Issues

CSR: regenerating communities or a dangerous racket?

There’s hardly an organisation that doesn’t have a Corporate Social Responsibility (CSR) section in its Annual Report or on its website. But does CSR revitalise communities or is it little more than enlightened philanthropy; and what does it do for donor organisations? PwC’s Paul Terrington explains what it means for them.

“Corporate Social Responsibility has become a racket – and a dangerous one,” claimed a Daily Telegraph headline from last September, heralding an investigation into some of the world’s biggest – or at least most respected – companies, claiming that their public commitment to communities, the environment and conservation, concealed a private focus on profit, avoiding regulation and occasionally, worse.

Within days of the Daily Telegraph article, Business in the Community (BITC) launched its 2016 Corporate Responsibility Index, intended to help UK companies measure, manage and integrate responsible business practices. According to BITC’s 2015 Corporate Responsibility (CR) Index, 99 per cent of leading UK companies have CR on their board agenda, 82 per cent take environmental and social consideration into account when making investment decisions, while just over half (52 per cent) claim a link between senior executive remuneration and their company’s CR performance.

Whatever the relative merits, CSR is a seriously big business. According to consultants EPG, UK and US Fortune-50 companies spend $15 billion annually on CSR; another estimate puts the spend at $19 billion. Whatever the right number is, it’s a big one and a raft of advisors, charities and third-sector organisations have grown up to focus corporate CSR on good causes.

So what’s the truth about CSR? Some years ago the economist Michael Porter, writing in the Harvard Business Review, claimed that corporate attitudes to CSR were disconnected from core business strategy and if corporations analysed the potential of CSR using the same benchmarks that directed their business strategy it could become a source of opportunity, innovation and competitive advantage. Ominously, Porter also warned that spending on CSR as a corporate image-booster, rather than as moral imperative, didn’t necessarily improve a company’s image, strengthen its brand, enliven staff morale or even raise the value of its stock – indeed the contrary could easily occur.

Porter’s urging that CSR should reflect a moral imperative by ‘doing the right thing’ has become, particularly influential in large organisations employing predominantly young people whose voices help set the ‘tone from the top’ and focus corporate resources on specific activities in local communities. That, in turn, has shifted resources away from donating cash, either directly or through sponsorship organisations, towards hands-on engagement between the business, its employees and those organisations and causes they passionately support.

Within PwC, our approach to CSR has evolved to largely reflect Porter’s notion of doing the right thing. As a business that generated more than £3 billion of revenues in 2015 in the UK, we have a responsibility to many stakeholders, particularly including the local communities in which we operate. Like Porter, our experience has been that a vision of doing the right thing is most effective when it is focused on giving something back through a voluntary sharing of talent with communities and causes that staff are passionate about. Clearly CSR needs some form of framework within which decisions can be made and resources channelled, and for PwC our community programmes focus on four key areas:

•   raising educational achievement and employability in the communities where we have a presence;

•   supporting social enterprises;

•   increasing awareness of environmental issues;

•   supporting our staff to fundraise for charities through the PwC Foundation.

Over the past year, across the UK, almost a third of our UK workforce volunteered during working hours and that impacted directly on around 18,000 people across every region of the UK. We wouldn’t be accountants if we didn’t wonder just how much value that actually delivered, so, over recent years, we’ve also measured the value of our investment in community work, using the London Benchmarking Group’s methodology. By that measure, the combined efforts of around 6,000 people delivered value to communities of around £6.9 million last year.

The growing interest in measuring the social value of business activity, and in social enterprise as a way of tackling some of the toughest social issues in the UK, means there is increasing crossover between our community work and our work for clients in the public and not-for-profit sectors. For an organisation comprised predominately of accountants and finance specialists, our community work engenders in our people a better understanding of value beyond financial accounting, as part of their overall awareness of sustainability. 

But for organisations like PwC, with offices across the UK, while the formal structure is important, it is equally important to design local flexibility into the process. Working with the communities around our offices needs to be part of the culture and an integral part of being a responsible business means giving staff a say in how they engage, support and deliver value to their own communities. That also lets local offices or facilities support initiatives that are genuinely local. 

Our experience is that staff are passionate about issues that touch their lives and those of their families and that passion translates into a commitment to sharing their talent. In the last few years, through the direct experience of staff we’ve “adopted” local groups as diverse as the Children’s Heartbeat Trust, The Cystic Fibrosis Trust, The Cormac Trust, Tiny Life and Northern Ireland Hospice.

That close encounter with the organisation at a personal level has led to creating close and occasionally remarkable relationships between our staff and the organisations. It not just about fundraising, it’s about sharing expertise, delivering business improvement and some of those relationships have continued long after the formal period of support and mentoring has passed. And does CSR really make a difference?

 

Just days ago, we got this note from Sarah Quinlan, Chief Executive of the Children’s Heartbeat Trust. “Our charity partnership with PwC has had a very real and positive impact on the development of our organisation. PwC supported us through their specialist skills and advice – developing the charity’s first ever strategic plan. For a small charity, this type of specialist, committed pro bono support was invaluable, helping us to confidently deliver the aims and work of the charity effectively.”

If properly structured, engaging to staff, focused on measurable outcome and with the flexibility to embrace local opportunities, CSR is a worthwhile medium for everyone concerned.

Paul Terrington

PwC NI Regional Leader

Tel: 028 9041 5717 

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