Justify the means
by Sarah Fister Gale // illustration by Matt Kenyon
With their often-hazy ROI, corporate social responsibility (CSR) projects can be a tempting target for the ax, even in the best of times. So when the recession hit, the assumption was that CSR investments would be the first on the chopping block. Yet these projects are thriving—albeit with a few caveats.
As companies obsess over every expenditure, they're not going to fund some feel-good project just because it's nice or it's the “right” thing to do. CSR projects have to align with the corporate brand and strategy—and there needs to be a way to prove rock-solid results.
“We haven't cut back on CSR since the recession, but we have added accountability,” says Jane Lazgin, spokeswoman for Nestlé Waters North America Inc., Greenwich, Connecticut, USA. “Funds have become more precious, so they are given more consideration. When we can define how many people a project touched, we can measure whether that project made a difference.”
It might be building schools in impoverished neighborhoods or tapping into technology to decide where to send disaster relief. Chosen properly, CSR projects can help define the brand and foster goodwill. Of the 224 global executives surveyed by IBM, 60 percent said CSR investments were more important in 2009 than the year before.
Media attention, customer support and expectations from clients and stakeholders all contribute to the drive to invest in CSR projects, regardless of the state of the economy.
“In the European Union especially, the triple bottom line—economic, environmental and social aspects—is relevant for markets and customers,” says Sara Brandimarti, Milan, Italy-based European CSR project manager at TÜV SÜD, a global industrial testing and certification company. “You need to demonstrate that you are a good corporate citizen, particularly if you have higher-priced products.”
TÜV SÜD worked with an Italian wool producer over the years to obtain social and environmental ISO certifications. Last year they teamed up again to run a project to reduce carbon dioxide emissions.
Once an organization starts a social responsibility program, it should be very wary about pulling the plug, no matter how dire the economic circumstances.
“CSR is a long-term strategy,” Ms. Brandimarti says. “It can't be something you do for one year to demonstrate you are a good company, then quit. You have to create a system for CSR and monitor your progress to ensure you are achieving the goals you set forth.”
The strategic planning process gave us parameters for investing in projects and crystallized what is important to us as a company. Now, if a great project comes along that doesn't align with one of our focus areas, we know we should decline.
—Gina Goff, C&S Wholesale Grocers, Keene, New Hampshire, USA
CSR projects may indeed be even more important now, when so many people are in need of support, says Kishor Chaukar, managing director of Tata Industries Ltd., the management consulting division of business conglomerate Tata, Mumbai, India.
“To withdraw from community projects because of one economic downturn is counter-productive,” he says. “It may save you money for that year, but you will lose the public's positive perception of your brand, and their faith in you will be shaken.”
Mr. Chaukar serves as chairman of Tata's Council for Community Initiatives. Forty of the company's CEOs use the informal forum to share ideas about how the organization can more effectively invest in society. The idea is to help foster investment ideas across the organization and spur any CEOs who are lagging to get more involved.
All of Tata's more than 100 companies around the world are required to support CSR projects. Each one is expected to report on its CSR projects annually, including a discussion of the long-term benefits to the community. To reinforce the importance of CSR, CEOs and companies are rated on the size and success of these initiatives.
“We expect them to actively contribute to society, but they are free to choose which projects they believe are important to their communities,” Mr. Chaukar says.
Tata Interactive Systems, for example, hosts an annual learning disability forum. Last year's focused on projects urging educational institutions and families to work toward detecting and providing remediation to disabled children at a younger age.
As with other projects, CSR efforts were put under the microscope. Feeling the economic squeeze, many companies started rethinking their CSR decision-making strategies to ensure the targeted audience and the business both achieve the greatest benefit.
〉TIP Companies should encourage employees to volunteer their time to social causes.
It can have a dramatic impact for little to no cost, says Kishor Chaukar, Tata Industries Ltd., Mumbai, India. Currently, 30,000 of the organization's staff volunteer an average of four hours a week. Employees offer their expertise and mobilize local community projects, such as educating teachers about nutritious cooking in neighborhoods with high rates of child malnutrition. The organization also lets team members tap into office resources like printers.
That includes setting greater expectations for measurable goals and outcomes from CSR projects, says Dave Nielsen, PMP, founding partner of ThreeO Project Solutions, a project management training and consulting company in Toronto, Ontario, Canada.
“CSR projects should have goals and objectives just as for-profit projects have,” he says. “How else will you know if you've succeeded?”
To make the most of a corporate social responsibility (CSR) program, companies should zero in on the areas that align with their strategy, says Jane Lazgin, Nestlé Waters North America Inc., Greenwich, Connecticut, USA.
“You don't want to fund isolated random projects,” she explains. “You want to find long-term initiatives that reflect the way you do business and create shared value in the community.”
The Swiss food conglomerate ties its brand—and its CSR projects—to water, wellness, nutrition, sustainability and economic vitality.
A major element of the company's CSR strategy is preparing at-risk areas for potential disasters. Having resources at the ready, Nestlé was able to help AmeriCares, a global health and disaster-response not-for-profit, provide 2.5 million bottles of water to victims of the earthquake in Haiti.
“Part of our CSR process is knowing the unexpected will happen and planning for it,” Ms. Lazgin says.
Project managers tasked with Nestlé's CSR initiatives are required to report on how much money and how many people are involved as well as feedback from participants on the value of the project. Such metrics help the CSR team prove the value of their investments to stakeholders.
“It's a driver for greater transparency, goal-setting and reporting for CSR projects,” Ms. Lazgin says. “It adds value to the company and it helps us determine what projects to support in the future.”
Companies may also want to offer their project management expertise to the community organizations they partner with.
“The typical agencies applying for CSR funding have a good grasp of what they want to do, but they do a poor job of defining their goals and objectives,” Mr. Nielsen says. “While those goals won't be tied to profits, you can still identify quantifiable measures, such as number of people reached or amount of resources brought into the community.”
Seeking tangible, measurable outcomes for its CSR projects, C&S Wholesale Grocers launched a strategic initiative in 2008 to define the focus areas the company supports. The goal was to more efficiently identify projects that align with the company's values and goals. Through that process, C&S zeroed in on global hunger, local impoverished children and the environment.
“The strategic planning process gave us parameters for investing in projects and crystallized what is important to us as a company,” says Gina Goff, director of community involvement at the Keene, New Hampshire, USA-based company. “Now, if a great project comes along that doesn't align with one of our focus areas, we know we should decline.”
The company also put greater emphasis on employee involvement in the decision-making process for smaller donations. Groups of local workers volunteer to evaluate community grant requests for CSR projects and choose those they think will bring the most value to the communities where they work and live. Staffers in Upper Marlboro, Maryland, for example, recently supported a project through the local Humane Society to pair dogs in shelters with veterans for obedience training.
The portion of global executives who said CSR projects were more important in 2009 than in the previous year
The corporate team handles larger requests by invitation only. Pre-selected organizations that fit in with the company's CSR strategy can submit proposals for specific projects. The plans must include objectives and goals, deadlines, the size and experience of the team managing the project, and how it ties into one of C&S' focus areas.
The company is currently partnering with Feeding America, for example, to expand its program to hand out backpacks filled with food to underprivileged children.
C&S quantifies its goals—in this case, the company aims to reach 50 percent more children over the next three years. As part of the funding criteria for any of the CSR programs, project managers must provide progress reports.
“The best projects are ones that are clearly defined with measurable outcomes,” Ms. Goff says. “Grantees can only apply for one project, so those conversations help them choose and shape the one that makes the most sense.”
A faltering economy raises the profile and the pressure for CSR projects. It's not the end of corporate citizenship—there just has to be a solid payoff for both the company and the community. PM
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