Exercise (CSR)

You have to give a talk to a senior management group in your

companies on whether, in the current climate CSR really
matters. And if it does, what role should HR play?

Please work in your group, and in 20 minutes discuss the 2

questions and report back. (The CIPD factsheet below may
help your discussion). Many thanks.
 Corporate social responsibility
Revised September 2009 (reproduced from the CIPD website)

In this factsheet

 What is CSR and why does it matter?

 What is HR's role in CSR?

 What to consider when starting a CSR strategy

 CSR in difficult economic times

 CIPD viewpoint

 Useful contacts

 Further reading

What is CSR and why does it matter?

CSR covers all aspects of corporate governance. It is about how companies conduct their business in
an ethical way, taking account of their impact economically, socially, environmentally and in terms of
human rights. This moves beyond traditional business stakeholders such as shareholders or local
suppliers. CSR includes social partners such as local communities, and global responsibilities such as
protecting the environment and ensuring good labour standards in overseas suppliers. CSR also
includes relationships with employees and customers. It inevitably involves working in partnership with
other organisations or groups. It can be seen as a form of strategic management, encouraging the
organisation to scan the horizon and think laterally about how its relationships will contribute long-term
to its bottom line in a constantly changing world.

CSR has grown in importance in recent years, often through public scandals and mis-management.
This has meant increased demands from customers, employees, statutory bodies and the general
public for detailed information about whether companies are meeting acceptable standards.
Increasingly companies have to take account of how their actions impact on society. The ‘employer
brand’ has become an important way to add value but it is also more vulnerable to scrutiny and
suspicion. Bad publicity travels fast through communication channels which are often out of
organisational control such as the Internet.

CSR is an issue in which we all have a stake. Our actions today will influence the lives of future
generations through for example, trying to protect the environment. It is changing the way business is
done.

Being proactive about CSR will increasingly provide a competitive advantage both externally through
protecting company reputation and the accompanying publicity, and internally through employee
engagement. To really ‘do’ CSR businesses need to accept that they don’t exist in a vacuum but
operate in a wider community that has an impact on their, and others, futures.

When CSR is done well, it means a precious, though precarious, trust in your business. Successful
CSR can bring benefits such as a distinct position in your marketplace, protecting your employer
brand, and building credibility and trust with current and potential customers and employees. It can
help significantly with recruitment, engagement and retention of employees.

For more information on employer branding, see our factsheet.

 Go to our employer brand factsheet

What is HR's role in CSR?

Companies increasingly need to co-ordinate their CSR activities and demonstrate their commitment to
CSR. Effective CSR depends on being seen as important throughout an organisation. Delivery, not
rhetoric, is the key to stakeholders developing trust in an organisation.

HR has a key role in making CSR work. CSR without HR runs the risk of being dismissed as PR or
shallow ‘window-dressing’. And CSR is an opportunity for HR to demonstrate a strategic focus and act
as a business partner.

CSR needs to be embedded in an organisation’s culture to make a change to actions and attitudes,
and the support of the top team is critical to success. HR already works at communicating and
implementing ideas, policies, cultural and behavioural change across organisations. Its role in
influencing attitudes and links with line managers and the top team mean it is ideally placed to do the
same with CSR.

HR is also responsible for the key systems and processes underpinning effective delivery. Through
HR, CSR can be given credibility and aligned with how businesses run. CSR could be integrated into
processes such as the employer brand, recruitment, appraisal, retention, motivation, reward, internal
communications, diversity, coaching and training.

The way a company treats its employees contributes directly to it being seen as willing to accept its
wider responsibilities. Building credibility and trusting their employer are being increasingly seen as
important by employees when they choose who they want to work for. People, especially Generation
X and younger, don’t want to work where there is a clash with their personal values. Present and
future employees are placing increasing value on the credibility of an organisation’s brand. Employers
are using the positive aspects of their brand in recruiting, motivating and retaining highly-skilled
people.
See our guide Corporate social responsibility and HR’s role for more comprehensive information.

 Go to our guide on CSR and HR's role

The trust built through successful CSR is hard to regain if lost. HR needs to ensure that their
organisation’s CSR can stand up to the inevitable scrutiny by stakeholders, and that training and
communication mean it’s embedded throughout the culture of an organisation.

HR needs to be an active business partner working with other functions, for example finance,
PR/marketing etc. It will need to look beyond the boundaries of usual practice and arguably work on
its own PR. CSR is a strategic opportunity which is market-led and is restrained by bureaucracy. It
needs dynamism, creativity, imagination and even opportunism.

What to consider when starting a CSR strategy

 Clarify your core values and principles.

 Make sure you know who your key internal and external stakeholders are and which issues
affect your relationship with them.

 Get the top team on board, and know how to sell the benefits of CSR to different
stakeholders.

 Understand how the CSR strategy is aligned to your business strategy and HR practices.

 Get endorsement for the CSR strategy from inside and outside your organisation.

 Communicate consistently.

 Training is vital, as CSR will only have an impact if employees are engaged: attitudes or
behaviour won’t change otherwise.

 Effectively measure and evaluate CSR, otherwise the time, effort and money invested are
based on assumptions, not results.

Direct results (such as saving fuel resulting in lower carbon emissions) and indirect results (increased
employee satisfaction) of CSR strategies can be shown to contribute to business performance. One
way outcomes can be measured is through a balanced scorecard approach, which allows for the
different types of factors that contribute to a business’s bottom line including internal people,
processes and customers. CIPD’s case study work Making CSR happen: the contribution of people
management shows that companies recognise there is considerable scope for clearer measurement.

 See more on Making CSR happen

CSR in difficult economic times

Employers did not behave towards employees in the recent recession in the same way they did in the
1990s. Then, employers were happy to make large numbers of people redundant in the belief that this
would appeal to shareholders looking for evidence of tough cost-cutting. More recently, employers
have been actively looking for alternative responses to reduced business volumes, declaring
compulsory redundancies only as a last resort. Recruitment freezes, short-time and flexible working,
sabbaticals and secondments have all featured as alternatives to redundancy in a range of sectors,
including vehicles, telecommunications and consultancy. Clearly one factor is that employers
increasingly understand the high cost of making people redundant, including damage to the morale of
those who remain. But there is also a concern about damage to employers’ reputation if they seem
not to care about what happens to their people, or do not treat them with respect. The ethical values
underpinning both HR and CSR certainly appeared to have more influence in the recent recession
than in the past.
Employers did not behave towards employees in the recent recession in the same way they did in the
1990s. Then, employers were happy to make large numbers of people redundant in the belief that this
would appeal to shareholders looking for evidence of tough cost-cutting. More recently, employers
have been actively looking for alternative responses to reduced business volumes, declaring
compulsory redundancies only as a last resort. Recruitment freezes, short-time and flexible working,
sabbaticals and secondments have all featured as alternatives to redundancy in a range of sectors,
including vehicles, telecommunications and consultancy. Clearly one factor is that employers
increasingly understand the high cost of making people redundant, including damage to the morale of
those who remain. But there is also a concern about damage to employers’ reputation if they seem
not to care about what happens to their people, or do not treat them with respect. The ethical values
underpinning both HR and CSR certainly appeared to have more influence in the recent recession
than in the past.

CIPD viewpoint

CSR will continue moving up the business agenda. Successful CSR strategies depend on building
relationships with a range of stakeholders and getting buy-in across the organisation. Enlightened
people management practices are key in delivering this and CSR offers HR professionals many
opportunities to make a strategic contribution to their business. This may mean reviewing existing
policies and practices on, for example, internal communications, recruitment, induction, health and
safety, diversity or training. One of the main conclusions from the CIPD case studies was that CSR
became an instrument of change in an organisation’s behaviours, attitudes and performance and this
was where the HR function made its greatest contribution to the success of CSR initiatives.

Useful contacts

 The CR Academy

Further reading

Books and reports

HAWKINS, D.E. (2006) Corporate social responsibility: balancing tomorrow's sustainability and
today's profitability. Basingstoke: Palgrave Macmillan.

Journal articles

BASHFORD, S. (2008) Brownie points for green workers. Human Resources. May. pp30-32.

BHATTACHARYA, C.B., SEN, S. and KORSCHUN, D. (2008) Using corporate social responsibility to
win the war for talent. Sloan Management Review. Vol 49, No 2, Winter. pp37-44.

EGAN, J. (2006) Doing the decent thing: CSR and ethics in employment. IRS Employment Review.
No 858, 3 November. pp9-16.

EMMOTT, M. and WORMAN, D. (2008) The steady rise of CSR and diversity in the workplace.
Strategic HR Review. Vol 7, No 5, pp28-33.

WEBER, M. (2008) The business case for corporate social responsibility: a company-level
measurement approach for CSR. European Management Journal. Vol 26, No 4, August. pp247-261.

This factsheet was written and updated by CIPD staff.