According to a recent report, 73% of investors say that businesses must demonstrate how they are helping communities and the environment to get their support. Corporate Social Responsibility has become a crucial part of running a business. However, successfully deploying a CSR strategy and improving it over time is not always that easy.
Why all organizations should keep improving their CSR strategy
CSR, a new business performance driver
Corporate Social Responsibility (or CSR) can be defined as “the idea that a company should be interested in and willing to help society and the environment as well as be concerned about the products and profits it makes”. CSR has become a key business performance driver.
The environmental focus of CSR policies and initiatives brings indeed the use of resources (such as raw materials, water, energy, etc) under scrutiny, contributing to limiting variable costs and operating expenses. But improved efficiency is just the tip of the iceberg.
Most of all, CSR commitments boost brand reputation by meeting new societal expectations. Both consumers and employees are looking to engage with socially responsible companies. Among respondents to a Generation Z and Millennial Deloitte survey, nearly two in five say they have rejected a job or assignment because it did not align with their values.
Why communication is key
Besides helping with customer loyalty and talent management, a good CSR track record makes it easier for a business to attract funding, as investor communities increasingly embrace CSR-based assessment criteria.
However, improvements to your CSR strategy won’t yield these benefits for your business unless you publicize it. To identify your brand as one of the “good guys,” the general public needs to know about your initiatives. Even your employees might not be fully aware of your effort if you don’t communicate properly.
The problem is: communicating effectively about CSR is a challenge. Corporate social responsibility is a relatively new space that still lacks transparency, accountability, and most of all, industry-recognized metrics.
Moreover, there’s no room for error. Over the past years, many businesses came under fire for greenwashing or social washing — i.e. making false and misleading CSR claims. So it is crucial to communicate about your CSR commitments… as long as you do it right. As we’ll see, this involves using dedicated KPIs to improve CSR strategy and performance.
How using KPIs can improve your CSR strategy
Management guru Peter Drucker reportedly said, “If you can’t measure it, you can’t improve it.” This is all the truer in terms of CSR.
Key Performance Indicators provide a quantifiable and unbiased way of measuring progress toward a desired outcome. They offer a clear framework for decision-making as they help you to prioritize your efforts and focus your resources on those initiatives that best align with your goals. In other words, they introduce focus, objectivity, and transparency into CSR.
Regularly monitoring your KPIs over time will allow you to track progress against your key CSR objectives and to identify areas of improvement or problems to solve. Crucially, KPIs empower you to demonstrate and communicate progress in an indisputable way. This way, you can keep your stakeholders updated on your effort and achievements.
Finally, using the right KPIs to monitor and manage your CSR progress empowers you to make sure that your CSR initiatives align with the overall business strategy.
Best practices to define the right KPIs and improve your CSR strategy
Not all business goals and KPIs are equal. It’s all too frequent to see business leaders set something as vague as “Greener operations” as a goal for their teams. “Greener operations”: the intention sure is good, but what do we mean by that, how do we get there, and how do we define success? This is the reason why your CSR objectives and the related KPIs should fall within the S.M.A.R.T. framework.
S.M.A.R.T. is an acronym for:
Before adding any new KPI to your dashboard, make sure it meets these 5 criteria.
You should also consider a mix of short-term goals (3 months to one year) and longer-term objectives (3 to 5 years or even longer) to account for the different time horizons of various types of programs and initiatives.
Examples of KPIs to improve your CSR strategy:
Australian tour operator Intrepid Travel has established sets of ethical marketing guidelines based on 23 measurable actions, including:
- 50% (at least) of commissioned blog stories must be voiced by BIPOC travelers
- 20 photos of plus-size travelers will be shared on social media each year
- 48-hour response time (or less) for any customer query regarding data or security
French utility Group EDF maintains non-financial commitments datasets to track KPIs such as:
- Gender balance index: percentage of women in the Management Committee of the Group’s entities
- Annual rate of projects for which a dialogue and consultation procedure is engaged
- Water intensity: water consumed / electricity generated by fleet
In a word, we’ve established the importance of setting and using the right KPIs to improve your CSR strategy and performance. However, this requires consistent access to reliable and actionable data in real time, as well as a robust analytics system to make sense of the raw information. Make sure you have solid enterprise tools in place!