Most companies try hard to be seen as socially responsible, but there’s more involved than writing CSR reports
Paul Klein, founder of Impakt, a consulting firm that works with companies on areas of social responsibility, is photographed in his office in Toronto, Ont. Feb. 7, 2013.
The Globe and MailHow to become a ‘social purpose leader’
Published Sunday, Feb. 10, 2013 07:00PM EST
Last updated Tuesday, Feb. 12, 2013 08:41AM EST
When Paul Klein started approaching companies in 2001 to use the services of Impakt, his Toronto-based consulting firm focused on social responsibility, it was hard to open doors.
“Nobody would listen to you. [Social responsibility] was seen as a below-marginal activity, something flaky, but now it has become an important business driver,” he said in an interview.
The problem now, Mr. Klein said, is that we are seeing “management by check box,” with organizations making sure they tick off all the prerequisites of a program, such as having a vice-president of social responsibility and a sustainability report, but without much sparkle.
“There’s a lot of action but not a lot of results because they haven’t figured out why they are doing it,” he said.
He has even edged away from the term corporate social responsibility (CSR), and urges his clients to become “social purpose leaders” – an organization that understands how it does business will have meaningful social impact and results. Companies need to understand the direct social and environmental impact of their products and services and how it connects to social issues.
IBM, Mr. Klein notes, has defined its social purpose as using its capacity to gather and integrate huge amount of data with its smart people, and is using that to help in areas such as urban transportation or epidemiology. Starbucks has started roasting coffee in the United States again, to build jobs at home. In Canada, natural resources companies are working with aboriginal people, realizing they have an important societal role to play in fostering economic development in aboriginal communities and aboriginal entrepreneurs.
Mr. Klein recently put together some provocative thoughts for social leaders in a Forbes.com article, including these:
Set up an advisory council
Gather people from your community and not-for-profit groups who can meet quarterly to give you unfiltered feedback on your social responsibility activities. “Too often corporations surround themselves with people like themselves and they all drink the same Kool Aid. You need people who will challenge you,” he said in the interview.
In the article, he cited Barrick Gold’s CSR advisory board, which acts as an external sounding board on a range of issues, from sustainable development to climate change to human rights.
Drop the CSR reports
Many companies are proud of their sustainability and CSR annual reports, but Mr. Klein said there is no point to printing them, at great cost and with little readership, in addition to annual reports. Integrate the material into your regular annual report, where it belongs. PepsiCo did this in 2011.
Have outsiders contribute to annual report
If putting the CSR report into your main annual report isn’t controversial enough, Mr. Klein urges you to give space in the annual report to those outsiders you are aiming to help with your social efforts. There’s no better way to have an assessment of what you are doing than to have it authored by the people you are trying to help. “It’s scary,” he acknowledged in the interview. “But why not start? Pick one community and approach them.”
Link with controversial NGOs
Companies may see the need to partner with non-governmental organizations involved in social issues, but they usually pick the safe, moderate groups. Mr. Klein urges you to take some risks. “Sometimes it’s appropriate to have an alignment with somebody who will scare you. Imagine a mining company having a partnership with Mining Watch,” he said in the interview, referring to the tough Canadian watchdog.
He also urges companies to consider exchanges in which some of its staff might work for a stint in the NGO – and vice versa – to understand each other better and gain from each others’ talents. Or hire outside your sector from such NGO partners. That would bring in house someone with expertise in social change.
Create a stakeholders blog
Set aside space on your website, or on a partner’s website, for people to write about your organization. They do it anyway, so why not accept and support such discussion? “You’ll learn a lot,” Mr. Klein said in the interview. “You don’t learn from people endlessly congratulating you.”
Don’t hide bad news
If you find yourself in a ticklish situation – he points, as an example, to companies that find child labour in their supply chain – don’t try to cover up or hope it won’t become public. Go to the news media, explain all sides of the situation, and let it come out without your company being forced into a defensive posture. “You get ahead of the issue,” he explained. “It creates a higher level of credibility in how people view you.”
“Most corporate and civil-society leaders believe that it’s too risky to take a strong stand on a social issue for fear of negative backlash from their stakeholders and/or the media,” Mr. Klein noted in the article. “ In 2013, declare your commitment to an issue and commit to do something remarkable. Your people and your customers will pay more attention and be more loyal.”
Special to The Globe and Mail
Harvey Schachter is a Battersea, Ont.-based writer specializing in management issues. He writes Monday Morning Manager and management book reviews for the print edition of Report on Business and an online work-life column Balance. E-mail Harvey Schachter