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Corporate social responsibility

Lehman Brothers: Why Real Business Leaders Do CSR

The blogs are buzzing and the papers burning: not since Diana has some many column inches been created by so many journalists and commentators. In fact (whisper it quietly) it may even surpass Diana’s death.

Of course, I’m talking about Lehman Brothers collapsing into bankruptcy, Merrill Lynch (where I once gave seminars on Desktop Publishing!) being sold to Bank of America and … who knows what about to happen to AIG.

Bad days, everyone one agrees. There’s no more ostrich-head sticking in the sand, no more “Nah .. it’s just a bad squall, it’ll pass.” No, this time it’s serious.

“A seismic event” which is “testing where the failure point lies”, according to commentators on Radio Four’s flagship “Today” programme. Note that word: FAILURE. Not often spoken even by financial pessimists. [Read more…] about Lehman Brothers: Why Real Business Leaders Do CSR

WBCSD Measuring Impact Methodology — A Brief Overview

WBCSD Measuring Impact Framework Frontsheet

In order for a form of measurement to be truly accurate it has to be implemented by a group, not a set of individuals. For instance, it’s much easier for a group of five people to measure a thousand paces (the old mile) than five people counting a thousand paces individually.

This is why the World Business Council for Sustainable Development (WBCSD), in conjunction with the International Finance Corporation (IFC), has recently launched the Measuring Impact Methodology (MIM).

The flaw it seeks to address is one of the oldest in the book: how can different companies produce comparable figures open to close analysis if they all use different methodologies to do the measuring.

The area the framework aims to bring this rigour to is their impact among the most nebulous stakeholders: the communities within which they operate.

Stating the Outcome, Not Guessing the Result
Attempts have been made before to introduce mechanisms into business to measure their impact upon the wider community. The most widely known is the Environmental Impact Assessment (EIA).

These have been around in one form or another for over 20 years. Their place has always been as part of the project planning process in an attempt to gauge the likely impact a project will have on the wider environment.

WBCSD’s Measuring Impact Methodology is different. It aims to measure the impact a business has had upon the wider community after the event.

In this sense it is a crucial part of the sustainability measurement and compliance jigsaw which is being built up. To date there has been no framework governing how companies do this, leaving the whole area open to interpretation and the spin of greenwashing.

Now, however, companies have a framework to work within when assessing and reporting the impact they have had upon the wider community.

Although only voluntary, companies who choose to operate outside this framework will always draw the cynical journalist who will look for the additional spin a company may be trying to introduce.

WBCSD Measuring Impacts
Four Stage Methodology

The 4×4 Solution
The framework itself is remarkably simple and rests upon four steps which a company should go through:

  • Set Boundaries; define the project in terms of the business activities to be considered and the geographic area in which they are occurring
  • Measure the Direct and Indirect Impacts; identify those impacts under the company’s direct control and those which are not but which are influenced by the company’s activities
  • Assess Contribution To Development; engage with stakeholders in the community in order to gauge how the company is supporting their development priorities
  • Prioritise Management Response; plan a response to the impact the company has had, based upon the risks and opportunities identified in previous steps

The framework also defines four classes of business activities which companies should report against:

  • Governance and Sustainability; the impact the company’s policies and procedures have on the wider community, including anything specifically targeted at environmental management
  • Assets; the impact anything “owned” by the company has, including premises and infrastructure and how products and services are created and delivered
  • People; the roles people fulfil within the company, their skills and training
  • Financial Flows; the financial impact a company has within it community, typically through procurement and taxation
WBCSD Measuring Impacts
Example Spreadsheet

Nice And Easy Does It
The framework includes a detailed explanation of the various activities a company needs to go through in order to complete each step.

However unlike many others the methodology includes a macro-driven Excel spreadsheet. This gives the methodology two advantages in usability over many others.

Firstly it provides a readymade electronic reporting application so the company doesn’t need to produce its own, spend extra money buying one from a consultancy or print out an onerous amount of paper detailing all the check boxes and comment fields..

Secondly it allows personnel to learn about the framework in a very hands-on manner, reading about the steps and going through them in a hypothetical example at the same time.

Indirect Impacts
Overall this is a very welcome addition to the growing armoury of methodologies being published to help companies understand and improve the sustainability of their business processes.

It also breaks new ground in that it measures the impact of company activities after the event, rather than trying to project them and then measure how a company has performed against that target.

In addition, the inclusion of a multi-functional spreadsheet in the methodology is also welcome and one has to wonder whether other organisations will start to provide similar tools as part of their methodologies.

After all, business lives by the rationale that competition between different organisations in products and services is healthy for society. There’s no reason providers of schemes and standards should be any different!

Yum! That’s Good!

What is the best way to market your media message and create warm and fuzzy feelings in customers?

By giving.

Brand Awareness

Creating brand awareness and loyalty in customers start by sharing something that makes a difference in people. Giant corporate moguls often do this by creating grants, special opportunities or giving a portion of their products or services to consumers as give-a-ways. Many times, these perceived “marketing strategies” backfire, causing feelings other than warm and fuzzy and can set a tone for a bad name instead of a good one with customers. However, if their actions are successful, customers usually remember them for a long time, citing their generous acts as reasons to reward them with repeat business.

The largest restaurant chain systems, Louisville, KY based company Yum! Brands Inc. does create those warm and fuzzies by giving away what their trademark brand is…food. They have done this by partnering with the United Nations World Food Program and other hunger relief agencies to reach out and make a difference. Their efforts have touched the lives of over 1.6 million people globally, concentrating on areas where there is a significant impact on world hunger.

The Right Way

What’s remarkable about what Yum is doing is the way they have chosen to make a difference and the impact that it has world-wide. Instead of a corporation this size simply profiting and enjoying its profits, they have taken an interest in local and international global affairs and decided to make a difference. As a parlay into success in media relations, instilling brand awareness and maximizing their message, Yum! has done a wonderful job of and is an example to the value of this type of public relations. As the parent company to their fast-food restaurants like Pizza Hut, Taco Bell and others, they are a leading example of what and how community interaction on a significantly broader level can help any company achieve that coveted word-of-mouth advertising and the aforementioned “warm-and-fuzzies.”

When is Sharing Not a Good Idea?

Consumers have a special knack for seeing right through messages that are only interested in their dollars. They know when they’re being “sold” to and when the only thing the company is after is their business solely for the sake of having their business. To that end, corporations would be wise to be careful when they share goodwill or attempt to broaden the scope of their audience by using certain tactics. They should be sure that their motives are pure, although there is nothing wrong with marketing to gain new consumers. The key to this type of marketing strategy to be successful is to know what the boundaries are and avoiding them at all costs.

After the company has achieved their objective in consumer relations, they can then enjoy the aftermath of increased sales, increased exposure, a successful marketing message and all of he good word-of-mouth advertising it can stand.

Now, I’d say Yum!, that’s pretty darn good!

Green Without Sustainability

South Sea Company
Share Price Bubble

Once upon a time, on the edges of Fangorn Forest, Gimli son of Glóin grasped the haft of his axe and eyed up the tree next to him.

He was in full flow about this “horrid, dark, dank, tree-infested” forest when a threatening rumble from the forest itself brought him up short.

Suddenly the dwarf realised the trees around him were in fact “charming, quite charming”, and in all likelihood avoided the environmental disaster of a-branch-dropped-on-the-head as well.

So the tension between dwarf and tree was interpreted by Peter Jackson in his film adaptation of JRR Tolkien’s “The Two Towers”.

It appears a similar rumble is starting to be heard amongst investors and those who serve them, the index companies. The most recent response comes from FTSE, who have just launched a new “Green Index”.
[Read more…] about Green Without Sustainability

Whistling For Attention

Somewhere around the time British Rail was privatised there was a wonderful quote from one of the presiding ministers: “Only 90% of passenger trains reach an eventual destination”.

Ever since then I’ve been deeply concerned about the remaining 10%. Are they lost out there somewhere, haunted by howling commuters, doomed forever to search for the Shangri-La of an “eventual destination”?

As well as showing how important it is for our leaders to think before speaking, this tale also demonstrates the inherent danger in relying upon statistics to prove a point.

So here’s another equally dubious one: less than 2% of UK companies encourage employees to raise their concerns if they believe their employer is breaking the law.

The rest, by definition, are either happy for such employees to approach the media, or are certain their employees will simply stay schtum.
[Read more…] about Whistling For Attention

A Blanket of Certificates

“We never fail when we try to do our duty; we always fail when we neglect to do it.” This is one of the most famous quotes from Robert Baden-Powell, founder of the Boy Scouts movement.


Lord Robert Baden Powell

How, though, do you measure how well a boy scout is performing or preparing to do his duty?

To answer this Baden-Powell came up with the merit badge scheme. This encourages scouts to reach a certain level of proficiency in a wide range of activities and a few are graded to show increasing levels of ability.

Scouts are encouraged to display each badge once it is awarded. Many sew them onto the arm of their uniform so that others can easily see their proficiencies.

Some, for reasons unknown, sew them onto their blankets.

Badge Collection
It is precisely this spirit of badge collecting and fulfilment of duty which governments are relying upon to help encourage businesses down the path of sustainability.
[Read more…] about A Blanket of Certificates