3 Challenges for CSR Executives

by Aman Singh Das | March 10, 2011

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"All my life I wanted to avoid a job title with 'social' or 'relations' in it. I've always been in finance, I enjoy it, and I'm good at it!"

That was Northern Trust's EVP for CSR Connie Lindsey talking on a panel at Financial Times' annual conference, Investing in a Sustainable Future, on how CSR executives can leverage their work internally and externally.

Accompanying her were Paula Luff, director of CSR with Hess Corporation, Michael McHale, director of corporate communications with Subaru and Corporate Responsibility Officers' Association (CROA) President Richard Crespin. Playing moderator was Environmental Defense Fund's (EDF) Director of Marketing Communications and Corporate Partnerships, Melanie Janin.

[These titles right at the outset are an indicator of how widespread the scope and focus remains for most executives who work in/on CSR—dependant on a number of factors, and differentiated by every company]

Lindsey spoke candidly about her love for finance, and the misinterpretation that CSR suffers from. Emphasizing that "philanthropy is great in itself but that isn't what CSR means or ends at," she said that in fact, this traditional stereotype has been the biggest objection—and challenge in her new role.

"When I took the role it wasn't to create something new. CSR isn't new," she said. What's new, however, for many like Lindsey, is the need to communicate their commitment to CSR.

And this is where the panelists found the most conflicts. Key takeaways:

CSR executives from Northern Trust, Hess and Subaru discuss the power of corporate citizenship rankings and the challenges of measuring CSR

Rankings: What Makes a Company a CSR Champion?

Discussing the CROA's latest 100 Best Corporate Citizens ranking, Crespin emphasized that the companies who consistently ranked high were the ones that understood the holistic concept of CSR versus siloing it to define volunteering, philanthropy or environmental work.

For Hess, which placed at No. 43 in this year's ranking, "our CEO and management team decided a long time ago that CSR and sustainability was going to be a competitive advantage," said Luff, adding that having a company founder as the head executive ensures there is enough vested interest for him to actively lead issues like CSR.

However, Crespin delivered the final punch line: "Companies' willingness to disclose and be measured makes them more effective managers of business risks."

How Do You Measure ROI in CSR?

For Leff, return on investing in CSR can be measured in many ways, and finding what fits best is key, "whether that's employee engagement or where it sits within an organization." She also stressed that because younger generations were increasingly using sustainability to make their career decisions, the importance of it had risen dramatically.

But several challenges emerged as well.

Lack of Data: For Lindsey, the biggest roadblock is data. "How do we have specific data to say it impacts shareholder value and investor decisions?"

Lack of demand for CSR data: For Leff this was a bigger issue. "Our management team is being asked the sustainability question. The focus, whether it’s the Annual Report, or the quarterly call, or any other forum, is always on the financials," she said. Besides more training and education, what can we do to increase this awareness? Crespin suggests that "it's time to turn the question on its head."

He used an oft-quoted analogy to explain.

Why Did UPS Eliminate Left-Hand Turns?

In 2007, UPS announced that its drivers would not make any more left turns. The reason: These turns emerged as the No. 1 reason for injuries on the road.

The more publicized reason, according to Crespin: Eliminating left turns, according to a "package flow" software the company uses to map out its routes, besides other things, would result in massive gas savings by drastically reducing engine idling.

Lesson? Context and a financial return on investment. For socio-environmental (or CSR) decisions to really permeate through to shareholders and the executive team, spin them into financial arguments for increased efficiency; show the financial ROI instead of relying on the "doing good" aspect of your proposal to catch.

However, was the decision really one that didn’t originate from a cost-saving perspective? Isn't there also an equally valid argument that because of increased instances of injuries [and the corresponding risk of litigation], UPS was compelled to figure out a solution?

Moving on… McHale took the opposite stance saying that making everything link to the bottom line took away from a company's preference to do the right thing. "Chasing the bottom line will keep us from doing the right thing. We're in business to do business but we also need to do the right thing," he emphasized.

Where does (should) the CSR function sit?

This is not a new topic by any means. Several surveys have pinpointed the overarching trends, including most recently, the Boston College Center for Corporate Citizenship's (BCCCC) Profile of the CSR Practice and the Profile of the CSR Profession. From the 2010 survey:

What aspects does corporate citizenship cover?

  • --Community support/Philanthropy: 96%
  • --Environmental Impact/Sustainability: 74%
  • --Ethics: 56%
  • --Workplace Issues & Diversity: 55%

And the panel echoed these findings. Lindsey reports to the CEO, Leff sits in environmental, health and safety, and McHale sits in marketing. They all emphasized however, that they led global taskforces which many times were cross-departmental—and virtual.

So what are some best practices this very diverse panel of executives could offer for embedding a responsible corporate culture most efficiently and effectively? See 5 Best Practices in CSR.

Related:
(Job) Profiling a Typical Corporate Sustainability Professional
Profiling the CSR Profession: What Does Working in Corporate Citizenship Involve?
NY Times: Left-Hand-Turn Elimination
CR’s 100 Best Corporate Citizens 2010
CR’s 100 Best Corporate Citizens 2011

Filed Under: CSR

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