Enterprise: between responsibility and sustainability

Developing a more responsible and sustainable business can have economic returns. A contribution to defining CSR - Corporate Social Responsibility. David Gambuli

Corporate Social Responsibility - CSR is a shared concept, even if a universally accepted definition is still lacking. As proof of this the European Commission defined it firstly in 2002 as a “a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis”. To then in 2011 adopt a simpler and more comprehensive definition: “Corporate Social Responsibility is the responsibility of enterprises for their impacts on society”.

The advantages behind CSR
According to CSR, the company is no longer merely an economic entity that absorbs workforce and generates capital, but rather also a subject that operates within one or more civil societies and environments. Hence, in line with its commitment to make its economic capital burgeon, that company should also commit itself to improving its social and environmental performance.
In short CSR can be summed up as:
1. the maximisation of the creation of shared value for the company and its shareholders.
2. Identification, reduction, and prevention of its impact.

The reasons that bring companies to implement CSR undertakings may be different: for some it stands as an opportunity to minimize reputational risks, for the others it comes under the founding principles of an enterprise, while for yet again others it can be dictated by the need to conform juridically. Whatever the case, you cannot fail to say that the development of activities of this type brings benefits to firms. In confirmation of this, among the various studies carried out, there is one made in 2009 by A.T. Kearney on the companies involved in CSR, and cited in the Dow Jones Sustainable Index or in Goldman Sachs’ SUSTAIN. This analysis has highlighted how the financial performance of the companies in question exceeded their competitors by 23%, bearing witness to how this can be the case even in times of crisis.

What does development of CSR entail?
At the present time there are no standards to certify the fulfilment of CSR practices, and the majority agree on the fact that it should stay a voluntary undertaking.
The reasons are to be found in the difference in commitments and approaches that can be implemented, even for the solution of the same problem, depending on the community involved, the type of sector, the company culture, etc. On the other hand one has the difficulty of establishing universal and satisfactory parameters that can indicate an undeniable achievement of one or more “levels of sustainability”.

Hence the possibility of approach to the CSR can be many, for example considering the ten principles of the UN Global Compact, or ISO 26000 released by the International Organization for Standardization. In particular the latter, which includes a set of guidelines, can be considered particularly useful, as it is designed to be used specifically for this purpose by small and large enterprises.
The guidelines of the ISO 26000 CSR suggest the addressing of social responsibility via seven core subjects: organisational governance, human rights, labour practices, the environment, fair operating practices, consumer issues, and community involvement and development.
Nevertheless, one must admit that, starting by considering each of these issues, it may not be a easy way out.
Often companies have one or more initiatives that can come under CSR.
In these cases one can start from consolidating and systemizing these practices, as well as developing a proper communication (particularly internally).
In fact, putting in writing what was up till then a custom or habit, will provide greater protection for such practices, also in difficult times and crises, or change of management. Furthermore, a more focused internal communication leads to a better understanding of these undertakings, both at company as well as business partners level, encouraging the practical actuation of these principles.
Once these first steps have been undertaken, one should develop indicators to monitor - and improve - the undertakings, and only at a later stage, expand the list of projects implemented.                                           

David Gambuli
With a bachelor degree in Biological Sciences and a master degree achieved in Denmark in Environmental Management and Sustainability Science, he has held various internships in various EU countries, as part of Corporate Social Responsibility, the last being at CSR Europe, Brussels.

Thinking in terms of CSR
Many may think that CSR is suitable, or is more easily applicable to companies that produce consumer goods, but this can be misleading. Indeed, while it is  not equally rooted in the B2B sector - the automation industry being typical here - there is no shortage of cases in which companies undertake CSR policies due to belief or to anticipate market trends, without necessarily calling them such or making them known.

This is also proven by a document issued by the American Chamber of Commerce in 2010, the Packaging Machinery: Sustainability and Competitiveness, which gives a few tips on how to make the automation industry in America more sustainable and hence more competitive.

- Create a sustainable strategy for the reduction of the use of materials by purchasers (including packaging materials, accessory products, energy, and water).
- Finding ways to minimize and monitor the energy consumption of products, in view of the likely future demands from purchasers.
- Use a recognized method to document the consumption of products (Total Cost of Ownership, Life Cycle Assessment, or Overall Equipment Effectiveness).
- Seek strategic partners for the development of packaging material products, accessories, equipment or automation.
Planning in a sustainable manner: machines can be easily assembled (eg helping to increase the level of flexibility, facilitating the maintenance and replacement of parts).
- Reduction or elimination of the transport of empty (for example, with the placement of the production plants of the packaging near or in correspondence with the filling plants).
- Use more efficient forms for containers (for example, square instead of round, to facilitate transport).
- Use bio-polymers in machinery.

These points alone may not be particularly revolutionary in terms of business strategy. But managing to successfully integrate just some of these aspects with initiatives that are not strictly related to the development of products, but designed to enhance social capital (through actions aimed at personal or community in which it operates), along with a good communication strategy, can be crucial both for creating a good CSR strategy, as well as for enhancing company competitiveness and ability to attract new business partners.