Communicating Corporate Social Responsibility to Internal Stakeholders
Internal communications are vital to the success of corporate social responsibility programs, argues CSR specialist Ryan Lynch.
Many major retailers and manufacturers have established corporate social responsibility programs that require suppliers to adhere to a corporate code of conduct, a regular schedule of monitoring visits, and a process of communicating remediation in order to verify and improve supplier compliance.
A number of forward-thinking programs have come to the realization that supplier monitoring alone is not the best approach, but that a program that incorporates supplier engagement and education will improve retention and adherence of corporate requirements.
Surprisingly, many of these same programs that place such value on educating external stakeholders often neglect key audiences within their own company.
Poor internal communication of corporate social responsibility programs can have many impacts. If key staff and departments do not understand how the program impacts their organizational functions, they may not effectively support the program goals.
Overcoming Contradictions
In many cases, corporate social responsibility goals may be perceived as contradictory to the goals of other departments, and instead of support and participation, the corporate social responsibility program staff may receive resistance from these departments.
And if corporate social responsibility program staff does not take the time to communicate program goals and requirements to internal stakeholders, they miss the viewpoint and experience of staff that may be able to contribute to program development and effectiveness.
They may also miss opportunities to connect the program to other corporate initiatives, adding value to a corporate social responsibility program that may be seen as a financial drain by uninformed staff.
Larger organizations can find that multiple departments are working redundantly on similar initiatives, instead of pooling their efforts. At worst, multiple projects like this may even contradict one another.
When developing a corporate social responsibility program that manages supplier compliance, it is important to determine which staff are key stakeholders early in the process, and to develop a communication plan.
A steering committee should have a sponsor in senior management, and should include representatives from the corporate social responsibility department (if there is an independent department), legal, sourcing/merchandising, investor relations, corporate communications, and perhaps even other entities such as finance and product development.
Aside from the corporate social responsibility program staff, the internal stakeholders who are often closest to this type of program are the sourcing/merchandising staff.
Buyers have become more accustomed to adding social and environmental compliance to the traditional list of criteria – cost, quality, and capacity.
Bring in the Buyers
Many times, communication to the buyers is relegated to informing them of the standards that their suppliers must uphold, and how they are required to participate in the process (often by producing an approved audit report). This communication often exists in the form of training seminars or internal documentation.
The requirements asked of the sourcing staff present a challenge in that, more often than not, buyers are only evaluated on their suppliers’ ability to provide quality merchandise inexpensively and in a timely manner.
The participation and success of their suppliers is required, but often not measured and accounted for in buyers’ compensation. This often leads to an adversarial relationship where the corporate social responsibility department is seen as an obstacle to the success of a buyer, instead of a partner in the success of the organization.
Early education and communication with these stakeholders can improve adoption and acceptance by allowing the buying staff the opportunity to voice concerns.
It also allows them to prepare any changes that may need to be made to their job functions as early as possible.
And the Lawyers
Another key group of internal stakeholders that is often neglected is the legal department. Many corporate social responsibility staff members perceive legal departments as necessary evils that should be engaged as infrequently as possible if progress on an initiative is to be expected.
Elliot Schrage, senior fellow in business and foreign policy at the Council on Foreign Relations and former senior vice president for global affairs at Gap, recognizes this challenge, and invites corporate social responsibility departments to “approach the legal department early in the process of developing a program, and offer it as an opportunity that is presented early, versus a problem that arises later.”
In-house council is a stakeholder who is close enough to the company to understand the organizational needs, and who also has the background to anticipate potential legal risks.
Legal is obviously a necessary participant in the drafting of any agreements with business partners, such as a code of conduct, but is also one who can provide value when developing other elements, such as the internal reporting structure of the program.
Surprisingly, some corporate social responsibility programs overlook the corporate communications department.
Not Forgetting the Communications Department
More often than not, it is the corporate communications department that approaches the corporate social responsibility staff, in order to collect data on the company’s sourcing practices for external sustainability reporting.
By neglecting to make the communications staff an active participant in the program, the corporate social responsibility staff is losing an opportunity to influence a larger audience within the organization.
The skill set of the communications staff can benefit the corporate social responsibility departmental staff in several ways.
First, they can help target the appropriate internal (and external) audiences.
Secondly, they can work with the corporate social responsibility staff to craft a message that concisely describes departmental and organizational goals and requirements in a way that encourages support.
The communications staff can also help choose the mediums that best carry the messages to various stakeholders at multiple levels. They can also manage the process of ensuring that both internal and external communications remain consistent, as this is vital.
Since corporate social responsibility programs are an investment in the long-term sustainability of the business, the communications staff must understand how to integrate the corporate social responsibility department’s actions into the most basic value statements that are at the core of the organization’s beliefs.
With the rise in socially responsible investing, investor relations departments are increasingly turning to corporate social responsibility program staff to answer questions being asked by socially responsible investment firms.
Carlos Joly, the co-chair of the United Nations Environment Program Finance Initiative Asset Management Working Group, makes the case that the actions of the corporate social responsibility department add to the long-term value of the company. Sustainability reports are a great opportunity to demonstrate to financial analysts that the company is increasing its value by investing in its long-term health and growth.
Tangible areas where a corporate social responsibility department can add value are in the recognition and mitigation of potential risks, and by providing the organization with a closer relationship with emerging markets.
This viewpoint is even gaining increased credibility among mainstream analysts who do not focus specifically on socially responsible investments.
An indicator of this is the endorsement by many major banking institutions, including Deutsche Bank, HSBC, and ABM AMRO, of the United Nations Global Compact initiative “Who Cares Wins”, which is working towards integrating environmental, social, and governance issues into methods used by mainstream analysts.
Products and Innovation
The product development staff may also require greater involvement in some organizations over others. This applies especially to products such as automobiles or household appliances.
In their sustainability report, the Carrier Corporation describes the efforts that their product development staff has taken to design their products in a sustainable way.
They have succeeded in creating air conditioners that are constructed with fewer materials, are more energy efficient, and use refrigerants that do not damage the ozone layer.
This focus on sustainable practices has led to the development of new products, and products with improvements that create competitive advantages.
This is example of engaging internal stakeholders at the beginning of the product lifecycle in order to demonstrate the value that corporate social responsibility practices have added to the organization.
Three groups that are not generally associated with supplier compliance programs are the sales, marketing, and retail staffs. This is unfortunate, because this is the most prominent public face of many companies.
Educating these groups of stakeholders puts them in a better position to address critics or to demonstrate how the corporate social responsibility program adds value to the organization, product or service.
For example, educating retail managers on the corporate social responsibility program allows them to speak to customers who want to be reassured that they are buying a product that is made in an ethical manner.
Another example is of a manufacturer being able to demonstrate to a licensor or retailer that their corporate social responsibility program supports that of their potential customer.
HR and Auditing
The marketing department should also participate in the communication, as they may be able to integrate corporate social responsibility efforts into future branding campaigns.
Two other “back-end” departments that are sometimes neglected in communications regarding supplier compliance are human resources and internal auditing. If a system of internal audits is already being conducted within the organization, the audit staff may be able to contribute to developing a system of supplier monitoring.
Human resources may also benefit by incorporating supplier compliance issues with internal corporate ethics programs, so that both internal and external ethics programs support and reflect one another.
In general, organizations should take care to ask themselves who within the organization is not being engaged regarding all corporate social responsibility initiatives.
Employees who remain informed about the efforts of their employer, are put in a better position to feel good about the company for which they work, which ultimately leads to reduced turnover.
John Paluszek, senior council for Ketchum, a public relations agency, stated: “Employees can be potent ambassadors for a company, either positively or negatively. A personal testimony about a company by one of its employees is a convincing statement about the organization.”
Finally, effective internal communication on corporate social responsibility policies should always include senior management – all the way up to the chief executive.
Without buy-in from senior management, corporate social responsibility programs run the risk of losing support throughout key areas of the organization.
Members of management need to understand how the program adds value and why it needs to be given consideration during the development of budgets.
A great way to add value to management’s role is to equip them with ways to address critics, especially in public forums such as shareholder events.
If the values that the corporate social responsibility program supports are not integrated with the long-term vision of the company, they will be perceived as a short-term financial drain, versus a long-term value-add.
It is important to proactively educate all stakeholders on this larger perspective, and get their buy-in early, before they have the opportunity to develop an uninformed opinion.
An ounce of prevention used in developing an effective communication plan is worth the pound of cure required to change the minds of stakeholders whose support is required to meet the goals of the corporate social responsibility program and of the organization.
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Ryan Lynch is regional manager at Cal Safety Compliance Corporation (CSCC), a specialist in corporate social responsibility monitoring and consultation.
This article has been reprinted courtesy of Ethical Corporation magazine. It was first published in January 2005.
