treating all key stakeholders responsibly” (he and I, together with prof Mike Sacks, are co-founders of the Institute for Responsible Leadership) was not a bridge too far. Indeed, their values were such that “saying no when they should” and “treating others as they would wish to be treated themselves” is how they were probably brought up from an early age.

For others with weak consciences though, these are alien concepts that would prevent them from closing the kind of shady deals that keep them in business.

They’re quite OK with incenting beneficiaries at the purchasing end, exploiting their workers, creating a negative impact on the environment, evading tax payments and so forth.

Unfortunately, we live in a society where impunity is rampant, so corporate social irresponsibility is still widespread.

Those organisations that typically invite me to join their boards or to act as a consultant to them are overwhelmingly the ones in the first category.

It’s those who are ahead of the game, in CSR as in talent management, innovation and elsewhere, who know they can still do yet better in their quest for long-term sustainability.

It is of course such organisations with which I want to be associated, and if I am asked by the other kind to engage with them I politely decline, saying I am already too busy.

What have I and others found? (And here I am not talking about public companies.) Most if not all have been making contributions to good causes from time immemorial.

It’s what we used to call charity, typically “helping the needy in society”, and very likely with one-off donations in response to urgent requirements, whether in cash or kind and including volunteering. At the higher end, philanthropy goes deeper to address the root cause of social issues and requires a more strategic, long-term approach, with advocacy sometimes an additional component.

The original meaning of charity, “Christian love of one’s fellow,” is rooted in Late Old English, while philanthropy, or “the love of humanity,” originated in Greek. When “charity” entered the English lexicon by way of Old French’s “charité”, the meaning evolved into what we know today.

Meanwhile, the practice of modern philanthropy is often credited to titans of industry like Henry Ford, John D. Rockefeller and Andrew Carnegie, all of whom launched their Foundations to make the world a better place.

Henry Ford explicitly wanted to reduce poverty in his country, as among the consequences would be that more people could buy his company’s cars. And here in Kenya our philanthropy role model is Manu Chandaria and his family, with their Chandaria Foundation.

Dr Chandaria was recently in America, where he was the first African to receive the Carnegie Medal of Philanthropy.

In his acceptance speech he revealed that having returned from his university studies in the US, early in the life of the still small family business owned and run by his father, he suggested they set up their Chandaria Foundation to help Kenyan communities – having been inspired by the example of Ford, Rockefeller and Carnegie.

His father at first thought this to be premature, but after a few years, he acquiesced as his son Manu persuaded him that it was indeed a worthy initiative to be “givers” who are useful to society by serving the community and not just by writing a cheque.

Since then the Chandaria Foundation has blossomed into a major supporter of healthcare infrastructure, secondary and higher education, poverty relief, and the environment.

So that’s something about philanthropy. Now to conclude this article, back to CSR, and this by way of a link to my next one, where I will be delving into the latest trends in CSR and how it relates to ESG (the Environmental, Social and Governance dimensions) and the SDGs (the Sustainable Development Goals).

Life is becoming far more ambitious and complicated in these areas, and organisations from the bottom up – not merely for-profit ones – must keep up to date with what is expected of them. Back in a fortnight.

Going about CSR in the tough time of Covid-19

Last week I was invited by Prof Michael Hopkins to speak at one of his CSR Meetup events, these days inevitably online.

Prof Hopkins has been running these for over ten years, and in different countries around the world. Now they are being co-hosted by Globethics, the Geneva-based global ethics network, and my topic was “Corporations connecting with their communities – now and before Covid”.

I spoke from my experience in Kenya regarding CSR, and started by worrying that the perception of some in government, civil society, academia and elsewhere is that as far as the for-profit private sector is concerned, we are only in business for just that – profit. More so now during the Covid crisis, the assumption is that among the budget line items to be most speedily slashed would be the CSR one, and that other aspects of this “treating all stakeholders responsibly” to which CSR speaks would also fall by the wayside.

It is for such reasons that many outside of the private sector assume it has little to offer during this Covid-19 crisis and would not make suitable partners. This is a great shame as, largely coordinated by the umbrella body, the Kenya Private Sector Alliance (Kepsa), lots of its members are contributing in a highly responsible, constructive, generous and coordinated way.

I remembered the troubled times around past elections in Kenya, when Kepsa developed initiatives to support social cohesion through its Mkenya Daima programmes. “They’re just doing it for business continuity,” sneered some from civil society, claiming we were only worried about peace but indifferent to justice… which was quite untrue.

I then drew examples of impactful CSR initiatives from sectors with which I am associated. Like insurance, where the Insurance Regulatory Authority recently got the industry players together to contribute to the Emergency Response Fund for Covid. Like others, we at Occidental Insurance reallocated some of our CSR budget that had been targeting communities directly and applied it into the fund.

Social responsibility is also being seen at KCA University, which has been reaching into nearby slums, both in Nairobi and in Kisumu, to assist vulnerable youth and their parents in multiple ways.

And at water and energy company Davis & Shirtliff, alignment with the Sustainable Development Goals is a no-brainer: SDG 6 seeks universal availability of water, and SDG 7 talks about access for all to clean energy.

The company, through its spread of branches around the region, partners with the surrounding communities and continues to promote these goals in a sustainable way – in fulfilment of its purpose, “To improve people’s lives by providing water and energy solutions across Africa”.

It also partners with its suppliers, and with service organisations such as Rotary, to amplify its CSR impact. Not least in ensuring the sustainability of the water supply by going beyond the mere installation of a borehole to creating a business model with the community that will allow for its maintenance and ongoingness.

Next I spoke more about Rotary, of which I have been a member for many years, turning to an aspect of CSR which although less visible is at least as significant: volunteering. Here we are not talking about the financial inputs to CSR but about all the man and woman hours.

There are around 1,200,000 Rotarians in the world, and a recent survey revealed that in the four-week reference period, between us we volunteered 5.8 million hours, delivering services worth $850 million a year.

CSR initiatives should involve employees of the organisation, whether through in-house projects or external volunteering, including through another dimension of the latter – being active in Professional and Business Member Organisations. Aside from time spent with such bodies benefitting the profession or sector, it inevitably leads to learning and growth on the part of the volunteer, as I have found in all the volunteering to which I have been exposed.

During the discussion time the plight of small-scale farmers and MSMEs was raised, and here I gave credit to large corporates such as Bidco, Coca Cola, Diageo, BAT and others who stimulate the development of bottom-of-the pyramid producers – CSR by another name.

Now more than ever is the time for CSR community engagement, not least for large and medium firms in sectors that have not been pulverised by Covid-19, to be preserved, and with all stakeholders.

Reallocated maybe, but not demolished. The behaviour of those that do so will be remembered favourably long after the crisis has calmed.