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14 June 2010
CSR and the sustainable bottom line
Legally the expectations of Danish companies’ CSR efforts cannot be missed – the Danish Parliament (Folketinget) has changed the Financial Statements Act so that Denmark’s 1,100 largest companies are now obligated to account for their CSR efforts. So, tough job or not, the CSR report is now mandatory, but it is also an important communication tool for businesses.

Looking at the Corporate Branding landscape of the past five to ten years, it might seem as if a lot of companies have thought that CSR is something that can be bought. And that a reputation for being a responsible and decent company can be achieved through extensive marketing talking about the company’s latest donation or CSR effort. Obviously it’s good to tell everyone that you are making the world a better place, but however nice it sounds, we can’t all sponsor the Tibetan national team.

Fortunately, however, CSR can also focus on better conditions on the home front. Active use of CSR can help to show how a company makes an effort in every part of its value chain, from choice of subcontractor until the customer receives the product, to doing as good a job as possible. That a company does what it can where it makes the most sense for that company.

In addition to showing what is actually being done, CSR communication is also about explaining what you perceive as a committed and decent company that is up to date with the expectations of your surroundings. This can be done in a lot of ways, some more elegant than others. Some companies still choose to shout from the rooftops about their CSR efforts. Most choose to be less vocal. And finally there are those who say nothing at all, often after some heat from the press about promising more than they delivered. CSR obligates.

Pitfalls in CSR work
In spite of several companies’ beautifully phrased CSR strategies, codes of conduct, ethical accounts etc, there are numerous examples of exposés on child labour, pollution and pitiful working conditions, where Danish and international companies have violated their own – perhaps slightly too idyllic – CSR policies.

“It is completely free for a company to promise to be socially responsible in the countries where it operates. But the many media crises show that it is just about impossible for a Danish company to check whether or not every single element of the detailed CSR strategy is being adhered to in workplaces on the other side of the world. For this reason every CSR strategy has a certain potential for crisis, which companies must not overlook. An uncovering of a possible CSR scandal is a treat for daily newspapers and TV reporters, and in the past few years a lot of them have managed to dig up cases in remote locations, where a company has turned out not to be keeping its own promises. Therefore one might worry that more and more journalists will begin using a company’s CSR strategy as a manual for what to check”, explains Senior Advisor at Related Henrik Eske.

The world can’t be saved in one day
It can be quite the challenge for any communications or CSR manager to be held accountable for a company’s CSR strategy by a horde of hungry reporters, who are prepared to travel across the world to reveal the next case about child labour or subcontractors that do not meet the Western ideal for morals and ethics. This is why a CSR strategy needs to be thought through carefully and be an integral part of the company’s overall business strategy rather than just a clever marketing tool. And it shouldn’t be something a company throws itself into headfirst because fashion demands it.

“First off a company needs to set realistic goals in its CSR strategy. You have to remember that no one can be a hundred per cent green and environmentally responsible, and that no one expects you to be – unless that’s what you promise to be! As always it is a good idea to start small and activate one CSR project at a time and then add more and more projects as you go along, depending on your resources. This can help clarify which aspect of the value chain a company needs to focus its efforts on. As a company you can’t change the world from one day to the next, but you can help pull us all in the right direction”, says Henrik Eske.

Communicate to discreet channels
It can be tempting to pull on all of a company’s external communication channels in order to tell the world how socially, ethically and environmentally responsible you are. But there is a snake in Paradise:

“Five years ago it might have been allowed to shout about a company’s social responsibility with nothing to show for it. But today you have to be careful about that, because over-communication about CSR often makes you look bad. Because as the saying goes, don’t tell it, show it – and you have to show that you’re actually as good as you say you are. At the same time it sends an unfortunate message if more money goes into telling about one’s good deeds than into the cause itself. This is why a lot of companies choose to let their CSR efforts be communicated through more discreet channels, such as their annual report and website, rather than making a big deal of it in their marketing”, explains Henrik Eske.

Are you ready for CSR – three pieces of advice: 
1.  CSR obligates. Don’t promise more than your company can deliver, and ask yourself if it isn’t better to tell the world what you’re working towards than to claim that you’re already there.

2. Start small. We all have to start somewhere, so don’t be intimidated if other companies seem to be doing more than you. Instead, show where you’re making a difference and explain why you choose to focus your efforts there.

3. Decide if you really need to tell everyone about it. Is your CSR strategy to be used in your marketing strategy, or is it a question of improving your reputation, or is CSR simply a natural part of being a modern, responsible company?

Medieministeriet helps you move forward…
Grab a hold of Related if your company is getting ideas about CSR or if you wish to revise your current CSR strategy. We’re happy to have an informal talk about how to approach CSR, what CSR can be used for and what you need to think about before you begin.

 

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