Leading to a Sustainable Future - Hay Group

Hay Group
FOCUS
Corporate Social Responsibility
operational adjustments made to integrate
the initiative successfully.
At the shallow end, leading an
organisation down the ‘CSR Lite’ path
is likely to be fairly straightforward.
Simple initiatives may be implemented,
ensuring policies are in place that reduce
power and water consumption or that
no stakeholder backlash is looming from
existing operations or strategies. However,
the benefits and outcomes of such an
approach are also limited.
Leading a strategic and systemic approach
to CSR is more difficult. It requires that
organisational boundaries be redefined
or eliminated and engagement with a
much broader range of stakeholders
than an organisation might typically
consider. A systemic CSR response is
likely to need a cross functional and
multidisciplinary approach to gather and
act upon sustainability information and
Position
Strategy
Operation
social input. It will also call for investment
in new information systems along
with more sophisticated approaches to
business analysis. Stakeholder engagement
programs, environmental impact studies,
product lifecycle analysis, business model
sustainability, employee engagement and
research and development are but a few
potential aspects of a comprehensive,
strategic CSR response. Leading a
systemic CSR response can be challenging,
however, as an investment in the future,
the benefits and outcomes are also greater.
A viable future
Summary of the top five issues for leaders to consider
Tactics
Alignment
Enlightened CSR leaders who are
aware of the increasingly complex and
dynamic globalised context (socially,
environmentally and economically) are
better placed to understand the emerging
requirements of their organisations.
Leaders with this insight can expect to
identify emergent strengths, weaknesses,
Where do I stand on this issue personally? How will I then
engage others in the discussion?
How deep do we want to take our CSR?
How do I need to change the way I work with my board and
top team to ensure that CSR and sustainability issues and
systems are understood and managed?
What programs, processes and information systems need
to change to implement the strategy? (Triple bottom
line accounting, action research, sustainability analysis,
stakeholder engagement systems etc.)
How do we align our response with our current and future
strategies, utilising our new understanding of a wider, longterm
business context to influence strategic decision making?
opportunities and threats for their
organisations that would otherwise not
be managed optimally. They will be better
able to lead, coordinate and understand
all these elements thereby increasing
their ability to respond in a more
integrated way. This will create a more
comprehensive view for decision-making
to ensure a systemic approach.
Behaving as a socially responsible
corporation means establishing a viable
future from a commercial point of view
while doing some good in the present.
Leaders who step up to the CSR challenge
by minimising negative impacts on the
environment and by seeking to make a
positive impact via community and social
initiatives, help drive their organisations
to a successful and sustainable future. •
1
Principles of Good Corporate Governance and Best
Practice Recommendations (2003).
2
Corporate Governance Principles and
Recommendations (2007).
CSR and sustainability as an investment
CSR is not typically on the balance sheet of many organisations. Hay Group believes
market pressure is creating a need for CSR programs that account for the risks and
opportunities associated with these less tangible resources more actively. The value
of any investment lies in the value of the underlying resources, opportunities and risks
it represents. In the same way, the value of a CSR investment is related to the social,
environmental and economic resources it both accesses and impacts.
Currently, organisations that are scrupulously tracking their financial activity may not be
consistently monitoring the opportunities and risks associated with social engagement
and the environment. In a simple example of how a CSR program could start to do this,
organisations that engage in employee climate surveys have access to rich information
about the opportunities and risks associated with their employee group – a shift in
sentiment may quickly increase employee turnover and, therefore, have direct financial
impact. A more complex risk that many organisations may soon have to face is a
carbon tax. Most local organisations produce carbon emissions (that is, are not carbon
neutral) whether through production, waste or travel. Only a minority of organisations
are monitoring this ‘externalised liability’ – but monitoring carbon emissions may soon
become a requirement and a carbon tax will become an accounting cost. CSR programs
should be seen as investments with emergent dividends. Long-term yield will become
more obvious as successful strategies identify leaders in a market that is hotting-up
around CSR, even as growth slows.
Leaders who begin to account for CSR related risks and opportunities through business
linked CSR programs, as they would more tangible assets, will be ready to face market
changes and position their organisations with a competitive advantage for a more
sustainable future.
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