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Employment Today, HR Solutions - Thomson Reuters

Employment Today, HR Solutions - Thomson Reuters



Employment Today Magazine

Putting CSR into HR

CSR is an important tool for attracting talent, but many businesses do not involve their HR team enough in CSR strategy. Nikki Wright looks at why HR should be front and centre in CSR.

Corporate social responsibility (CSR) is becoming an everyday part of doing business for many companies across the world, including in New Zealand. The concept of CSR is simple: it’s about companies thinking of more than just the profits they return to shareholders, taking account of their environmental and social impacts. This means different things for each business. For example, some may focus on reducing waste or power/fuel consumption, while others may take part in charitable programmes aligned with their values and issues of interest.

Regardless of how they approach it, more and more New Zealand businesses are conducting and recording some sort of CSR programme. The 2017 Annual Review of the State of CSR in Australia and New Zealand drew a record 359 responses from New Zealand, a whopping 58 percent increase on last year’s survey. The ninth annual version of the report, published by the Australian Centre for Corporate Social Responsibility (ACCSR), found that almost half (48 percent) of New Zealand respondents support mandatory sustainability reporting for large companies.

THE TOP PERFORMERS

The review also names the CSR Top 3 in New Zealand: the companies with the strongest management capabilities for CSR, as rated by their employees. This assessment included their capabilities in stakeholder engagement, stakeholder values attunement, dialogue and social accountability.

The CSR Top 3 in New Zealand are: Air New Zealand, Toyota and Westpac. These companies represent a diverse mix of sectors (aviation, car-making and banking), showing that “industry is no excuse” when it comes to committing to CSR. Air New Zealand has also come out on top of the Colmar Brunton Corporate Reputation Index for the past three years, with Toyota regularly featuring in the top five on that list. This highlights that earning the confidence of your employees can translate to having a positive public reputation.

THE TOP PRIORITIES

The annual review also examined attitudes towards the UN Sustainable Development Goals, including which ones are seen as the most important. Two years ago, the United Nations adopted the 2030 Agenda for Sustainable Development, accompanied by 17 sustainable development goals with 169 associated targets. Companies are using them to inform business strategy as well as sustainability strategy and commitment is coming from the highest levels of the organisations.

The top five goals being addressed by companies are:

1.
Gender equality;
2.
Decent work and economic growth;
3.
Climate action;
4.
Good health and wellbeing;
5.
Responsible consumption and production.

Gender equality was the highest ranked goal, with 66 percent of respondents declaring their organisations are planning to address this issue. Gender equality remains a strong focus for businesses with the number and proportion of women in senior leadership positions across the private and public sector firmly in the public discourse. This result may also be a response to the growing body of research suggesting that more diverse boards and workforces lead to improved outcomes for businesses.

However, when organisations were asked to rank the most difficult goal, climate action came out on top. This result suggests that while companies place a lot of importance on the environment, there is not always a lot they perceive they can do at an individual level to make a meaningful difference. When it comes to social objectives, it can be easier to achieve tangible results. Gender equality is a perfect example: every company can play its part by striving towards gender equality within its own organisation.

HR: THE MISSING LINK

CSR is not just about saving the planet. Fundamentally it is about people, which means human resources departments should have a big role to play in its implementation. Unfortunately, too many HR teams are being sidelined. According to a Society for Human Resource Management (SHRM) Foundation Executive Briefing, research shows HR is neither accepted as a “true partner” in determining sustainability strategy, nor used as a key implementer of sustainability programmes.

“In a survey of more than 700 corporate social responsibility (CSR) and HR professionals in the United States, only six percent of respondents confirmed that HR was involved in developing CSR strategy and 25 percent maintained that HR was involved in implementing CSR strategy,” the report said.

“Yet, 89 percent of respondents said that CSR is important for attracting top talent, improving employee retention (85 percent) and developing the organization’s leaders (81 percent). This demonstrates a significant disconnect—and an opportunity for human resources. The HR function clearly has an important role to play in designing and implementing CSR strategy, but it has not yet achieved an influential position.”

There are a number of reasons why this could be the case. Perhaps it is because CSR is seen in many companies as being the responsibility of senior management, or in bigger companies, specialist CSR teams. It could be that HR is not always seen as having a strong strategic element. Whatever the reason, these companies may be hampering their CSR efforts. Here are some of the benefits of getting HR more involved in your CSR programme.

REDUCED RISK

CSR seems to be part of the DNA of some companies. Scratch beneath the surface, however, and this often turns out to be driven by a small group of determined people in the organisation. In some cases, it is all down to the efforts of one CSR titan, such as a socially conscious CEO. Not only is it unfair to rely on one person to do all that work, but it presents a grave risk for the company if he or she departs for a more CSR-friendly environment.

There are plenty of examples of businesses stumbling after losing an inspirational leader or key staff member. Utilising HR in your CSR strategy and implementation ensures your programme is instilled across the organisation, not just in a few people. It also allows your organisation’s CSR ethos to be implanted into new hires not only when they start, but before they start.

BETTER REPORTING

Modern HR has a strong focus on data and analytics, which makes it essential for measuring and reporting CSR and sustainability. The 2017 Annual Review of the State of CSR in Australia and New Zealand found a number of benefits to organisations from sustainability reporting, including improved stakeholder engagement (66 percent), improved employee engagement (57 percent) and engaging senior leadership in strategic conversations about the organisation (69 percent).

Because of its central position in engaging with employees, HR should lead internal measurement of CSR programmes and staff engagement on CSR issues. It should also be used to canvas employee views on what the CSR priorities should be.

ATTRACTING AND RETAINING TALENT

New Zealand workers place great importance on organisational ethics and values. The 2017 Colmar Brunton Corporate Reputation Index found that the vast majority of employees feel more loyalty towards an employer if the company has values they believe in (81 percent), makes ethical decisions (80 percent) and has a strong sense of purpose beyond financial success.

Although CSR has made businesses more aware of the importance of ethics in attracting and retaining staff, it is not a new phenomenon. A survey for the Conference Board of Canada back in 2000 found that seven out of 10 of employees want to work for companies that commit to social and community concerns. HR teams have their fingers on the pulse of what current and potential employees look for, which can be fed through into their organisation’s CSR strategies.

OTHER BENEFITS

According to Canadian HR consultant Brian Kreissl, there are several areas within the mandate of a typical HR department where HR practitioners can get involved. “For example, the HR function is normally responsible for drafting and implementing employee codes of conduct, which are typically included in an organization’s employee handbook,” he wrote in an article for Reuters. “This is an ideal home for documenting an organisation’s commitment to socially and environmentally responsible behaviours among its employees.”

Kreissl noted that codes of conduct typically include guidelines around safeguarding confidential information, accepting gifts, gratuities and kickbacks, proper financial controls and reporting mechanisms, protection of “whistleblowers,” conflicts of interest, anti-corruption and bribery and anti-nepotism policies.

“Another area where HR can make a difference is in the area of employer branding. Employees want to work for organisations that are seen to have a strong commitment to CSR. Therefore, once a company has developed a real and meaningful commitment to CSR, it’s important to tout that as part of its overall employer branding strategy.”

HOW TO INTEGRATE CSR INTO HR

Coro Strandberg, principal of Strandberg Consulting, describes the importance of HR to CSR with the following equation—CSR-HR=PR. In other words, CSR without a strong HR component is just a public relations exercise, rather than a true organisational commitment to social and environment responsibility. In his report The Role of Human Resource Management in Corporate Social Responsibility, Strandberg outlines ten steps to integrate CSR into HR management:

1:
Vision, mission, values and CSR strategy development;
2:
Employee codes of conduct;
3:
Workforce planning and recruitment;
4:
Orientation, training and competency development;
5:
Compensation and performance management;
6:
Change management and corporate culture;
7:
Employee involvement and participation;
8:
CSR policy and programme development;
9:
Employee communications;
10:
Measurement, reporting—and celebrating successes along the way!

The full report can be found at www.CoroStrandberg.com.

If your organisation has already taken these steps, well done and keep up the good work. If not, you need to start the process today. It is especially important if you work for a listed company, because there is a strong chance sustainability reporting could soon become compulsory for NZX-listed businesses.

Getting HR incorporated into your CSR will make compliance with reporting requirements that much easier. It will also help to improve your organisational reputation and help you retain your most valuable asset—your staff. HR people don’t need to be told how important that is.

NIKKI WRIGHT is managing director of Wright Communications, an Auckland-based PR consultancy with a strong focus on CSR.

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