Tag Archives: CSR

How Much Business Does £300m Of CSR Get You?

That might sound subversive – after all, CSR isn’t about the bottom line. Is it…?

There are many definitions of CSR. In general terms, it is about delivering benefits for economic, social and environmental stakeholders. On the ground, we’ve seen fantastic work going on – exemplified by organisations like Business in the Community. We genuinely believe that for a number of businesses, CSR isn’t an add on – it’s seen as a key ingredient of a sustainable business model.

As a CEO of a for profit, the bottom line is, well, the bottom line. How do we get more customers? How do we make the ones we have happy? How do we get the best out of the team? How do we ensure our product is usable and therefore shippable?

I understand any skepticism around CSR.

But it is there. And it’s not going away. Moreover, in many countries it’s now backed by legislation.

How could we improve the conventional model of CSR? Let’s come back to that. First a few more numbers.

We carried out some research a few months back. We looked at 30 of the biggest suppliers to UK government, including Capgemini, HP, Balfour Beatty, Babcock, Fujitsu and Barclays.

What we found…

  • They account for up to 15% of government expenditure
  • The total UK Community Investment spend of the 8 companies who share their figures is £9,533,461
  • The total Global Community Investment spend of the 12 companies who have share their figures is £328,249,901.

And, according to the Charities Aid Foundation, FTSE 100 companies donated an average of 1.9% pre-tax profits in 2014.

What we ask…

  • Is there a direct link between this CSR spend and sales? Short answer: no.
  • Should there be?
  • Why not? What if you could demonstrate a clear ROI on this spend?

We think this not because we think CSR is an afterthought or an add on. If it is a a core component of business strategy it has to be a core component of your financial strategy – because these two things are so intertwined. This is what we mean when we think we can square the circle of CSR.

Why not do well by doing good, if you could demonstrate that your CSR budgets and resources were going into local community projects that were delivering clear outputs, and were rewarded for that with sales?

Why not do well by doing good and demonstrate this in terms of clear ROI for your CSR spend?

That would be a good thing right? If you want CSR to be a core part of your business strategy it has to be a core part of your financial strategy.

Social Value is increasingly a differential in government tendering – how much you give can determine how much you win. At the Social Value Exchange we use market design to ensure CSR is paid for at a fair and efficient price – the sweet spot between making sure community projects benefit and suppliers don’t break their business models. Suppliers have used this approach to win more than £20m of government contracts.

With this option, why wouldn’t you use CSR to get more sales? 

Firesouls make digital products that drive innovation in, and get more resources to, the public and community sectors. Our latest product is the Social Value Exchange, an online marketplace that gets more funding and resources into local community projects.

Duty of Care Law: You Got The Green Light In France!

France’s new legislation, The Duty Of Care Law will prevent serious human rights risks and threats to fundamental freedoms. Will other countries follow suit? 

It would be wise for procurement professionals to pay close attention to France’s new sustainable procurement legislation.   The Duty of Care law, which affects organisations with over 5,000 employees, is likely to have some influence on other nations,  starting with those in the EU.

If similar human rights legislation is implemented across the globe; forewarned is forearmed, and sustainable, ethical procurement is a hot topic that’s only getting hotter!

Whilst the progress of global sustainability standards have traditionally been  pushed by individual businesses and activist groups, things are changing. This month saw the publication of ISO20400,  (International Standard for Sustainable Procurement), which creates a standard for every organisation in the world to follow.

The Duty of Care Law

In its much-awaited decision last month, the French constitutional council has given a  green light to the “Duty of Care” law (Devoir de Vigilance) although they stated that there remain some provisions to the French constitution.

The major points of the law, requiring French companies with at least 5 000 employees, including in their French direct or indirect subsidiaries (or 10 000 employees in their direct or indirect subsidiaries worldwide) to develop a diligence plan (“plan de vigilance”), are recognised of general interest. The intent is for the diligence plans to prevent serious risks related to human rights and fundamental freedoms, health and safety of persons and the environment. The constitutional council considers however that the sanctions initially included in the law violate the constitutional principle that penalties must have a sound legal basis. As a result, the civil fine of up to €10 million, as well as its increase to €30 million in case of damages that could have been prevented by implementing the diligence plan, are removed from the law.

Developing A Diligence Plan

The obligation of implementing a diligence plan however, as well as the formal notice and the civil liability mechanisms in case of lack or deficiency of the diligence plan, are constitutional. Consequently, companies are still compelled to implement a diligence plan, even if the law loses some of its deterrent effect, which makes for the first law of this type: it introduces an obligation much more stringent than a mere reporting obligation, such as the ones required by the UK Modern Slavery Act or the California Transparency Act. Companies are required to implement specific concrete actions and cannot limit themselves to reporting on what they do (or do not do).

There are also some talks of developing similar regulations at European Union level.  Eight national parliaments have called for a corporate duty of care towards the human rights and local environment impacted by the company’s operations. They have jointly proposed that the European Commission take action on this matter. This shows that the French “Duty of care” law is indeed the first step of a generalized global movement requiring companies to address their Corporate Social Responsibility (CSR) risks, including throughout their supply chain.

This article was first published on the EcoVadis Blog