The best way to keep down CSR costs is to get consultants to set up a management system and then run it yourself, advises Richard Jones
The costs associated with corporate social responsibility and social reporting, and the fees that consultants command for collating social accounts, have sparked a protracted debate in CSR circles. One key strand in this discussion is the European Commission’s green paper on CSR, which is soon to become a white paper and may lead to the Commission calling on companies to report on the social impacts of their operations. It is also reasonable to expect the EC to include guidance on the standards to be considered for such reports and this, some argue, will be yet another cost hitting companies’ bottom lines.
The debate about costs is necessary and legitimate, but it has yet to address the question of how to do CSR and social reporting on a budget. A key challenge for CSR practitioners is to reposition CSR not only as an essential business strategy, but also as a cost-effective one.
If social reporters are to make best use of limited budgets, consultants must help to transfer knowledge and ownership of the entire CSR agenda to the companies themselves. This needs to happen not just at the headquarters of companies, but across all business units.
One way of embedding these social accounting competencies in companies is by introducing a CSR management system, not unlike the environmental management systems we are all familiar with. A CSR system supported by training provides a framework for auditing and reporting, and for managing social performance through a defined set of indicators and tools.
The first step towards establishing a CSR management system is to identify CSR, community affairs, government relations and other individual managers responsible. They then need training in the company’s CSR management system, typically on business principles, core International Labour Organization’s conventions and ethical performance indicators. Guidance notes and questionnaires would help companies define indicators for monitoring social performance and delineate timelines for meeting targets.
Specialists from outside the company should initially guide companies on the most appropriate management system. Once it has been embedded, they should hand it over for the company to run. From that point on, stakeholder dialogue will ensure the system continues to be unique to the company.
If companies manage and distribute knowledge they will produce and manage their social accounts more cost-effectively than at present. They will also create a CSR tribal memory and harness knowledge within the organization for the long term.
Richard Jones, former global social responsibilities manager
at Premier Oil, is a consultant with First&42nd
email : [email protected]