REAL CSR

Meaningfully contributing to society at large

BY Jayashantha Jayawardhana

With the overall goal of contributing to the wellbeing of communities and society, which businesses affect and depend on, enterprises both large and small have been engaged in corporate, social and environmental responsibility endeavours of some form or another. But recently, there’s been mounting pressure to consider CSR as a business function and demand that all such initiatives deliver results. However, this goes against the principles of CSR where the main goal is to align a company’s social and environmental activities with its business purpose and values.

If as a result of their CSR activities, a company mitigates risks, enhances its reputation and improves business performance, all is good. But for many CSR initiatives, those outcomes are a spillover rather than a reason for being in place.

This column discusses the alignment of CSR with a fundamental goal to establish a coherent and disciplined process.In their Harvard Business Review (HBR) article titled The Truth about CSR, V. Kasturi Rangan, Lisa Chase and Sohel Karim write: “Most companies practise a multifaceted version of CSR that runs the gamut from pure philanthropy to environmental sustainability to the active pursuit of shared values.”

“Moreover, well managed companies seem less interested in totally integrating CSR with their business strategies and goals, than in devising a cogent CSR program aligned with the company’s purpose and values,” they add.

While many companies embrace this broad vision of CSR, they’re stalled by poor coordination and a lack of logic connecting their programmes. One crucial step to developing coherent CSR strategies is to learn how to assign such efforts in the most pertinent theatre of practice. The authors identify three major theatres of CSR practice.

PHILANTHROPY CSR programmes in this theatre aren’t launched to produce profits or directly enhance business performance. Some of them involve donations of money or equipment to civic organisations, engagement with community initiatives and support for employee volunteering.

EFFECTIVENESS These types of CSR programmes function in existing business models and aim at delivering social or environmental benefits in ways that shore up a company’s operations across the value chain, often improving efficiency and effectiveness. They may increase profits or drive costs down, or both; but not necessarily always.

Sustainability initiatives that reduce the use of resources, waste or emissions that may in turn drive down costs or investments to improve employee working conditions, healthcare or education that may boost productivity, retention and company reputation belong in this theatre.


TRANSFORMATION CSR programmes in this theatre develop new forms of business specifically to overcome social or environmental challenges. Improved business performance is a requirement for such initiatives and hinges on achieving social or environmental results.

After inventorying their company’s CSR activities, managers can set about developing a unified practice platform to bring coherence and discipline in their social responsibility strategies. The researchers have introduced this four step process after consulting research studies, CSR professionals and business leaders.

PRUNE AND ALIGN The lack of coherence is a major issue in CSR activities not only across different theatres but also in one. So the solution is to eliminate or cut back on the initiatives that don’t address an important social or environmental problem in keeping with the company’s purpose, identity and values. For instance, a fast food operator’s CSR programme would do better distributing excess food to an orphanage than conducting a blood donation campaign.

MEASURE RESULTS As the goals of CSR programmes under different theatres vary significantly, so do the definitions of what constitutes success in a given theatre.

In the philanthropy theatre however, CSR programmes aren’t designed to boost the top or bottom lines for business model transformation – i.e. where every CSR programme is expected to deliver tangible business results. Appropriate metrics will gauge performance based on the expected outcomes.

SYNERGISE PLANS Coordination across theatres doesn’t mean that all initiatives should invariably address the same social or environmental problem. It means that on the whole, they form a coherent CSR portfolio where initiatives are mutually reinforcing, and consistent with the company’s business purpose and values.

SMART STRATEGY Coordinated support for CSR initiatives by senior management is critical to their success. Ideally, an employee should be appointed to integrate initiatives across all three theatres even though the responsibility for individual initiatives is dispersed.