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Has CSR reached its sell-by date? Part 1

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According to the textbooks, CSR – corporate social responsibility – is broadly defined as a voluntary commitment from business to embrace responsibility for its actions and to impact positively on the environment, on society and on consumers, employees and other stakeholders.

Read part 2 here.

If everyone agreed on this definition and if CSR did effectively enable business to increase its positive impacts, then I would be its most vociferous cheerleader. Unfortunately, the reality is that CSR, as currently understood and implemented, is not fit for purpose. In fact, I believe it was fundamentally flawed from the very beginning.

In her recent article, What is CSR?, Ilaria Bertini explores largely the textbook definitions. However, she does mention one of the larger elephants in the room by noting that some critics argue “CSR programmes undertaken by companies like McDonalds and BP are ways to distract the general public from their unethical business.”

I have worked in what pro-market commentators refer to disparagingly as ‘the burgeoning CSR industry’ for more than 11 years. But you don’t need me to tell you that while CSR has been en vogue and thousands of the world’s largest businesses have been busily ‘doing CSR’, the enormous challenges and threats to our planet and future remain unsolved.

Indeed, finite natural resources are being depleted at a quickening rate, the environment is increasingly degraded and the wealth gap between the winners and the losers continues to widen apace – to provide but a few examples. Further, corporate fraud and scandal remain commonplace and public trust in business is at an all-time low. Evidently, CSR isn’t working.

My charges against current CSR, which I will discuss in greater detail in a subsequent article, are as follows:

1 – It is a waste of precious business resources. It costs time and money for businesses to ‘do CSR’ and produce reports that no one reads. Those precious resources should be invested in improving actual responsibility practices instead

2 – It ignores the fundamentals of capitalism. That is, offloading costs onto society and the environment and exploiting stakeholders as and where possible is how business currently maximises profit

3 – The brand and marketing people control the message and they will only approve positive messages. This prevents businesses from providing honest, believable appraisals of their negative impacts on society and environment; and thus honest, believable plans for putting things right

4 – Businesses that ‘do CSR’ keep making the wrong kinds of headlines, e.g. Starbucks, HSBC and Serco to name but a few

5 – Too often, CSR is about talking up the little bit of good a business does in an attempt to offset or divert attention from a whole lot of bad, as illustrated below (see point 3)

Talking about the good to divert attention from the bad is not responsible

6 – When used as a cynical device to continue with ‘business as usual’, CSR is downright fraud

As a result:

7 – CSR is not relevant or believable to the man in the street and

8 – CSR destroys public trust

I advocate we bin the term CSR altogether and find new ways to do genuinely responsible, ethical, fair, sustainable business and demonstrate that that is what we are doing.

I am not naïve as to how challenging being in business is. I started our company 10 years ago and know all about the hard reality of balancing the books, staying abreast of the competition and delivering the goods and services people want at the appropriate quality and price. This makes it all the clearer to me just how absurd it is to persist with CSR as it is.

Given the mess the world is in, given how serious that is, and given we desperately need business to serve society – not the other way round – I challenge all those businesses that are ‘doing CSR’ to prove that what they say is a genuine reflection of what they do.

Businesses are either fully committed to adopting the best responsibility practices possible, right across their organisations, or they are not. Businesses are either fully committed to decreasing their negative impacts on society and the environment and increasing their positive impacts or they are not.

The milestones they need to reach are set out in the illustrations below.  Can there be any other test of business responsibility that is simpler or clearer?

Responsibility journey: milestone 1 – the good equals the bad

Responsibility journey: final destination - the good outweighs the bad

Not only do I believe that this can be done without businesses reducing their profits, I believe a genuine positive approach to meeting stakeholder expectations of social responsibility can increase profitability.  Profit is the most potent driver of business. Genuinely responsible, ethical practices can become a source of competitive advantage. In doing so, we all – businesses, society, and the planet as a whole – benefit.

I am convinced the changes that need to be made are wholly achievable. They start with simple openness and honesty. By simply admitting the challenges they face, businesses can gain credibility and build trust.

Profit Through Ethics, the company I founded, has built the tools needed to do this and is building a social movement which makes real responsibility a driver of profitability and creates better businesses for a better world.  If you are persuaded by this critique of CSR and interested about this movement, please join us at www.responsible100.com.

Michael Solomon is director of Responsible 100On April 15, an event in London will question whether CSR has reached its sell-by date. Click here to find out more information, and here to read the second part of this article.

Further reading:

Some corporate social responsibility has ‘gone stale’

‘Corporate social responsibility is an attitude of mind’

Sustainability in the workplace reflects on employees’ personal choices, says study

Taking steps towards a new ethical age of business

Merging the great business dilemma: profit v sustainability, responsibility and ethics

Michael Solomon is the director of Responsible 100. With a background in publishing, Michael hit upon the basic Responsible 100 concept when asked to launch a new CSR magazine and website. Troubled by the motives for large corporates to engage in CSR and the quality of their CSR outputs, he saw the need for an alternative approach which guaranteed credible information from businesses. Responsible 100 is a management tool, a business ranking, a public internet platform, an identification mark and a growing social movement. It includes leading businesses as well as NGO and campaign group partners.

Economy

How Going Green Can Save A Company Money

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going green can save company money
Shutterstock Licensed Photot - By GOLFX

What is going green?

Going green means to live life in a way that is environmentally friendly for an entire population. It is the conservation of energy, water, and air. Going green means using products and resources that will not contaminate or pollute the air. It means being educated and well informed about the surroundings, and how to best protect them. It means recycling products that may not be biodegradable. Companies, as well as people, that adhere to going green can help to ensure a safer life for humanity.

The first step in going green

There are actually no step by step instructions for going green. The only requirement needed is making the decision to become environmentally conscious. It takes a caring attitude, and a willingness to make the change. It has been found that companies have improved their profit margins by going green. They have saved money on many of the frivolous things they they thought were a necessity. Besides saving money, companies are operating more efficiently than before going green. Companies have become aware of their ecological responsibility by pursuing the knowledge needed to make decisions that would change lifestyles and help sustain the earth’s natural resources for present and future generations.

Making needed changes within the company

After making the decision to go green, there are several things that can be changed in the workplace. A good place to start would be conserving energy used by electrical appliances. First, turning off the computer will save over the long run. Just letting it sleep still uses energy overnight. Turn off all other appliances like coffee maker, or anything that plugs in. Pull the socket from the outlet to stop unnecessary energy loss. Appliances continue to use electricity although they are switched off, and not unplugged. Get in the habit of turning off the lights whenever you leave a room. Change to fluorescent light bulbs, and lighting throughout the building. Have any leaks sealed on the premises to avoid the escape of heat or air.

Reducing the common paper waste

paper waste

Shutterstock Licensed Photo – By Yury Zap

Modern technologies and state of the art equipment, and tools have almost eliminated the use of paper in the office. Instead of sending out newsletters, brochures, written memos and reminders, you can now do all of these and more by technology while saving on the use of paper. Send out digital documents and emails to communicate with staff and other employees. By using this virtual bookkeeping technique, you will save a bundle on paper. When it is necessary to use paper for printing purposes or other services, choose the already recycled paper. It is smartly labeled and easy to find in any office supply store. It is called the Post Consumer Waste paper, or PCW paper. This will show that your company is dedicated to the preservation of natural resources. By using PCW paper, everyone helps to save the trees which provides and emits many important nutrients into the atmosphere.

Make money by spreading the word

Companies realize that consumers like to buy, or invest in whatever the latest trend may be. They also cater to companies that are doing great things for the quality of life of all people. People want to know that the companies that they cater to are doing their part for the environment and ecology. By going green, you can tell consumers of your experiences with helping them and communities be eco-friendly. This is a sound public relations technique to bring revenue to your brand. Boost the impact that your company makes on the environment. Go green, save and make money while essentially preserving what is normally taken for granted. The benefits of having a green company are enormous for consumers as well as the companies that engage in the process.

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Energy

5 Easy Things You Can Do to Make Your Home More Sustainable

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sustainable homes
Shutterstock Licensed Photot - By Diyana Dimitrova

Increasing your home’s energy efficiency is one of the smartest moves you can make as a homeowner. It will lower your bills, increase the resale value of your property, and help minimize our planet’s fast-approaching climate crisis. While major home retrofits can seem daunting, there are plenty of quick and cost-effective ways to start reducing your carbon footprint today. Here are five easy projects to make your home more sustainable.

1. Weather stripping

If you’re looking to make your home more energy efficient, an energy audit is a highly recommended first step. This will reveal where your home is lacking in regards to sustainability suggests the best plan of attack.

Some form of weather stripping is nearly always advised because it is so easy and inexpensive yet can yield such transformative results. The audit will provide information about air leaks which you can couple with your own knowledge of your home’s ventilation needs to develop a strategic plan.

Make sure you choose the appropriate type of weather stripping for each location in your home. Areas that receive a lot of wear and tear, like popular doorways, are best served by slightly more expensive vinyl or metal options. Immobile cracks or infrequently opened windows can be treated with inexpensive foams or caulking. Depending on the age and quality of your home, the resulting energy savings can be as much as 20 percent.

2. Programmable thermostats

Programmable thermostats

Shutterstock Licensed Photo – By Olivier Le Moal

Programmable thermostats have tremendous potential to save money and minimize unnecessary energy usage. About 45 percent of a home’s energy is earmarked for heating and cooling needs with a large fraction of that wasted on unoccupied spaces. Programmable thermostats can automatically lower the heat overnight or shut off the air conditioning when you go to work.

Every degree Fahrenheit you lower the thermostat equates to 1 percent less energy use, which amounts to considerable savings over the course of a year. When used correctly, programmable thermostats reduce heating and cooling bills by 10 to 30 percent. Of course, the same result can be achieved by manually adjusting your thermostats to coincide with your activities, just make sure you remember to do it!

3. Low-flow water hardware

With the current focus on carbon emissions and climate change, we typically equate environmental stability to lower energy use, but fresh water shortage is an equal threat. Installing low-flow hardware for toilets and showers, particularly in drought prone areas, is an inexpensive and easy way to cut water consumption by 50 percent and save as much as $145 per year.

Older toilets use up to 6 gallons of water per flush, the equivalent of an astounding 20.1 gallons per person each day. This makes them the biggest consumer of indoor water. New low-flow toilets are standardized at 1.6 gallons per flush and can save more than 20,000 gallons a year in a 4-member household.

Similarly, low-flow shower heads can decrease water consumption by 40 percent or more while also lowering water heating bills and reducing CO2 emissions. Unlike early versions, new low-flow models are equipped with excellent pressure technology so your shower will be no less satisfying.

4. Energy efficient light bulbs

An average household dedicates about 5 percent of its energy use to lighting, but this value is dropping thanks to new lighting technology. Incandescent bulbs are quickly becoming a thing of the past. These inefficient light sources give off 90 percent of their energy as heat which is not only impractical from a lighting standpoint, but also raises energy bills even further during hot weather.

New LED and compact fluorescent options are far more efficient and longer lasting. Though the upfront costs are higher, the long term environmental and financial benefits are well worth it. Energy efficient light bulbs use as much as 80 percent less energy than traditional incandescent and last 3 to 25 times longer producing savings of about $6 per year per bulb.

5. Installing solar panels

Adding solar panels may not be the easiest, or least expensive, sustainability upgrade for your home, but it will certainly have the greatest impact on both your energy bills and your environmental footprint. Installing solar panels can run about $15,000 – $20,000 upfront, though a number of government incentives are bringing these numbers down. Alternatively, panels can also be leased for a much lower initial investment.

Once operational, a solar system saves about $600 per year over the course of its 25 to 30-year lifespan, and this figure will grow as energy prices rise. Solar installations require little to no maintenance and increase the value of your home.

From an environmental standpoint, the average five-kilowatt residential system can reduce household CO2 emissions by 15,000 pounds every year. Using your solar system to power an electric vehicle is the ultimate sustainable solution serving to reduce total CO2 emissions by as much as 70%!

These days, being environmentally responsible is the hallmark of a good global citizen and it need not require major sacrifices in regards to your lifestyle or your wallet. In fact, increasing your home’s sustainability is apt to make your residence more livable and save you money in the long run. The five projects listed here are just a few of the easy ways to reduce both your environmental footprint and your energy bills. So, give one or more of them a try; with a small budget and a little know-how, there is no reason you can’t start today.

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