Why should you care about being a good corporate citizen? Because your employees, customers, and investors expect it

Before corporate social responsibility, or CSR, gained strength as a discipline, some organizations committed huge amounts of time and money to good causes, not expecting any monetary gain but because "it was the right thing to do." Others focused solely on the bottom line, without much concern for their employees, communities, or the environment.

These days, as people pay more attention to CSR as a strategic-management function, larger questions are emerging: what role should ROI (return on investment) play in this area? And why should businesses care about being good corporate citizens?

In future issues of Progress this column will examine some of the CSR best practices in our region and also will look at ways we're falling behind our competitors elsewhere. Progress readers are familiar with Etruscan Resources Inc. and its socially responsible investment in West Africa, and many in our business community are aware of the great niches carved out by the likes of Jacques Whitford and Maritime Paper Products Ltd.

I'll also highlight things you may not have considered as CSR strategies: mentorship or co-op programs that feed worker shortages, community investments, and environmentally sustainable initiatives that show true innovation and opportunity.

CSR isn't for the faint of heart. There is minimal short-term return, and it requires the kind of investment that a new function called marketing did 30 years ago. But in exchange, companies can expect a huge sustainable return.

Community investment, ethics, environmental issues, immigration opportunities, workplace safety, and other issues under the CSR umbrella matter to a lot of people-people you employ, people who buy your goods and services, and people who invest in your business. Employees, consumers, and investors are savvy about humanitarian and environmental issues; they are increasingly demanding that the companies they deal with demonstrate social responsibility.

David Grayson, one of the UK's leading CSR gurus, argues that sound and effective CSR policies and practices are not an end in themselves, but with public trust in corporations at an all time low, corporate social opportunities are a major factor in future growth and development.

"These global forces have led to issues such as ecology and environment, human rights and diversity, health and well-being, and communities becoming potential liabilities for companies," he says. "Once regarded as soft management issues, they are now increasingly recognized as hard to ignore, hard to predict, and hard for the business when they go wrong."

Unfortunately, too many businesses still aren't paying attention to what is coming down the pipe. CSR is often shuffled aside as a marketing or PR exercise or is defined as community investment instead of a much broader strategic function that should be an integral part of an organization's core mission and values.

If you do have a strategy, even if it's buried inside another function, you may well be ahead of the curve-and now is the time to start thinking about corporate social "opportunity" rather than "responsibility." By creating strategies around socially and ethically responsible business practices, you may well have the opportunity to become a leader in your sector.

The question remains: Can these efforts be measured against ROI, and is the triple bottom line real? Consider this: More than 2,000 leading international companies now report regularly on the environmental and social impacts of their operations, and most Fortune 500 companies have specific staff responsible for CSR.

Industry Canada, the Conference Board of Canada, and Canadian Business for Social Responsibility have all developed guidelines and metrics to measure a company's environmental and social bottom lines. Some of the benefits:

• better anticipation and management of risk
• improved reputation management
• enhanced ability to recruit and retain staff
• improved competitiveness and market positioning
• enhanced operational efficiencies and cost savings, turning waste streams into revenue streams, or realizing saving through reductions in energy use
• improved ability to attract and build effective, efficient supply chain relationships
• improved access to capital
• enhanced ability to address change
• improved relations with regulators

The perception that corporations are oblivious to public interest in favour of profit at all costs is outdated because it's not easy to make profits by treating employees poorly, foisting socially irresponsible products on consumers, and causing environmental damage.

To continue to improve, organizations must make CSR an integral management function. There is no question that CSR is hard to measure in dollars and cents, but it is still a worthwhile, and some would say crucial, investment.

Lara Ryan is a business consultant specializing in CSR. Her column can be found in every issue of Progress MagazIne. She can be reached at lara@lararyanconsulting.ca.