Our company took part in an interesting conversation with some people from large Swedish Enterprises about CSR (corporate social responsibility) work and if you really can measure the value for how much you invest in CSR or not? I am sure there are papers and thesis that can show ways to measure it but for most companies I meet that do a lot of CSR they do not have direct calculation or form on how much they invest in CSR and how much that could affect the balance sheet. Most companies from this region want to invest in doing good and fair business, but also invest in communities and care for the environment. Many focuses on “doing good” where they also trade. Some representatives for Swedish Enterprises felt that CSR will only really develop and grow if we can prove its value to the financial bottom line, we can show the value and development in the balance sheet. I don’t agree but understand the point of view.
So for us working as consultant to Enterprises and working on CSR related work do not have to perform or reach certain targets our clients and show in the balance sheet. There are other benefits or values. There are trademark values, employee’s perspective (they like working for a good companies), there are ethical principals (code of conducts) and there are owners and business leaders that also want to feel good about their business beside a certain amount of money in the bank account. Still here in Sweden and in Scandinavia, I do think the main motivator is the company’s reputation. Business here need to be on the moral high ground but they can also take out a premium price for their product or service as it comes with a value, also with a ethical or responsible value.
So what is important when you want to create a successful CSR programme?
Well from my point of view, companies should focus on sustainable business or programs, not charity alone. Better for them to choose partnerships and develop longer more sustainable relationships with charities or direct with communities. I know many don’t agree with me but I still think this is the best strategy if you want to make sure the Enterprises (the donors) stay in long term. The business of business is just that, it is business. I think charity and business of civics is for government but companies can do well by working with trade and supply chains, perhaps also technology transfers. Companies want to see direct result to work long term and there need to be mutual benefit to both the corporate and the charity/community. It is important to have clear targets or goals, make sure you inform everyone about those goals so they are shared and achieved by both partners. There also need to be clear discussion and information about exit, when this program will or project stop and what is the result both want to achieve. I am missing this transparency and open discussion in many CSR initiatives I see.
I have seen CSR project that makes me very frustrated as it is more about giving money, and leave, in stead of focusing on a sustainable long term approach that has a clear connection to the market. It is not a competition of how much money you gave away, it should be about what you want to achieve and then a clear idea on how to do it. Another challenge for many is how to handle the political influence. When large Enterprises come with projects or proposal it is understandable that political leaders or their representatives have own ideas on national or regional level what money should go to and they try to intervene and steer money and investment in particular ways. That is why I feel it is so important that the Enterprise to have a clear idea from they start of what they want to do and why. This is easier for them to achieve this if their CSR program or project have a relationship to their own business. If then Enterprise and political representatives share these goals it will be easier to achieve them. I know not all agree with me on this but it is still my point of view today. I also think a CSR program is like a business strategy, it is a living process. You start then measure, refine, check or measure again, tweak, measure again and so on. It is a process and you have to be flexible while keeping a firm eye on the overall goal of the program.
Can you calculate CSR value in the balance sheet?
So back to the original question, can you really can measure the value for how much you invest in CSR work and present that in a balance sheet? I don’t think so, at least it is not east to make a correct value and I don’t know of any good form you can use. I am a firm believer that companies should invest and work with CSR where they also do business so they can see relationship between work and benefits in their own business. We want to do good responsible business and we can transfer that good business to our customers that are prepared to pay a premium price for most things here in Scandinavia. Coffee Importers invest in coffee industry, furniture companies in forestry, retail in the goods they also want to sell etc. Of course, if they only want to raise money to give to others to invest and use best way possible it is everyone’s right. Have seen for myself many good CSR projects in coffee but there are room for much more. As a advisor or consultant we recommend you invest where you also can see a connection to your own business. It will be easier for you to stay long term and create real sustainable values by your own CSR work.
If your Company or Enterprise want to discuss sustainable business or possible CSR work with us, you are welcome to contact us today.