Some companies focus their CSR efforts on issues such as climate change, setting goals to limit and mitigate their carbon footprint. Other companies focus their CSR programs on visible social initiatives and charitable giving, highlighting their involvement in local and global communities. The approaches used to address CSR issues are diverse as is the style in which they are communicated in annual reports, press releases, and websites.
Companies that have accelerated the alignment of CSR initiatives with business objectives recognize the link between CSR and financial performance, and these same companies clearly communicate a story to stakeholders about how CSR initiatives help reduce costs, minimize risks, create new business opportunities, and enhance relationships with customers and suppliers.
Whether your company is just starting out with CSR or looking to add to your existing efforts, you’ve got a few good choices of CSR strategies that will get the most out of your efforts. CSR strategies can be characterized as operations-driven, compliance-driven, or customer-driven.
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Operations-Driven CSR Strategy
Companies implementing an operations-driven CSR strategic platform take leadership positions on issues that directly influence the competitive nature of the goods and services they deliver to the marketplace.
Additionally, companies following this strategy may actively engage in strategic and innovative actions to enhance the performance and reputation of their partners, which they see as a critical part of their own success. For example, some electric utilities recognize the impact climate change will have on their core business function—generating electricity. Accordingly, they have focused their CSR activities on pursuing new “greener” supply options and introducing climate-related goals to reduce GHG emissions while still providing reliable service at competitive prices. Leaders in this area value CSR-related investments such as energy efficiency and alternative energy sources as much as they value investments in a physical asset.
On the manufacturing and product side, there are companies that espouse the goal of manufacturing low-cost products in a socially responsible way that minimizes impacts on the environment. From a CSR perspective, this business vision has been translated into a suite of initiatives from raw material sourcing to the retail and customer level, including resource efficiency, product stewardship, energy reduction, material consumption, and environmental and social responsibility across supply chains. For instance, to minimize the impact on the environment, one company requires the sourcing of wood cultivated exclusively from responsibly managed forests, as well as incorporating recycled wood waste and other innovative, low-impact materials.
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Companies that implement an operations-driven strategy also urge suppliers to employ sustainable manufacturing techniques, practice minimum labor standards, and comply with human rights and environmental protection requirements. At the facility level, these companies focus on internal energy conservation and waste reduction, which includes recycling spent products, such as discarded packaging, batteries, and lights. In short, they have a clear strategy to produce more value and to systematically reduce energy and material consumption.
Companies that follow an operations-driven CSR strategy will typically track CSR performance and progress through associated business metrics, which are often linked to financial metrics and cost savings.
Examples of CSR Metrics – Operations–Driven Strategy
- Time to Market
- Revenues from Asset Management Activities
- Operational/Facility Efficiency
- Stakeholder Involvement
- Reduced Environmental Footprint
- Green Supply Chain
See tomorrow’s Advisor for ideas about corporate-driven and compliance-driven CSR strategies.