Frankly CSR

I was struggling.  My actions and constant reminders around “green” practices weren’t having much of an impact on my daughter, 8, and son, 6. 

“Please turn off the TV when you’re not watching it.” 

“Remember to turn off the lights in your room when you leave.” 

“Hey, that paper should go in the recycling, not the garbage.”

“Do you really need to take such a long shower?”

My words were falling on deaf ears.  Then one day about two weeks ago we were out for a walk and my daughter went out of her way to pick up a discarded aluminum can along the trail.  Then it was a piece of paper, followed by plastic bag.  “Emily, that’s really nice of you, but what made you decide pick up the garbage?” I asked.  She said her school teacher talked to the class about Earth Day and how we all need to take care of the planet.  Her class was planning a clean up project for April 22.  She was just getting a head start.

I asked Emily if she understood that all those things I had been asking her to do at home were also about taking care of the planet.  “Yeah, I get it,” she said.  And I believe her, because there has been a noticeable difference in her attention to all of our home practices in the last week.

It’s amazing to see the influence teachers and a special day can have on kids. Thank you Earth Day, and thank you Mrs. Brown.

Jeff

I must admit, when I started this blog last August, I was a little apprehensive about commenting on what other companies and industries are doing (or not doing) in the area of CSR, since I was writing the blog as a representative of my employer, Lawson.  While Lawson has a long history of being active in its communities and maintains a very strong employee code of conduct, like most companies, Lawson’s formal CSR programs are still evolving.  My objective has been to evaluate and comment on CSR news, trends and activities without implying that Lawson has perfected its approach to CSR. 

With Lawson’s announcement last week of a new global community service program, I thought it was a good time to talk a little more about what Lawson is doing in the area of CSR.  The community service program I just mentioned is intended to encourage every Lawson employee to use up to eight hours of company-paid work time during a year to volunteer for a community service activity. The program is designed to support Lawson employees who currently do various types of community service and to help motivate other employees to volunteer their time in their communities.  With approximately 4,200 employees around the world, the goal is that individually and collectively Lawson employees can have a positive impact in their communities.  

Lawson’s plan is for the community service program to become part of a broader CSR initiative that is expected to include a formal environmental program and sustainability reporting.  Lawson is already a stakeholder in the Global Reporting Initiative (GRI).  Over the last year we have become active in several of GRI’s sector activities for Lawson focus markets such as food processing and apparel and footwear.  As part of our GRI membership, we are in the process of formulating our own sustainability reporting approach. 

If you have followed my blog you also know Lawson has been focused on how it can help customers better manage their CSR programs using Lawson products (see posts from September 24, October 4, October 18, March 17).  It’s an area that is gaining momentum. 

Borrowing an old Nike advertising slogan, “there is no finish line.” This is particularly true when it comes to CSR. CSR is evolving and Lawson will continue to assess how it can make a difference.  

Jeff 

There’s an incredible amount of activity taking place in the area of sustainable supply chains.  Because supply chain challenges are so broad, it is hard to capture the full scope of what’s happening.  In those situations, I tend to look for examples of activities that are having a real impact on business. Here are a few such examples: 

-        Wal-Mart, which has launched a host of sustainable supply chain programs,   implemented a new supplier packaging scorecard on February 1 that formally rates suppliers on their progress toward developing sustainable packaging, as well as their ability to help Wal-Mart reach its company-wide sustainability goals to reduce waste, use renewable energy and sell sustainable products. 

-        HP recently published a set of guidelines aimed at helping large corporations encourage sustainability throughout their supply chain.  The goal is to help multinationals better equip their suppliers – especially small and medium-sized business – to effectively compete in the global market while improving environmental standards. 

-        One of the organizations Lawson has been talking to about supply chain sustainability is the European Supply Chain Institute (ESCI).  ESCI is a member-driven organization that researches all areas that will have a direct, positive impact within the supply chain.  Last September, ESCI formed a new group called the Supply Chain Carbon Council to research issues related to carbon emissions in the supply chain and make recommendations.   

So what’s one of the main paths the Supply Chain Carbon Council is taking to help address carbon emissions?  Information technology.  Here is the Council’s position: 

“Businesses need to focus less on how IT contributes to their environmental impact and more on how IT can help lessen the environmental impact of their supply chain operations.  While making IT more green must remains a concern, there are areas where deploying more IT can significantly contribute to making an organization’s supply chain activities more environmentally sustainable.” 

I think this is an innovative strategy. Admittedly, I have a bias in this area because I work for a software company, but the reality is we need to approach our sustainability issues from many angles, and there’s a mounting belief that IT can be a key contributor. 

Jeff

Having the right attitude can make a significant difference in life, and in business.  A white paper published last week takes a close look at how businesses, especially their leaders, need to change their attitude toward sustainability in order to recognize the opportunities available to them.

“A New Mindset for Corporate Sustainability,” which was co-sponsored by BT and Cisco, was written by six academic experts from the United States, China, United Kingdom, Singapore and Spain.  The title of the paper caught my attention immediately because of the phrase: “New Mindset.” The paper addresses what I, and others close to CSR, believe is one of the biggest roadblocks to the broader adoption of sustainability strategies, namely an attitude that these practices are costly to businesses, inhibit growth and negatively impact the bottom line. 

The paper presents sustainability as a catalyst for innovation. More specifically, innovation that can create new business models, open up new markets, produce a competitive advantage and improve profitability. In the end, the best part of the paper for me was the 16 “case studies” that provide real-world examples of how some leading companies are innovating in the area of sustainability. 

The paper also includes 10 steps companies should take to drive innovation via sustainability: 

1.      Make innovating for sustainability a part of your company’s vision

2.      Formulate a strategy with sustainability at its heart

3.      Embed sustainability in every part of your business

4.      Walk the talk (actions speak louder than words)

5.      Set up a body with the power to make sustainability matter

6.      Set firm rules (code of conduct)

7.      Bring stakeholders on board (and encourage participation)

8.      Use people power

9.      Join the (sustainability) networks

10.  Think beyond reporting: align all business systems with the company’s vision of sustainability 

While I didn’t see anything appreciably new in these steps, it is a fairly comprehensive process that provides a practical, proven framework for companies to follow. The paper is available for download at Bigger Thinking / Innovation. 

Jeff

I participated in a CSR Web event last week hosted by Apparel magazine and sponsored by Lawson. The session focused on CSR issues and trends in the apparel industry, with the main focus on environmental or green programs. The other presenters included John Davies, vice president, Green Research at AMR Research, and Meirav Jones, global development and marketing director at Delta Galil Industries, a leading apparel company and Lawson customer. 

As I talked with Lawson customers while preparing my presentation content and worked with the other presenters, I was reminded how much every industry – and every company for that matter – needs to evaluate and understand what green means for them and where they can have the most significant impact. Certainly, the apparel industry faces challenges common to most industries, such as the consumption of water and energy during manufacturing processes. However, the apparel industry also has its own set of unique issues. During the session, Meirav Jones provided a very interesting statistic:  approximately 25 percent of an individual’s carbon footprint is associated with clothing.  One-third of that is related to washing and dying the clothing, the remainder is associated with producing the raw materials, the manufacturing process and transporting the clothing. With that in mind, it’s no surprise that some of the leading focus areas for the apparel industry include:

• Use of sustainable and recycled fibers, yarns and accessories – examples include organic cotton, bamboo, hemp and linen
• Reducing fabric dye cycles
• Reducing product packaging
• Use of non-toxic chemicals in fabrics production
• Development of fabrics that require shorter wash cycles and can be washed in cold water
• Bringing the supply chain – suppliers to manufacturer to customers – physically closer.

 During the event we asked the audience a question regarding the main driver behind their own organization’s environmental programs. When I have asked this question of other groups, the main driver has almost always been to comply with regulatory requirements or to strengthen their company’s brand or image. However, in this case, the leading reason was to create new business opportunities. It’s clear innovative apparel companies are learning that consumer demands are changing and their green programs can be good not only for the environment, but also for their bottom line. 

Jeff

I was having a conversation with a friend the other day on the topic of CSR. I was on the pro-CSR side (of course); he had the anti-CSR position. Predictably, as the conversation got spirited, he invoked the name Milton Friedman and his famous 1970 article in The New York Times Magazine, “The Social Responsibility of Business is to Increase its Profits.” It was predictable because there is hardly a debate on CSR that does not at some point find its way around to Friedman’s position on the topic.   

We all want our views validated.  In the IT industry that often comes via analyst firms.  A year or so ago when Lawson began looking at the role IT in CSR, very few analysts were talking about it. That’s changing – quickly. Some recent examples include:

At its recent Symposium/ITxpo in Orlando, Green IT topped Gartner’s list of the top 10 technologies and trends that will be strategic for most organizations in next few years.  Gartner focused primarily on hardware and data centers.  Green IT occupied the top 10 list with more “traditional” IT topics like business process modeling, metadata and Web platforms.

Forrester recently released a report entitled, Creating a Green IT Action Plan. It’s essentially a “how to” guide CIOs can use to create and implement Green IT programs.  The report has a broader perspective than just hardware and data centers, looking at the role of the IT organization in an organization’s overall CSR initiative.

AMR Research has probably done more than any analyst firm around the area of CSR and sustainability.  AMR launched a green technology research service in 2006 and most recently initiated the Sustainability Peer Forum. Introduced in August 2007,  the forum brings together a variety of environmental and sustainability industry leaders to share and discuss best practices, lessons learned and business strategies that support their sustainability efforts. 

I’m excited about how this focus by analysts will help validate the topic and drive the CSR message to more organizations.  In particular, I hope it will get IT professionals thinking about how they can lead the way.

Jeff

This is the final post in the series on using business software to help manage CSR programs.  Represented at the top of the diagram, enterprise performance management (EPM) software is the essential piece of the overall CSR Solution Framework because it’s where CSR activities really get managed.

EPM, which includes some very cool technology,  is my favorite part of the framework. It represents the access point or portal that delivers key information to executives and CSR knowledge workers. Business intelligence, as it’s often referred to, is typically delivered via dashboards, scorecards, reports, automated workflows and alerts. The goal is to help organizations more effectively analyze situations and then take action.

So, let me tie the whole framework together using the topic of workforce diversity. While EPM can be used to measure multiple factors within the environmental, social, and economic pillars of your CSR program, workforce diversity is a good example because it’s an element of CSR that impacts all organizations and encompasses both regulatory compliance and self-established standards.

• ERP Applications - Creates a central repository of transactional data such as age, gender, ethnicity and other indicators of protected class status. The applications, such as human resources, financial, and activity management, also maintain key comparative data such as salary, department, geographic location, and position.

• Internal Control System - Maintains all regulatory (e.g., EEO, Affirmative Action) and organizational (e.g., diversity standards and policies) documentation. It assigns resources to processes and controls, monitors testing, exception analysis, and remediation activity. The system also produces a risk management assessment.

• Enterprise Performance Management – Generates dashboards that provide a snapshot of key diversity information and a single point of access to detailed reports. Custom alerts notify HR managers of key events and potential issues, while automated workflows guide hiring managers through recruiting and talent management processes highlighting relevant diversity information.

From labor practices to green initiatives to community programs, my experience is the framework holds up well.  I hope this series of posts gives you some food for thought as you look at how you might manage your own CSR programs. 

Jeff

In my last post, I outlined how ERP systems can and should form the foundation for CSR program management. Moving up a level in the CSR Solution Framework, in this post, I will focus on the use of an internal control system. 

In my experience, almost all CSR programs contain elements of governance, risk management and compliance. Let’s face it, the fear of risk and regulatory penalties provides great motivation for organizations to undertake CSR programs. While these are definitely not the most altruistic reasons on which to base a CSR program, organizational stakeholders still benefit from the activities. 

Today, there is a category of software labeled Governance, Risk, and Compliance (GRC). Lawson offers a solution in this category called Compliance Control Manager. Most GRC products can be more broadly described as an internal control system.  An internal control system allows organizations to more effectively and efficiently manage GRC requirements – whether government-mandated or established by the organization.  It can centralize the information organizations need to manage CSR activities within any functional area (e.g. finance, HR, supply chain management manufacturing) and across the enterprise. This is the main reason why, in the CSR Solution Framework, the internal control system sits on top of the ERP applications. Internal control systems typically focus on four key areas: 

• Documentation. A central repository of all governance, risk management and compliance-related documents that is accessible to auditors and managers, and allows documents to be updated. 
•  Testing. Tracking testing activities, including what was tested, when, by whom, the results and any remedial actions when testing failed. 
• User interface. Communicating all key information to the appropriate audiences through a user portal. 
• Monitoring. Enabling organizations to manage key events/transactions within their ERP and other business applications and present any significant or material events to the appropriate audience.

While these products were designed to address regulations such as Sarbanes-Oxley and Basel II, organizations are now finding them effective in managing a variety of CSR programs, including:

In my last post, I promised to share some thoughts on how IT can help organizations manage their CSR programs. Over the past year, I’ve been leading a project at Lawson focused on how business software, more specifically ERP solutions, can help organizations manage their growing array of CSR programs. Rather than try to cover this topic all at once, I plan to spread it over a few posts. 

 Lawson  has developed a CSR Solution Framework  to help companies add additional structure and thus derive value from their CSR programs.  While some may call it too ERP-centric, based on our assessment of what problems organizations are trying to solve around CSR, it is an objective, comprehensive approach. This post will focus on the foundation layer: ERP applications. A 2007 global CSR study by AMR Research found organizations are getting limited value from their ERP systems in helping them manage their CSR programs; however, the same study indicated many of those same organizations are looking to their ERP vendor(s) for solutions for their CSR initiatives.   I think it is safe to say that today most organizations probably manage CSR activities through a collection of disconnected spreadsheets, applications and databases.  Because ERP systems are often integrated and enterprise-wide, they are a logical foundation for managing CSR programs.  ERP systems manage the transactions that flow through the enterprise and strive to establish “one version of the truth.” In addition to eliminating the disparate spreadsheets, databases and other information silos, using an existing ERP system to manage CSR programs also enables organizations to generate a clear picture of which programs are generating the greatest return on their investment. In addition, Lawson  conducted a mapping exercise between the Global Reporting Initiative Sustainability Reporting Guidelines, a commonly recognized and accepted reporting standard, and the data tracked in our ERP applications.  We found a very strong correlation.  For example, GRI’s social reporting category focuses on areas such as age, gender, minority group membership, wage rates, rates of injuries, etc. In the Lawson  system, all of this data is maintained in a central repository and can be cross-referenced by factors such as department, geographic location, level in the organization, salary, etc.  Next time I’ll discuss the internal control system. 

Best, Jeff

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

As I mentioned in my previous posting, I’m in Australia for The Green CIO conference, as well as a three-day Lawson user group meeting for customers in Australia and New Zealand. 

The Green CIO conference was a very interesting event.  It included about 200 companies, media outlets, and vendors. The conference had a heavy focus on the environmental impact of hardware (mainly servers) and data centers. That isn’t surprising given that IT represents 2 percent of all electricity consumption in the United States; half of that is from data centers.  

Two presenters mentioned that IT’s environmental footprint is equal to that of the commercial aviation industry.  Of course, IT doesn’t have the same public relations issues as the commercial aviation industry because our environmental impact is a lot less visible to people.  

Reducing the energy consumption of hardware was cited as the “low-hanging fruit” of reducing IT’s environmental impact. That’s probably true, and I would never discourage organizations addressing that issue, but I hope they are also looking more broadly at the role IT can play around CSR. I tried to communicate that message in my presentation. The feedback I received from the conference organizers and participants was very positive, but let me know what you think. 

As I mentioned earlier, I also attended the Lawson Australia-New Zealand user group event. At the event, I delivered a speech very similar to my Green CIO conference presentation.  The roughly 150 participants were a mix of about 50 percent IT leaders and 50 percent business-line leaders. The feedback from participants was two-fold:

1) CSR is moving up on their priority list and is starting to (or already has) get the attention of their senior leadership.

2) They appreciated the insight on how business software can be used as a tool to help manage CSR programs. 

I’m not looking for sympathy, after all I am in beautiful Australia, but during my week in Sydney and on the Gold Coast it’s done nothing but rain. 

G’day mate! 

Jeff

I’m at The Green CIO conference, presented by CIO Magazine Australia, in Sydney this week. This is an innovative conference that Lawson became involved with as soon as we heard about it. The conference places a sustainability focus on a broad range of information technology topics, including IT strategy, hardware, software, data centers, and change management. I’ll be speaking on the role that business software can play in helping companies manage their CSR programs.

I’m not surprised this type of conference is taking place in Australia. From what I can tell based on a survey of Lawson’s Australian customers and by reading business publications from the region, Australian businesses seem to be ahead of the curve when it comes to CSR. For example, telecommunications and IT provider, Telstra has issued an Annual CSR Report since 2003 that rivals those produced by an investor relations team. It details the company’s social activity in relation to its customers, employees, communities, and marketplace. It’s a bit long, but worth the read.

I’m excited about the opportunity to interact with a group IT professionals who are thinking about sustainability. I’m sure it will be a great learning experience. I’ll report back on the conference next week.

Jeff

What do Coca-Cola, Microsoft, IBM, General Electric and Nokia all have in common?  If you said they are all among the top five global brands, you are correct.  If you said they all publish sustainability reports using the Global Reporting Initiative’s (GRI) Sustainability Guidelines, you are also correct.

GreenBiz last week reported on a recent study by GRI that looked at the world’s top 100 brands, as ranked by Interbrand, and found 80 percent of the top 15 global brands publish sustainability reports using metrics developed by GRI. All of the top five brands mentioned above are included. This research adds to the rapidly growing list of reports I’ve seen connecting sustainability reporting and strong performance in the areas of brand, revenue, profitability and other key business measures.

This type of report will often elicit comments from observers such as, “Large, profitable companies can afford to undertake CSR initiatives and publish sustainability reports. That just isn’t practical for the rest of us.”  This implies that CSR became important only after the company became a global leader or as sustainability becomes more in vogue.  In almost all cases, that view is misguided.  

I know CSR has been a long-held core value for IBM. At Lawson’s Executive Forum (a conference for executives from our customer organizations) last March, we focused on the topic of CSR. We were fortunate to have IBM Vice President of Global Community Initiatives Paula Baker on hand to discuss the company’s CSR program. It’s a very impressive story. I would also point you to the March/April 2007 edition of CRO magazine, which had a cover story on IBM. Now, in the interest of full disclosure, I should note that IBM is one of Lawson’s strategic partners but the reason I’m highlighting IBM is its commitment to sustainability.

It’s also important to note that sustainability reports are just a means of communicating with stakeholders. It’s the actual sustainability practices that ultimately have an impact.  While reporting can certainly help companies create a “green halo,” stakeholders will quickly see through reports that are not based on solid sustainability activities.

Jeff

Welcome to Frankly CSR.  Clever name, don’t you think?  Well, I can say the name accurately reflects my purpose for writing a blog:  I want to create a forum to share candid, relevant information and ideas on Corporate Social Responsibility (CSR).  It’s a concept that has been around for decades. However, a heightened interest in the role of business in society has resulted in organizations in all industries and regions of the world reevaluating how they impact their stakeholders. Closer to home, it’s become an area of focus for my company, Lawson Software, and a personal passion of mine. What should you expect? Fairly frequent postings. I’ll share my ideas and questions, comment on news items and provide links to other CSR sites. I’m a software guy, so my natural leaning is toward how information technology can play a role. I’m sure that will come across in my postings.  I hope you’ll be a frequent reader, and I welcome your comments.   Jeff