Let’s be honest: morality is not a private matter, even though we may get that impression when looking at our ever so advanced societies over different historical periods. Committed activities can make people sit up and take notice, change their perspective, and raise a new awareness. Actions that come under the banner of “CSR” are already required from a relatively wide community, and it means something that should have been obvious for quite some time: namely, that businesses should recognise their responsibilities to the environment and to society, in the full sense of Corporate Social Responsibility. Too good to be true?
Whether it involves company nursery places, eliminating questionable materials from production processes, preventing discrimination, creating resource-saving product designs, or engaging in charitable causes – CSR can be applied in a thousand different ways.
In the English-speaking world, the term "Corporate Social Responsibility" is already part of the standard business lexicon; in German-speaking countries, however, it is only gradually establishing itself. In this country, "sustainability" has made it into the limelight – measures that could fall under either term tend to be assigned to the latter. The number of sustainability reports therefore exceeds the number of CSR reports (for now) – in some places, they are even called CSR sustainability reports. This is not completely unjustified, as both topics are indeed interrelated because CSR measures can promote sustainable development.
However, while sustainability seeks to establish a balance between environmental, social and economic components (some models focus more heavily on the environment as the foundation of the two other elements), CSR takes the economic components for granted and focuses on the environmental and social or societal aspects. As the name says, CSR refers to corporate responsibility. Sustainability still remains though as a more comprehensive concept that is not limited to CSR, and it is by definition oriented towards future generations. The widespread misconception that sustainability = environment and CSR = social components is at any rate incorrect.
Voluntary participation is an essential aspect of CSR. In other words: CSR goes beyond legal compliance. Two examples: If employees have the right to elect a Works Council, "permitting" a vote is not a CSR measure, just as the installation of a legally required exhaust air cleaning plant is not considered CSR. However, if the installed plant is significantly more environmentally friendly than legal regulations require, or if there is no employee right to elect a Works Council in a country but this is made possible in any case, then both actions can be considered CSR.
Yet it is not quite as clear as it may seem. This is because the idea that CSR should depend on the respective legal situation is problematic. Under such a definition, a company that fulfils all regulatory requirements in a country with high environmental and social standards, yet does not go beyond them, is not engaging in CSR. On the other hand, a company that moves production to a low-wage country that has hardly any regulatory frameworks in place, and takes just a small step beyond what is legally required, could boast about their CSR efforts.
The voluntary component of CSR refers inherently to the careful selection of a production site that meets CSR criteria.
The Austrian brands GRÜNE ERDE and WALDVIERTLER SCHUHWERKSTATT, for example, are leading the way by leaving their production facilities in European countries despite higher costs, instead of relocating to low-wage countries in the eastern hemisphere. Both companies are known for their corporate philosophies as well as the comprehensive CSR activities derived from these.
Credible CSR affects more than the core business. A bit of sponsoring here, a small donation there - that may be all well and good, but it is not enough for real CSR. Once a company has decided to embrace real social responsibility, then it should cover all corporate departments and run through the entire value creation chain.
The first thing to do is for a company to be absolutely clear about the role that is plays in the social environment. A strategic position statement is required before positive instruments can be developed. Internally created and/or pre-existing guidelines can be appropriated as a mandatory code of conduct, such as the ILO Conventions, the OECD Guidelines or the 10 Principles of the UN Global Compact.
In addition to anchoring CSR in the core business, using core competences for CSR measures is also a perfect approach. For example, Deutsche Post World Net uses its logistical capabilities to deliver aid after catastrophes such as the tsunami in Southeast Asia, works together with UN sub-organisations to build a global network of disaster response teams with volunteer DHL employees and transports medicines for free to developing countries.
Another feature of (successful) CSR is dialogue with stakeholders, whether they be investors, employees, customers, suppliers, neighbours, public authorities, NGOs, the media or even just the public.
You may ask, why the media and the public? Communicating CSR measures is completely legitimate – the relationship between the commitments communicated and those that are in fact real just has to be true. Unfortunately, there are several cases of unsubstantiated exaggerations, half-truths or overemphasis of individual aspects that scarcely have any relevance to the core business. In addition it is not always easy to see through an attempted image campaign such as the green giant campaign by the RWE energy group during the Copenhagen Climate Summit a few years ago – a perfect example of greenwashing.
In other areas, asking about the core business can yield information about how serious a company’s CSR efforts are. Deutsche Bank, for example, dedicates an entire menu on its website to "Social responsibility", along with comprehensive information – all of which is perfect for CSR purposes. Yet if you begin asking questions about the financing of military weapons companies or speculation in the commodities markets, then an ambivalent picture begins to emerge at best. The bank only implemented a guideline that severed its business relations with manufacturers of cluster bombs (alone) after massive public pressure was brought to bear. The discussion about the effects of speculation in agricultural commodities has led the Bank "to reconsider its role in solving the problem of world hunger."
The fact that a high degree of CSR is possible in the banking sector is proven by financial institutions that invest exclusively (or overwhelmingly) according to ethical criteria – with positive and exclusionary criteria – such as GLS Bank, Ethikbank, Triodos Bank, Bankhaus Schelhammer & Schattera among others.
One thing is also clear: if a company commits publicly to CSR, then credibility is of the highest importance. Credibility can be strengthened by cooperation with NGOs or earning quality seals, certifications or CSR awards, as well as with an honest CSR report. A Code of Conduct that only appears on a website is of little value when it comes to credibility as long as compliance is not monitored by an independent body.
Being an attractive employer is an advantage for any company. Google knows this, as does the German company Sick. Numerous trainees have been taken on at the market leader for factory and process automation. The company hires older employees and severely disabled persons and guarantees the compatibility of career and family. For these reasons and more the company regularly ranks among Germany’s Top 10 employers.
Such measures bring together effective factors both inside and outside the company. While some corporate CSR is implemented out of a commitment to ethics, some companies focus on the economic advantages that often occur as "accompanying phenomena". This is because studies show that responsible companies are successful over the long term: "doing well by doing good." And that is a good thing. So let’s not judge companies too harshly for ulterior motives. In this case, the results should be ranked above the intent...
Social entrepreneurs go one step further in their understanding of responsible enterprise. Their motivation is not to lead a company as responsibly as possible, but rather vice versa: they want to solve social problems, and it is precisely for this reason that they found a company. Their aim is to develop innovative concepts and not make profits, in order to make the world that little bit better to put it casually.
For example, this includes searching for new ways in the education system to help disadvantaged children find success, creating conflict resolution models in crisis-ridden regions, developing strategies to combat poverty, or facilitating understanding between nationalities and religions. The single local project is not the sole focus here; instead these entrepreneurs seek to create a model that can be applied to other places, thereby creating major transformations.
They find support for example at Ashoka, an organisation that is the global leader in providing support to social entrepreneurs in the form of funding, advice and networking.
Social entrepreneurship reached the world stage in 2006 when Muhammad Yunus won the Nobel Peace Prize for Grameen Bank in Bangladesh. His idea of granting microcredits to people in poor countries made a contribution to reducing poverty that has been emulated many times since, and all of this in the form of a financially successful company.
Andreas Heinecke’s "Dialogue in the Dark" is one of countless other examples of social entrepreneurship. The business idea is for blind people to guide small groups through rooms that are completely dark and which contain aromas, winds, temperatures, sounds and textures, all of which give everyday life a new experiential quality. The concept has been thoroughly successful for over 20 years: tours in over 30 countries, more than 7 million visitors and 7,000 new jobs specifically for blind Dialogue employees – and demand continues to grow.
Normally social entrepreneurship (still) takes place in smaller contexts, such as Glovico (Global Video Conference), an online language instruction platform where native speakers from developing countries give language students in Europe lessons via Skype and set their own prices for their services.
Nevertheless, social entrepreneurship is already on its way to going beyond a niche phenomenon. Even renowned business schools have adopted the idea and are discovering a lot of interest among their students.
Anyone who is looking for examples, ideas or information should go to the"Yes we do"project, which presents a new project every day and has the aim of driving forward change in a sustainable society. These positive examples are meant to provide inspiration and lead to optimistic action from destructive complaining, all in order to make the world that bit better. It is therefore about more than "just" change – in simplest terms it is about change for a better future.
Definitely not good enough to be true...