Corporate social responsibility (CSR) is a subject that is gaining increasing importance within business strategies, especially since ESG practices, which take into account the social and environmental impact of organizations, have become a new parameter of corporate governance.
The second sector has great potential for transforming society and, through corporate social responsibility actions, can make contributions to society while benefiting from them.
The world is more demanding when it comes to corporate positioning and certainly organizations with responsible management and a commitment to sustainable development respond better to investors, business partners, consumers and society.
In order to support leaders in understanding their potential for social contribution, we will explain below 5 concepts that will help put corporate responsibility into practice.
What is Corporate Social Responsibility?
Corporate social responsibility is a business approach that looks beyond the market, sales and profit, and is based on holding companies accountable for the impacts they have on the environment and society through the production chain they operate.
It is an ethical positioning, of good ESG practices, of companies that seek to leave a positive legacy for society and which in turn takes into account the internal and external public and other stakeholders of the business.
Enterprises are often linked to negative externalities, but it's not enough just to mitigate these risks - a company that deserves to be in the world needs to be attentive to generating value for society as a whole.
To put this into practice, it is important to have a specialized team that knows how to identify and draw up a coherent and effective action plan. Read on to find out more about 5 concepts that support specialists in drawing up the most effective corporate social responsibility actions.
1. Relationship with stakeholders
It's worth remembering that every enterprise has to comply with obligations in order to secure a license to operate, in addition to meeting the rules and conditions of the government and environmental agencies. But even if the responsible company complies with all the rules, this does not mean that it is exercising corporate social responsibility. This is because the protocol does not always take into account the real needs and challenges of all the stakeholders, who should be informed and in agreement with the company's governance practices.
Companies seeking to keep their business afloat need to go beyond their own benefits to take care of their relationships with stakeholders - be they suppliers, neighbors, the community, beneficiaries, service users, employees, shareholders, customers, investors and other publics that are directly or indirectly related to the company's activities.
A social outlook is essential for prosperity, because without social development, there is no business development. And this has nothing to do with political ideology.
Mitigating or compensating for negative impacts that economic activities may have is important, and is very different from donation, charity or philanthropy. It's about taking responsibility for promoting the sustainable development of territories and positively impacting the company's reputation, with growth in sales and profits.
2. Materiality matrix
Based on the relationship with stakeholders, it is possible to collect data and conduct interviews to understand how stakeholders expect corporate social responsibility to be implemented and thus establish the materiality matrix.
A material issue, for example, is the contamination of effluents derived from some manufacturing activity. When this causes problems for the surrounding community, the effluent must be treated. If this was generated by the company in the past, it is the company's social responsibility to compensate for it in the present.
Material topics are those that are most important and strategic and can serve as a guide for optimized ESG management. Through a materiality analysis it is possible to choose which actions to invest in strategically.
In this process, it is necessary to know the social and environmental risk and impact matrix of the enterprise and of each operation. Based on these matrices, targets and internal policies will be established and the results of corporate social responsibility will be reported.
Publishing a sustainability report is an important step in documenting the process and communicating the company's good practices to society.
3. S-ROI: Social Return on Investment
Among many methodologies for creating impact reports and documenting corporate social responsibility actions, the S-ROI was created in an attempt to calculate the Return on Social Investment.
On the one hand, it is very important to understand how the resources allocated to positive social impact actions are generating results, and looking for methods to calculate this serves as a basis for developing the actions. On the other hand, it is necessary to carefully consider the subjective nature of the perennial social impact that sometimes cannot be measured, so that pragmatism does not hinder social development.
4. Social Agenda
The Social Agenda concept has been put into practice through the partnership project with Nexa Resourcesis the structured planning of social action in a given territory over the long term.
It is possible to organize the schedule of actions from the territorial study, socio-economic diagnosis, through the preparation phase to the implementation of the local development plan. With knowledge of the local reality, active listening, social dialogue and stakeholder participation in prioritizing investments and, finally, in monitoring their implementation, social governance and social investment with a positive impact are guaranteed.
5. Territorial Development
As we are talking about corporate social responsibility in the context of works and interventions in the territory, it is worth pointing out that there is a practice of "counter logic" that has been imposed historically and is not very consistent in the long term.
Thus, territorial development is a concept that prevents social responsibility from being restricted to resolving conflicts and immediate, specific and diffuse demands, but which requires more community engagement in order to create a robust social legacy.
In this context, partnerships are very desirable, especially when there is the possibility of leveraging the organizations that are already present in the territory and can already address the territory's challenges.
To implement corporate social responsibility and construction risk management projects, Diagonal has developed its own methodology, based on social dialogue, which encompasses these 5 concepts and favors the sustainable development of territories.
Find out more about our social and environmental management cases with the private sector here.
