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CSR strategy good for business
The United Nations Development Programme (UNDP) monitors several factors that contribute to the development of nations, and a recent study of corporate social responsibility (CSR) initiatives in Trinidad and Tobago found practices locally to be wanting.
The study, shared with the public last week, was culled from interviews with 53 local chief executive officers and revealed some surprising statistics. While 80 per cent of local CEOs participating in the study acknowledged corporate social responsibility as critical to the future success of their businesses, only half of them were actively pursuing a CSR strategy in their core business operations.
Key to every CSR initiative is the identification of “stakeholders,” of which there are several in the life and operations of any company. Customers and shareholders are stakeholders, but so are people living near to company factories, employees and their families and governments, to name a few.
Successful CSR strategies empower marginal stakeholders, bring pride to financial investors, define the character of businesses and guide public thinking on the ethics and principles of corporations. Wildly successful CSR efforts create sustainable businesses and environments which may or may not directly profit from these projects but which continue to offer intangible value to companies that create them. The practice is considered important enough that the International Standards Organisation has crafted a measurement profile for social responsibility projects (ISO 26000) as a guide for corporations.
The UNDP report also found that most local corporate social responsibility efforts tend to focus on the lowest rung of the ladder, philanthropy—normally a strategy of unreviewed support that rarely leads to the type of sustainable development initiatives that the UN supports.
At a much higher level are the programmes that become part of the way a company does business, engaging employees and other direct stakeholders in corporate success in measuring the company’s impact both where it invests its money for profit and in the positive returns it delivers in the lives of the people it touches.
While too many CSR programmes are blatant ploys for gold-star badges for effort, with poor follow-through and marginal long-term impact, there are examples of corporate social responsibility embedded at an institutional level which benefit company reputations.
Salesforce.com, an online business system provider, committed early in its business cycle to give one per cent of its profits, one per cent of its employees’ time and one per cent of its equity to charities and nonprofit organisations. CSR can also go terribly wrong when it’s used to buy goodwill and distract from corporate dishonesty.
Disgraced energy company Enron won shelves of awards for its CSR efforts, and Caribbean cricket fans need look no further than the big spending of Allan Stanford on T20 cricket to find examples closer to home. It’s notable that the UNDP chose Phoenix Park Gas Processors’ Eugene Tiah to speak at their launch of this challenging report. Under Mr Tiah’s leadership, PPGPL has crafted CSR programmes that not only involve staff in worthwhile projects but have also created a sense of pride and participation that feeds back into the dynamic of the energy company.
Two-thirds of the CEOs interviewed by the UNDP thought that government should intervene in CSR projects—a fundamental misunderstanding of the role that companies should engineer for themselves in social interventions. Companies moved to review their CSR strategies will find that modern standards for the process encourage corporations to leverage their strengths in delivering effective, modern solutions without the limits of bureaucracy, structures and traditions that circumscribe government thinking.
Companies should lead corporate social responsibility projects with the type of nimble, innovative thinking that works to their advantage in business and can inspire their interventions with communities and their publics.
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