CSR:The Halo Factor

Source: Exec Digital USA

Date :9/10/2008 3:52:26 AM

Can corporate social responsibility programs really benefit both businesses and society as a whole?

Written by Austin K. Welch

Promoting a company’s commitment to all things virtuous is great if its operations and motives are truly whiter than white. But let’s face it, when you’re a major economic player in an industry trying to attract the best new talent and you preach a little too loudly, isn’t it bound to raise an eyebrow or two?

Cynicism aside, corporate social responsibility, or CSR, has taken businesses across all sectors by storm. Companies are now zealously telling us how much they are prepared to give back to the world. In contrast to the perception that profit is the sole criteria for measuring success, there is a shift to proclaim political, ethical, cultural and environmental objectives as well.

The general public and shareholders have begun to expect a lot more from businesses, but how much faith do they really have in the rhetoric? And how much sway does CSR hold when attracting employees?

A recent Mori poll found that 58 percent of British workers firmly believed in the importance of their company’s social and environmental responsibilities. Further research has confirmed new graduates are becoming more savvy in their career choices and are actively seeking out companies with a recognized and measured positive impact on society. So significant is this movement that universities are now churning out high-flying graduates into the labor market with an expert knowledge and dedication to CSR.

Nottingham University Business School now puts CSR high on the agenda with an MBA course specifically focused on the topic. Its website proclaims it’s “the first of its kind in Britain”, but undoubtedly it won’t be the last.

For those starting off or moving up in their careers, association with a socially responsible organization could be enticing. They may view the opportunity to work for a company that reflects their own personal beliefs as fulfilling.

Since healthcare company Novo Nordisk launched its Values in Action program, which aligns its business objectives with sustainable development principles, the company has seen a five percent drop in staff turnover.

In fact, according to research by public relations company Cherenson Group, 78 percent of employees now place working for an ethical and reputable company above receiving a higher salary. It’s an ideology echoed by General Electric’s former CEO Jack Welch.

“For stars there is a choice,” he says. “They work for companies that are in accord with their own value systems. If they don’t want to work for a polluter they will not. After all, people want to hold their heads up when they are with their peers. They don’t want an embarrassed silence when they announce who they work for. These days we value a great mission and a great working lifestyle as much as a bigger desk and the prospect of promotion.”

So the current promulgation of CSR makes it hard to believe that the top 400 companies in the UK still only invest a measly 0.4 percent of pre-tax profits in community ventures. If organizations want people to believe they are not just being sucked in by some great PR machine, they have to demonstrate a true commitment to CSR.

Valuable lessons can be learnt from companies such as Enron – once incredibly active within its local community in the US and involved in numerous high-profile charity projects, but ultimately exposed as fraudsters.

There are, however, great difficulties with recruitment and retention for organizations that suffer from negative PR and public lobbying. Starbucks, rarely out of the news for a variety of ventures and associations, has now launched its own CSR programs. In 2007, it aims to buy 60 percent of its coffee under Coffee and Farmer Equity Practices rules that promote socially and environmentally responsible farming.

There is no doubt that CSR can do a lot of good for branding, especially when it promotes the “thinking globally, acting locally” ethos. Yet, as many schemes are still in their infancy, only time will tell how successful they are. But as the old adage goes, “Happy workers are loyal workers”.