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October 10, 2006
From Defense to Offense - The Next Phase for CSR
I attended the Global Reporting Initiative's annual conference in Amsterdam on Thursday. There was a huge turnout for the GRI event, with over 1,000 representatives of companies, governments and civil society.
I was the chair of a panel on corporate social responsibility reporting. The question posed to the group was, "Do CSR Reports Enhance Trust in Companies." Fellow panelists included Hannah Jones, CSR director for NIKE and Jo Confino, senior editor of the Guardian.
Here are conclusions from the discussion:
1) 52% of Fortune 500 companies now do a CSR report. Most of them utilize the report as a means of measuring progress on specific aspects of environmental policy or human rights. Reports are increasingly similar to financial statements, with fewer human interest stories and pretty pictures.
2) The best practice for developing such a report is to reach out to NGOs for their input and criticism, to have full representation of company operating units (geography, line of business including manufacturing, sales and marketing, finance, plus service lines such as HR) as a report review committee, then to engage top management in championing the report.
3) Once the report is completed, it becomes a framework for conversation with external stakeholders and the basis for a strategic evolution for the company. "This process is about triggering innovation in how we do business," said Hannah Jones of Nike. Jo Confino of the Guardian suggested that CSR reporting is "the amplifying moment for a deeper process of engagement."
4) Companies should acknowledge that they do not have all of the answers. For instance, Nike admits that it does not have a perfect system for labor safety in China. You should invite all parties to contribute to a solution to these issues.
5) The report should go beyond a check list and a quantitative measurement of "the absence of bad." The process can contribute to growth and profitability. The GRI goals should be not become false incentives for a corporation to meet the targets but to ignore necessary behavioral change.
We had a very robust debate about the rationale for corporate social responsibility. I argued that establishing and maintaining a stellar corporate reputation is the highest order of priority. Ms. Jones of Nike took the other view, that managing reputation is secondary to using CSR as a way to grow the company. "Managing reputation is playing defense and is different from how we can be a catalyst to substantial change. That is playing offense and it appeals more to senior management."
Ms. Jones, while I respect your opinion, implicit in your view is a conviction that corporate reputation is a PR game played by those who "spin" for a living. For you, reputation management is risk management, a damage control exercise. If you believe in a CSR process of Dialogue, Assurance and Partnership, then trust in a corporation is the essential asset that enables it to work effectively with its multiple stakeholders to find mutually advantageous solutions.
Ms. Jones and I are both right. Yes, reputation can still play the traditional role of leveraging its accumulated equity to face down criticism or attack at a particular crisis moment in time - product recall, management shake-up or employee safety issue.
As for CSR reporting, while it requires the involvement of operating businesses in order to collect meaningful data, leadership of the reporting process should be assigned to the person in charge of the PR/PA department, not because of their writing skills but rather because PR's competency is managing and growing meaningful relationships with key stakeholders - and effective CSR reports are mission-critical stakeholder relationship management tools.
As companies assemble dedicated groups of CSR specialists (as does NIKE), I hope they will look to bolster an organization's subject matter expertise in business operations and geographies, and not look to create functions that duplicate (and compete with) PR. The standard for the best PR practice already is transparency, honesty and pushing for change in policy. The best CSR - and PR - are both a reflection of a positive reality.
Posted by Edelman at October 10, 2006 10:51 AM
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Comments
I can’t agree more. PR is not a persuasive tool but a communication one. It’s not the same. Persuasion is about making people believe something. Communication is about building something new through dialogue with people. We should stop talking about TRUTH and start talking about consensus.
Posted by: Jordi Ballera at October 11, 2006 12:17 PM