Organizations of all sizes are rapidly discovering that Corporate Social Responsibility (CSR) and sustainable business practices can foster improved green programs and overall environmental stewardship.
Today, we are seeing increased awareness and active participation by business professionals in the development of CSR policies. Organizations are increasingly more involved in green initiatives by adopting sustainable processes and practices, adapting products and services to the low-carbon economy and innovating in all areas their business. The net positive on reducing waste, designing green buildings, implementing green operations and maintenance plans — all have continually proven to yield a positive return on investment (ROI).
CSR has come to rely on a more complex set of factors than corporate governance alone, and likewise also depends on sustainable development, environmental impact and supply chain management.
The development of the new carbon trading markets,verified emission reductions (VERs), also known as carbon offsets, and renewable energy credits (REC’s), it has become easier for organizations to create and measure direct ROI from CSR. Likewise, CSR efforts have shown to yield measurable returns in waste reduction, improved efficiency, diminished liabilities, improved community relations, and brand recognition.
Through communicating clear and measurable sustainability objectives and the implementation of practical and equally functional corporate governance mechanisms, organizations are realizing that they can have a achieve ROI through their sustainability efforts.
Integral strategies in ensuring substantive long-term results include:
- Define path of progress in CSR and strategically manage expected organizational outcomes
- Ensure basic CSR values are culturally integrated across the organization
- Adopt an effective engagement strategy with stakeholders to create buyer awareness and loyalty
- Properly map organizational objectives and critical success indicators with CSR performance metrics
Innovative organizations that understand the value of CSR work to create a corporate culture in which each employee is committed to doing his or her part to improve the environment. According to Forrester Research , effective CSR and sustainability practices within large companies have been shown to contribute to a profit increase up to 35 percent.
What’s Your ROI?
There are proven methodologies that demonstrate ROI benefits to CSR. A partial summary of such strategies has been outlined below and reflect best practices in the implementation of successful CSR programs designed to drive improved operational performance and net positive ROI.
Business Benefit: Improving Operational Efficiency
Perhaps the strongest — and best documented — argument for engaging employees in environmental practices is the connection between CSR involvement and increased operational efficiency. Front-line employees are often in the best position to identify inefficiencies and propose improvements. Educating employees on CSR can improve profitability by supporting greater efficiency through less waste, water and energy usage.
Business Benefit: Innovation
Employee E&S education is also a source of innovation and savings resulting from the development of new product and service lines as well as new technologies, materials or processes that reduce water, energy usage or harmful materials.
Business Benefit: Supply Chain Management
Educating employees on sustainability practices throughout the supply chain can lead to greater efficiencies and help build collaboration to meet sustainability, quality and other goals. It can also strengthen relationships between a company and its suppliers by aligning values and objectives.
Business Benefit: Financial Responsibility
We are seeing an unprecedented level of government programs and initiatives designed to drive corporate decision-making within markets that include manufacturing, construction, etc., to invest in implementing practical and measurable green building design, construction, operations, and maintenance solutions.
In many cases, the good news is that implementation of sustainable operations can drive increased efficiency through reductions in energy consumption, implementation of building maintenance methodologies that are often cost neutral, and decreasing the cost of workspaces through use of recycled furniture while changing too low–use lighting (which provides eco-friendly work environments), to name a few.
Government subsidies and incentives often further complement and reward efforts to develop and implement successful sustainable operations and maintenance programs. Nearly all of the points needed for LEED Certification (40 points) can be achieved through the energy and atmosphere category (35 points). It is by far the largest category within the rating system, and emphasizes the combination of energy performance and renewable energy, which has shown can lower costs by up to 50percent in the first year alone.
It is widely accepted that green building occupants are healthier and much more productive in their work. With an average of 90 percent of Americans spending more of their time indoors, green buildings often have better indoor air quality and lighting, among other key advantages
Measuring the impact of CSR in achieving social and environmental goals can bedifficult, but is becoming more common if not expected within corporations, often as a factor of CSR. Typically in business, what gets measured gets managed, and as long as the right metrics system is created and data is tracked accurately, almost any environmental CSR initiative can yield positive results.
There seems to be a direct correlation between the implementation of effective green programs and design of green buildings to improved office worker productivity and employee morale, while driving efficiencies and reduced consumption.
Innovative, forward-thinking companies have learned that they must be fully committed to strategic initiatives that are directly tied to their business’ core competencies (or those of clients, employees, etc.). The advantages of doing so through an effective CSR program, such as building brand recognition, realizing increased sales and fostering trust with employees and community, can be achieved as a win-win in almost all situations. With committed leadership and a strategic approach most companies can find a substantial ROI benefit in CSR.