The Business of CSR
September 11, 2007
As I talk to analysts, editors and Lawson customers about CSR, I’m regularly asked, “Why is it so important for organizations to effectively manage their CSR programs?” My typical response goes back to the basics of business. In the end, after you strip away all the different motivational drivers, CSR is a business investment. And like any other business investment, organizations have a responsibility to their customers, employees, investors and board members to effectively manage their CSR programs.
Now, if the investment – time, money, people, etc. – was insignificant, skilled management probably wouldn’t be critical; however, for many organizations CSR activities represent a sizable investment. A 2007 global CSR study by AMR Research found:
- Approximately 70 percent of all organizations have CSR programs and a dedicated CSR budget.
- In 2006, 50 percent of organizations spent 1 – 5 percent of their IT budget to manage CSR programs.
- CSR spending is growing in all areas – social, environmental or green, responsible sourcing and philanthropy.
Organizations are increasingly establishing and publicizing more formal measurement programs around their CSR activities. Here are just three examples:
- Citigroup to spend $232M on Green Data Center - Estimates facility will save 11,000 tons of carbon dioxide emissions, and cut site energy use 75 percent
- Kaiser Opts to Report, Certify Emissions - Lowered emissions by more than 2 million pounds in 2007
- Coca-Cola Unveils 100% Recycling Goal, New Plant Plans Aims to recycle or reuse all of its plastic bottles in the U.S.
Professional management of CSR programs is becoming critical. Heck, we even have corporate responsibility officers now in some organizations. Of course, managers need tools, so over the next month or so I’m planning to share some thoughts on how my IT can help organizations manage their CSR programs.
I’ll be interested in getting your feedback.
Jeff
Entry Filed under: AMR Research, CSR, End Users, Lawson. .
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Lawson Software Vice President Jeff Frank discusses his views on CSR, compliance and sustainability related issues.
1.
James Farrar | September 15, 2007 at 8:25 pm
Hi Jeff
Great to see you out here blogging on this important topic.
I think the really common issues critical to overall CSR success are stakeholder engagement, materiality assessment and assurance. Management must establish clearly that the CSR strategy is addressing the right issues and the stakeholders have to be assured of such by the CSR report. This whole process is iterative and takes time, patience and lot’s of engagement and it rarely matches the business cycle. CSR managed well really is critical to the success of the overall governance, risk and compliance management programme.
I look forward to your coming series on this topic but I would also be really interested also to hear more about Lawson’s own CSR programme and your experience there over the years — what works, what does not, your own voluntary compliance commitments etc. - what you think the big sustainability issues are for the software industry, who the stakeholders are and how to manage their concerns.
Congratulations on your blog. I think it is really, really important that we in the software industry really start to engage on CSR both as product innovators and practitioners.
Cheers
James
2.
jppfrank | September 24, 2007 at 9:39 pm
Thanks for your comments. I’d be happy to share my thoughts on CSR and the software industry, and Lawson specifically, in an upcoming post. You’ll never hear an executive from Lawson make a comment like, “There are only so many things we can do as we don’t make the things that use the power.” Of course, that’s the now somewhat infamous response Oracle president Charles Phillips gave in a recent press conference when asked about what the Oracle was doing to limit the environmental footprint of its products (http://www.businessgreen.com/2007/08/sorry-oracle-gr.html). Sorry, I couldn’t help poking a little fun at our mutual competitor. At Lawson, we know our industry and our company has sustainability responsibilities and we’re working on them.
Jeff
3.
Tim Johnson | October 28, 2007 at 12:12 am
Green is the new red white and blue. I’ve been saying that for a while and I just saw it on a magazine. Budgets for CSR are great, but solid recycling programs can help companies get started in a “revenue neutral” way. For example, a surprising amount of businesses can generate revenue doing cardboard recycling ($150+ per ton currently) and
plastics recycling as well. These programs can pay for their waste management program and provide a surplus. The big win of course is in good PR and brand equity. Green and CSR are hard to translate into shareholder value.