Corporate Social Responsibility: The Role and Reasons for Business Involvement in Sustainable Development

 

 

By Tracy Ging, Deputy Executive Director, SCAA

 

Corporate Social Responsibility is defined as the voluntary commitment of businesses to include in their corporate practices economic, social, and environmental criteria and actions, which are above and beyond legislative requirements and related to a broader range of stakeholders—everyone influenced by their activities.

Corporate Social Responsibility - Issue #2 2012

When we speak of sustainability, I think it is important to make one thing clear: sustainable development is not the sole responsibility of business. It is useful to point that we can set realistic expectations, and so that people and organizations can move forward effectively. Issues of sustainable development for the planet, for agriculture, and for our industry go well beyond business. While business plays an important role, for sure, and will continue to be an important part of the solution, we are looking at systemic issues that will require active participation by a broad set of actors. Yet, there is a very clear role and reason for business to be a committed partner.

That widening of the circle certainly does not absolve business and in fact it does quite the contrary by defining specific roles and responsibilities for business, generally covered under the heading of Corporate Social Responsibility (CSR). CSR assigns a role for business, but places some realistic edges that allow businesses to continue engaging in things that businesses do like growing their markets. The new demand on business is that it pursue those activities with a broader awareness of the system in which it operates, in other words with thoughtful consideration and meaningful action toward environmental and social issues.

More specifically, CSR is defined as the voluntary commitment of businesses to include in their corporate practices economic, social, and environmental criteria and actions, which are above and beyond legislative requirements and related to a broader range of stakeholders—everyone influenced by their activities.  Often captured under the more accessible heading of people-planet-profit, the definition becomes crisper looking at the United Nation’s Global Compact, which asks companies to work within their sphere of influence toward human rights, labor rights, environmental responsibility, and anti-corruption. CSR is not about philanthropy, cause-related marketing, nor generalized attempts at going “green”. It is a business strategy and one that take time to evolve.

A comprehensive CSR program includes stakeholder analysis, comprehensive strategy design that includes workplace, marketplace, societal, and environmental dimensions, activation programs, and measuring and reporting. In simpler terms it is about:

  • Understanding the context and issues within which you operate, making the best choices you can, and continually progressing your role (perspective).
  • Maintaining the desire to do better as an organization (leadership).
  • Establishing the structure/systems to ensure you have the intended impact (management).
  • Leveraging activities to bring value to the organization (communication).

More than anything, it is about commitment and that can be a difficult thing to cultivate in a business. CSR is only just emerging as a precise activity and has much room to grow. Although the field of metrics has advanced significantly in recent years, it remains challenging to accurately measure impact. Businesses accustomed to sharp calculations of return on investment are, in some ways, being asked to take a leap of faith. Ideas of management control have to be reframed as collaborative solutions take hold. You have to want to be a better business, but even those who are resistant to CSR changes should find sufficient motivation in the supply chain. While the technical definition of CSR encompasses voluntary measures, we are quickly finding there is no other choice but to actively contribute.

Climate Change | This year, we once again witnessed the effects of erratic weather in coffee producing countries. Eleven days of non-stop torrential rains affected nearly 2 million people in Central America. El Salvador was hit hardest. Beyond the human toll, the storms did considerable damage to the incoming coffee crop. Recent reports from local traders suggest production may be down by an additional 30% due to weather. Over the past decade, there have been persistent disruptions to the supply chain attributed to weather, exacerbating challenges in an already strained supply chain.

Economic Sustainability | As Michael Sheridan and Warren Armstrong elucidate in this issue, the situation for smallholder producers is challenging. Because small-scale farmers produce the vast majority of coffee—89% in Ethiopia, nearly 100% in Rwanda, just as two examples—their challenges quickly become ours. A very real outcome of systemic poverty is migration away from farms. In less than a generation, we could see the foundation of our supply chain move elsewhere.

Social Issues | When farmers struggle, the surrounding communities can suffer, making access to basic education and healthcare services difficult. As communities strain, poverty becomes embedded in the genetic code and a more difficult cycle to escape. There are a number of contributing factors including birth rates, laws of ownership, and cultural norms that businesses can’t solve. However, it is definitely within business interests to seek solutions.

One illustrative example relates to gender equality. At the recent EAFCA conference, there were several discussions about the role of women in the supply chain. It is well accepted that women do the majority of work but tend to receive little economic reward. Thus, the people picking cherries have very little connection to the end result and therefore very little incentive to contribute to a quality harvest. Social issues intersect with the supply chain and again, while sustainable development is not the sole responsibility of business, its pursuit is strategically tied to its interests.

Business is a tremendous driver and can be a powerful agent of change, but it can’t fix the impossible. Businesses shouldn’t feel over-burdened by the call to address something as challenging and layered as systemic poverty, but they should absolutely recognize the relationship to its goals and commit to its role.

FOOTNOTES:

1  From the Centre for Sustainability and Excellence.

With more than 15 years of marketing experience, Tracy Ging has spent the bulk of her career in the coffee industry, where she has worked on both sides of the supply-chain, developing a deep understanding of the market and the trends driving it. Tracy is a Certified CSR Practicioner and currently serves as Deputy Executive Director of SCAA.

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