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Taking a strategic approach to corporate responsibility

How to maximize the value of your corporate responsibility efforts


An external corporate responsibility report is often mistakenly the main focus of a company's corporate responsibility activities . In fact, the most important corporate responsibility activity is looking at the bigger "strategic" picture. Devising a robust and broad-ranging strategy that integrates the principles of corporate responsibility into overall business operations should be the core activity every company undertakes. Here are some best practices to help organizations approach corporate responsibility strategically.

Gone are the days when complying with environmental regulations was the bar that companies strived to reach.Today, there is a clear expectation by stakeholders that companies take a proactive approach to corporate governance. It's an expectation that extends well beyond environmental management to taking action on a much wider range of issues: labour conditions, climate change, sustainable use of resources and supply chain risks.

"Companies today must look equally at their financial risks as well as the environmental and social impacts of their decisions," says Johanne Gélinas, a partner with Deloitte's  Corporate Responsibility & Sustainability practice in Canada. "It starts by adopting an integrated and strategic approach. To do this effectively, companies need to establish the connection between the actions they take as part of making daily business decisions and the stakeholder value they can deliver, or erode."

"Executives will always be challenged about where to spend time and resources. By adopting a strategic approach to corporate responsibility, they can start to identify environmental, social and governance initiatives that can also improve shareholder value."
— Johanne Gélinas

Best practices for implementing a corporate responsibility strategy
As companies begin to approach corporate responsibility strategically, there are key best practices to keep in mind:

  • Get executive support: To successfully embed corporate responsibility into your company, it should be driven from the top down. Company leaders should be vocal about the intentions and treat them with the same level of importance as other business imperatives.
  • Embed it into the business: If you treat corporate responsibility as an initiative, you will face difficulty realizing its full value. Instead, find ways to integrate corporate responsibility into every area of the business — from performance measurement and decision-making to the way you measure revenue growth, operating margins and asset efficiency.
  • Be open and honest: Companies can more quickly integrate and evolve corporate responsibility through transparency and communication about strengths and weaknesses. Although corporate responsibility is about more than developing a report, the report is a good tool for establishing transparency and communication with stakeholders.
  • Develop supporting processes: Effective corporate responsibility integration requires adjustments to an organization's processes, relationships and incentives. New processes should help management identify and embed environmental and social initiatives that align with the company's strategic priorities.
  • Give it time: Approached strategically, corporate responsibility cannot be implemented overnight. It requires new processes, new attitudes and possibly a new corporate culture. As such, it is important to take small steps in building an effective long-term business imperative, rather than adopting an aggressive agenda focused on disparate initiatives.
  • Follow through: If you plan to publicly commit to corporate responsibility, be sure you are prepared to walk the talk. Unless you ingrain the program into your business, you risk losing credibility — and market value.
  • Stay balanced: Remember that corporate responsibility is about more than pushing a social agenda or engaging in philanthropic initiatives. That's why the best initiatives to pursue are those that create both social value and bottom-line benefits.

"Executives will always be challenged about where to spend time and resources," says Gélinas. "By adopting a strategic approach to corporate responsibility, they can start to identify environmental, social and governance initiatives that can also improve shareholder value."

 

A framework for creating sustainable business value

To help companies identify actions that create more than pure economic value, Deloitte relies on a unique framework based on internationally recognized sustainable business principles. This tool helps companies determine the impact of their corporate responsibility initiatives on stakeholder value by examining four key drivers:

  • Business inputs are activities that help companies generate value by improving buying practice management and influencing the environmental and social performance of suppliers.

  • Business operations are activities focused on improving workforce practices and resource utilization.

  • Business outputs are activities that enhance corporate responsibilities toward customers by examining product and service life cycles.

  • Business management activities are those that improve corporate governance, management systems and reporting.

Deloitte Image  Read more about corporate responsibility