In my last blog post, I examined two of five trends in Corporate Social Responsibility (CSR). This blog post covers the last three of these trends:
- Increased Transparency
- Green Technology
- Acting Locally
- Diversity and Inclusion
- Measuring CSR Impact
Even global companies are reassessing the value of local markets and supply chains. Working with local vendors reduces the emissions associated with long-range shipping. It also helps a company make its supply chains more robust by reducing the impact of global disruptions such as those we have seen recently.
Less obvious benefits of working locally include helping the local economy, expanding the local tax base and supporting local businesses.
Companies interested in CSR are also working with local governments to improve libraries, fund schools in underrepresented neighborhoods, and encourage employee volunteerism in the region where they do business.
Diversity and Inclusion
Corporate diversity was long a matter of checking boxes and making sure that different genders, races, and other categories of people had “adequate” representation in a company’s workforce.
Consumers expect more today, and CSR is based on different motives. While CSR offers both tangible and intangible benefits to a company, any successful CSR campaign is driven by a genuine desire to make companies better corporate citizens and better places to work.
For diversity and inclusion, this means going beyond checkboxes, quotas, and appearances. It means actively nurturing underrepresented communities to increase their skills and their engagement on the job. It means hiring managers who share those ideals and who will work with and for their reports to help them reach their potential. It means going out into the community and funding educational programs, internships, and other ways of increasing engagement with disadvantaged groups.
Empowering local talent and bringing diverse voices and experiences to the table are growing trends that will endure.
Measuring CSR Impact
Ever since CSR itself became a trend, businesses have tried to measure the effects of CSR initiatives on the bottom line. At first, the goal was to make a business case for CSR by showing a return on investment (ROI). Increasingly, the focus is shifting to measuring the performance of a CSR program as one might measure any other performance metric.
Measuring effectiveness starts with Key Performance Indicators (KPIs) and establishing baseline measurements for comparison. Some KPIs are tangible and straightforward to measure, such as volunteer hours worked by employees, energy savings, recycling numbers and so on. Others are “downstream” from the company, but measure the real-world impact of a program, such as the amount of new housing that employees helped to build within a program such as Habitat for Humanity, or the number of students served by company-sponsored educational programs.
Other metrics are less tangible, but still useful. A company might work with outside specialists to measure employee satisfaction, consumer loyalty, or the company’s reputation in its local community.
Whichever way companies choose to measure the effect of their efforts, expect companies to continue monitoring measures in addition to, not instead of, direct ROI for their CSR efforts.