Companies embrace social responsibility as essential part of business

07-02-2013

At a conference co-organized by T-Mobile Czech Republic and the weekly magazine Respekt, representatives of top businesses in the country and those from the non-profit sector came together to discuss how businesses could help society. One of the main topics of discussion was how social responsibility strategies can go hand-in-hand with profitability.

U.S. ambassador Norman Eisen, photo: EconomiaU.S. ambassador Norman Eisen, photo: Economia To everyone in the room, there seemed to be no question of whether companies should be involved in helping those less fortunate, caring for the environment or social cohesion. The biggest question that resounded at last week’s conference entitled “Answers of Businesses to Social Questions” was how to do it, and how to do it right at a time of financial uncertainty. In his keynote address, the US ambassador Norman Eisen, spoke about the need for cooperation between corporations, government bodies and NGOs:

“Promoting a more comprehensive approach to corporate social responsibility is not a new topic, but this topic is receiving much more attention these days. The reason is simple – corporations, supported by NGOs and government have discovered that they have profound shared values in all three areas that make up the field of corporate social responsibility, which are – environmental, social and governance. And our society cannot progress, cannot break new ground in these three areas unless business is supported by NGOs and by government in all of those subjects.”

One of the creators of the conference, Martina Kemrová - the senior head of corporate communication at T-Mobile - told me that one of the main priorities of the gathering was to help managers responsible for corporate social responsibility (CSR) strategies to convince top-management at their respective companies about the necessity of contributing to social causes:

“Our main aim was to bring some light into the lives of the highly stressed CSR managers. We are living in interesting times – budgets are being cut, and CSR departments really suffer as a result. Because it is very difficult to explain why the company should spend money on something that is not a necessity. We’d like to help them to find facts and arguments, which could help them in arguing and persuading their management – to give them weapons to cope with a very uneasy situation.”

Libor Malý (second from the left) taking part in the panel discussion, photo: EconomiaLibor Malý (second from the left) taking part in the panel discussion, photo: Economia Most speakers made it clear that a real commitment to becoming involved in socially responsible activities comes from an sincere desire to be a conscientious part of society and, in a way, to give back. Libor Malý, who founded a highly successful website Jobs.cz in the mid-90’s, admitted that doing charitable work cannot simply be a branding technique:

“I would like to talk to you about how to make corporate responsibility not just a label that a company attaches to its name, but a part of the company’s DNA, because that is the only way to do it right. If it is encoded in the company - the fact that it has to function in the context of the society surrounding it - it gains a competitive edge, and it has a wider outlook than the competition. So, the company becomes more competitive, and society profits as well.”

Essentially, businesses do need to make a profit and grow. So how do socially and environmentally responsible activities influence the profitability and competitiveness of a company?

Many of the conference participants agreed that happier employees are an essential part of having the competitive edge. Volunteer activities for a good cause help motivate employees, which also, apparently, makes them more productive and loyal. T-Mobile, Ms Kemrová told me, created a program that supports new small enterprises. In addition to providing free telecommunication support, the company’s employees help advise up-and-coming entrepreneurs on how to develop their businesses.

“Our employees are highly motivated to be involved in this program, because from time to time everyone needs to know that he or she is doing something valuable, something that makes sense. And these unpaid activities – the CSR involvement – are very motivational for them.”

Martina Kemrová, photo: T-Mobile archiveMartina Kemrová, photo: T-Mobile archive Of course, something many CSR managers will not admit to openly, is that socially useful activities are also good PR.

But companies that want to embrace social responsibility not just as a label, but as a strategy, choose the activities that in some way correspond to their business priorities. Modern CSR strategies don’t have to be about making donations to the disabled, or planting trees in a park; they focus more on ways of helping and developing not only society but the market and the target audience of the given company.

For example, for the waterways company Veolia Voda, social responsibility means using environment friendly technology, supporting innovators in the field and educating the general public about environment issues. The technical director of Veolia, Ondřej Beneš, sees the activities geared towards the public as essentially a way to boost their business model:

“Innovations and their practical application means that we are better able to compete on the market. CSR in our case is completely linked with profitability, we openly admit that. In fact I would say that it is part of our work. In order to stay on the market, our company must provide customers with approaches and technology that are better than they were in the past and can better protect both the environment and the customer.”

For some companies, it makes sense simply to offer the services they normally provide without a fee to non-profits, as a way of giving back to society. For example, the advertising firm Ogilvy, offers its services to various organizations for free. The general director of Ogilvy, Dita Stejskalová, says that these services are not only a way to give back to the community, but also make their employees more conscience driven people.

Keynote speech, Photo: EconomiaKeynote speech, Photo: Economia “We are a young industry. The average age of the people working in advertising and PR companies is 35 at the most. These are highly skilled, well-travelled young people who think they know it all. So, when we began thinking, a number of years ago, about our role in helping others, we realized that although we don’t produce anything, we can use our employees’ skills for something that is worthwhile. We also wanted to shake our employees up a bit.

“More than 12 years ago we got together with an organization that works with handicapped people, and since then our employees with their can-do attitudes and fancy clothes do all the communication work for them, which is a great way to face a different reality for our staff.”

Although the main topic of discussion at the conference was, of course, how businesses can give back and work with the society surrounding them, inevitably conversation shifted to another topic that is very pertinent these days in the Czech Republic – corruption. The panelists - who were all from relatively large and established companies - understood better than anyone, that significant positive changes in society will not happen unless corruptive practices in the upper echelons of politics and business are eliminated, or at least limited. More businesses today understand that a big part of being responsible to society is also avoiding bribes and rigged tenders.

Martin Hausenblas, founder of the promotional textile company Adler, places a high value on a corruption-free business environment, and even prints this motto on his company’s invoices.

“We realized that we don’t need legislature to keep our company corruption-free. My company is my kingdom and I am the one responsible for it. And I think a leader should be able to pass that conviction on to his surroundings, which includes employees, clients and suppliers.”

Photo: Barbora KmentováPhoto: Barbora Kmentová Mr Hausenblas admitted that his strong and public stance against corruption had cost him a number of high-priced tenders. And it is hard to imagine that corruption could be fought completely without the involvement of the government. The same goes for social changes in general. The environment, the non-profit sector and small businesses cannot rely exclusively on the support of socially responsible activities of large corporations, there also has to be political will. The communication and connection between these three groups is a topic for further discussions. Martina Kemrová says it is already in the plans.

“When we were considering suitable participants for this conference, we came across the problem that there is no defined line between the obligations of the government [in terms of social policy] and the role of the big companies with regards to CSR policies. And this should be the theme of our next CSR conference, because it is very complicated to define this line – what helps the communities, but also what helps businesses, and how the role of the state should be perceived in this respect.”

07-02-2013