By now, the value of incorporating sustainability or corporate social responsibility (CSR) initiatives into your communications plans need not be stated--but what about
quantifying that value to measure its direct impact on business results? The desire to prove that "doing good" can directly translate to doing well is only natural, as it enhances
communications professionals' abilities to further their programs, manage crises and boost reputation. But, just as measuring other PR elements is a challenge, so is finding
tangible ways to demonstrate CSR's bottom-line contributions.
"Since its inception, CSR has struggled to build legitimacy against forces pressing corporate social and environmental strategies to demonstrate a direct, causal relationship
with stock performance," writes Claire Moroni, a research analyst and project manager for KLD Sudan Compliance, on "The New CSR" blog (newcsr.wordpress.com). "CSR is strategy, not
alchemy," writes Moroni.
Perhaps this statement best sums up the disparate forces at play when it comes to CSR measurement; however, even if alchemy is still your best bet at measuring your CSR
programs' impact on the bottom line, there are some ways to catalyze the evolution to quantifiable results:
*Convince senior management that CSR is the right thing to do through actions, not words. You can't measure what has yet to be executed, and you can't execute anything without
senior management's blessing (which comes in the form of time, money and dedicated staff, of course). Your best bet, then, is to determine the most compelling argument for a CSR
program.
"PR professionals often find themselves needing to make a case for CSR/sustainability when the company is facing--or could potentially face--a reputation crisis," says Liz
Gorman, VP, corporate responsibility for Cone Inc. "In these circumstances, senior leadership will be open to recommendations about the need for a CSR program--and one that
shouldn't just rely on community relations."
She points to an example that dates back to the late-90s, when sweatshop practices were destroying the reputations of companies such as Gap and Nike. When this led to sweeping
changes in manufacturing processes overseas, what began as a PR issue was resolved through a CSR strategy. But what if reputation risks aren't the biggest impetus to commit to CSR
and measure its business impact accordingly?
"PR professionals who don't foresee reputation risks on the horizon must articulate the reasons why CSR makes sense and build a business case," Gorman says. "You don't get very
far with senior leadership by just arguing that it's the right thing to do. Senior management will need to understand how a CSR program will be defined, and convinced that it will
benefit the business."
*Start with simplicity. Of course, Gorman's statement about convincing senior management that a CSR program will benefit the business implies, well, measurement. She offers a
few ways to begin putting measurement systems in place that can evolve into larger business benefits:
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Environmental policies: "When it comes to environmental responsibility, a company will begin by developing an environmental policy or mission statement, which helps
them clarify priorities and areas of focus, such as the efficient use of energy and other resources. A company will capture baseline data of its energy footprint, and then over
time implement environmental--or sustainability--measures to help reduce energy use. By tracking energy usage, they can then see if the measures had a positive impact on reducing
their energy consumption--which also reduces their carbon emissions. Obviously, these types of initiatives can lead to cost savings over time, once any capital investment is
recovered."
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Employee Engagement: "Employee engagement is another example of how a company can measure the positive impact of its CSR initiatives. The research strongly suggests that
today's employees prefer to work for socially and environmentally responsible companies. Many companies embed questions in their employee surveys to determine how much their CSR
initiatives impact the level of employee engagement. Higher levels of employee engagement are linked to better company performance."
*Take it step by step. According to Joyce Witte, community investment adviser at EnCana Oil & Gas (USA), "Business is all about the bottom line, so beyond reporting on the
number of grants made and total dollars given, how can you dig deeper and demonstrate to management that your company's giving program is truly strategic?"
She answers her own question by suggesting a five-step program for evaluating community investment partnerships--a strategy that would be effective for any organization whose
CSR initiatives had a charitable giving or community relations focus:
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Level 1: T-shirts & Banners: Witte describes these as single-day, event-driven sponsorships, and does offer the caveat that they have a limited scope in terms of
ROI because participation is often shared by many organizations. However, she says, "Some level one investments will always make sense, especially if company representatives can
participate in the event and use the opportunity to build meaningful relationships. Access to an audience that includes your stakeholders is worth the minimal investment."
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Level 2: Responsive Giving: This involves grants to organizations that aren't necessarily in your area of focus; they are best described as "one-time gifts" given under
pressure from internal or external leadership, or simply out of goodwill.
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Level 3: Strategic Giving: Witte defines this as investments that fall without your areas of focus (a medical manufacturer investing in a local wellness clinic, for
example) and offer ROI. "Strategic giving is the target when it comes to demonstrating the value your program has for the company," she says. "Being strategic means proactively
seeking out initiatives that will benefit both the community and the company."
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Level 4: Strategic Partnerships: Level 4 implies a proactive stance that contributes to the brand. "The key to level four grants is recognizing that your partner
organizations are helping define your corporate identity and provide measurable results that you can communicate both internally and externally and repeat in other markets," Witte
says.
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Level 5: Integrated Business Plan: This plan leverages and brands the company's core business and has a direct impact on market share (see sidebar). PRN
CONTACTS:
Liz Gorman, lgorman@coneinc.com; Joyce Witte, joyce.witte@encana.com
How To Evaluate Strategic Giving
Familiarize yourself with the five levels of community investment partnership (see above) and, using numbers 1 through 5, review each grant with your community investment team
and assign a number to the grant. Add up your total score in each category and calculate the percentage each level represents of your total giving. A successful strategic program
will return 70-80% of your grants with a score of 3, 4 or 5.
Reporting these kinds of results to the executive management team will not only put your program into visual language they can understand, but also it will demonstrate the
value CI brings to the core business and bolsters your program's credibility.
Source: These tips were provided by Joyce Witte, community investment advisor
at EnCana Oil & Gas (USA) Inc., for the PR News Guide to Best Practices
in Corporate Social Responsibility, Volume 2. For more information, visit https://www.prnewsonline.com/store/9.html.