The general perception of corporate social responsibility (CSR) as a ‘nice-to-have’ component in the company marketing plan has all but disappeared.
Global companies, running the risk of severe fines or sanctions and a loss of customers or brand reputation are now taking on board the importance of complying with government and industry regulations.
Scandals such as the horse meat story caused huge damage to suppliers and supermarkets, as did the fashion retailer that was recently under fire for selling radioactive goods. And consumers are not just concerned with CSR issues close to home, as pressure grows on companies that employ workers in terrible and deadly conditions – such the shocking Bangladeshi factory fires.
Pressure from consumers, added to new UK legislation requiring companies to protect human rights, shows the importance of employing sufficient supply chain and CSR tools. Yet despite this, businesses still have a number of hurdles to clear when it comes to CSR.
One of the main challenges is that CSR reporting involves ad hoc
and complex data processes involving a myriad of internal processes and external suppliers. These are difficult to measure, and are often recorded manually in various spreadsheets or costly third-party integrations, which are far too cumbersome and time-consuming for today’s fast-moving business-to-consumer market. Many companies do not have a system in place, face limitations with their current systems, or rely on third-party products or third-party integration for CSR data collection and reporting.
CSR management tools can help to effectively manage all facets of the CSR process and minimise unnecessary integration costs. They cover all facets of the programme, including incident reporting, incident handling, investigation, cause analysis and future recommendations, risk assessment and safety inspections. There are also various technologies in place for different sectors, including eco-footprint, export control, quality assurance and health and safety – all of which minimise and automate CSR accordance.
We will also soon see a greater demand for products and solutions that can help executives make business decisions based on hard data. This requires data collection to be automated and integrated in the general business reporting processes.
The benefits of implementing such tools and processes are vast – just consider the scale of damage that’s been caused by recent scandals. It is only by establishing CSR on an equal reporting footing as other financial aspects – and making the appropriate technology investments – that CSR will stop being a cost centre and start generating returns for shareholders.
☛ Alastair Sorbie is CEO at IFS
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