Corporate Social Responsibility – why certification might help your business

Brid-Aine Parnell

Thursday 30 July 2015

A hot topic in Europe today, the drive for Corporate Social Responsibility demands that companies report their credentials to customers, employees and shareholders alike. Emerging standards and certifications are there to help them prove their CSR worth.

Corporate social responsibility (CSR) is growing in importance for all businesses, but high profile technology firms, in particular, have found themselves on the sharp end of some brutal PR disasters related to their CSR reputation.

For hardware manufacturers, ensuring CSR throughout the supply chain is now a top priority. Media stories detailing poor working conditions in China and other Asian countries have forced technology firms, and other companies who outsource part or all of the manufacturing process, to take a hard look at their suppliers. Horrific stories of suicidal workers, abusively long working hours and punitive systems in Chinese factories have caused a huge backlash and most companies operating in the region now monitor and report on their supply chain voluntarily to prove they take public concerns seriously.

Even for web-based tech firms, CSR is a huge issue. Companies like Google, Facebook and Twitter have faced protests and blockades in San Francisco as the industry’s success has caused a huge social divide in the city. Resentment has grown among residents facing gentrification and a soaring cost of living, including massive rent and property price hikes, which is often blamed on the presence of these large companies and their well-paid staff in the city.

Wherever a global tech company is headquartered, or wherever its suppliers and factories are, these days, it needs to respond to the moral standards of people everywhere. It is PR disasters in the European press, for instance, that are driving CSR change in Chinese factories. A recent episode of the Swedish documentary series Kalla Fakta [Cold Facts] that investigated several large companies’ supply chains and analysed their environmental, sustainable and social responsibilities was widely discussed. CSR is a hot topic throughout Europe.

For the most part, meeting CSR obligations has been a voluntary process, as very few legal requirements exist in any industry. However, certified programmes, standards and guidelines are emerging to help companies clearly establish their CSR credentials in the eyes of their customers and shareholders.

“Thinking of standards in terms of best/worst is not necessarily the most helpful way to think of them,” explains Nicholas Jackson, senior researcher at Corporate Citizenship, a global business consultancy specialising in sustainability and corporate responsibility.

“There may be mandatory sector standards, which companies should of course comply with. However, in terms of voluntary standards, certifications and guidelines, these are about improving core performance and possibly reputation. So companies should choose those standards that help them achieve this.”

According to a 2015 paper from Corporate Citizenship on sustainability reporting, 95 per cent of the largest 250 companies in the world now produce a sustainability report for shareholders and the public, and over half of all public companies in the world include information on CSR in their annual financial reports.

“Transparency and accountability for social, environmental, and economic impacts are increasingly significant to stakeholders. These include investors, regulators, opinion formers, customers and employees, amongst others,” the paper states.

Standards, guidelines and certifications can help tech firms to report their own CSR initiatives in a way that’s more understandable to stakeholders. And keeping to standards can also help firms to come up with CSR processes and practices that work. For tech firms, a number of potential guidelines exist.

TCO and EPEAT are great third party certifications at the product level that help customers identify products that meet those standards requirements,” says Mary Jacques, global head of environment and sustainability at Lenovo.

TCO certification rates products based on user-friendliness, eco-friendliness and safety, while EPEAT is a global environmental rating system that helps customers identify greener computer and other electronic equipment.

“Another good resource is the Electronics Industries Citizenship Coalition (EICC). The EICC has established a code of conduct with best practices in supplier engagement that provides guidelines for performance and compliance in the areas of labour, health and safety, environment, management systems and ethics.

“Lenovo has adopted the EICC Code of Conduct and implemented Self-Assessment Questionnaires for our tier 1 production suppliers. We require plant sites to undergo audits from EICC-certified auditors and we conduct these activities for Lenovo facilities as well. By requiring our suppliers to undergo audits […] we’re trying to ensure third party oversight of claims made by our suppliers,” she pursues.

More general guidelines also exist, like those from the International Organisation for Standardisation (ISO), which, after five years of meetings with its worldwide federation of national standards bodies, came up with a framework of how businesses can operate in “an ethical and transparent way that contributes to the health and welfare of society”.

Whatever the standard or guideline, what’s clear is that technology firms need to be proving their CSR credentials if they want to stay competitive and keep their good reputation, as well as attracting and retaining employees, customers and investors, and establishing good relationships with other firms, governments, the media and the communities in which they operate.