{"id":5529,"date":"2019-10-03T05:19:34","date_gmt":"2019-10-03T10:19:34","guid":{"rendered":"http:\/\/flevy.com\/blog\/?p=5529"},"modified":"2020-12-20T20:48:37","modified_gmt":"2020-12-21T01:48:37","slug":"when-sustaining-stakeholder-interest-is-essential-the-importance-of-corporate-social-responsibility-csr-sources-of-value","status":"publish","type":"post","link":"https:\/\/flevy.com\/blog\/when-sustaining-stakeholder-interest-is-essential-the-importance-of-corporate-social-responsibility-csr-sources-of-value\/","title":{"rendered":"When Sustaining Stakeholder Interest Is Essential: The Importance of Corporate Social Responsibility (CSR) Sources of Value"},"content":{"rendered":"

Companies face increasing pressure from governments, competitors, and employees to play a leading role in addressing a wide array\"\" of environmental, social, and governance issues in a company\u2019s supply chain. It could range from climate change<\/a> to obesity to human rights.<\/p>\n

For the past 30 years, companies have responded by developing corporate social responsibility or sustainability initiatives to fulfill their contract with society by addressing these issues.<\/p>\n

Strategy development<\/a> calls for gathering data needed to justify sustained, strategic investment in programs. Yet, this can be difficult.\u00a0 Without this information, executives and investors often see programs as separate from a company\u2019s core business or unrelated to its shareholder value. While there are companies that have made progress tracking operational metrics or social indicators, they have difficulty linking such metrics and indicators to a real financial impact.<\/p>\n

Needless to say, there are companies that are creating great value and achieving operational excellence<\/a> through environmental, social, and governance activities.\u00a0 Increased sales, decreased costs, and reduced risks are being achieved.\u00a0 Environmental, social, and governance programs can create value in many other ways. We just need to know where and how.<\/p>\n

What is Corporate Social Responsibility<\/strong><\/h2>\n

Corporate Social Responsibility (CSR)<\/a>\u00a0or sustainability initiatives are undertaken to fulfill contracts with society to respond to environmental issues. Environmental, social, and governance refer to a broader set of CSR Programs.<\/p>\n

\u00a0<\/strong>Sustaining strategic investments in CSR Programs can be a challenge but there are already leading companies that are generating real value through environmental, social, and governance activities.<\/p>\n

The Dynamic Ways of Creating Value<\/strong><\/h2>\n

CSR Programs can create shareholder value<\/a>. It is just important that companies must broaden their legitimacy in societies where they operate.<\/p>\n

\"\"<\/a><\/p>\n

 <\/p>\n

    \n
  1. Growth<\/a>.<\/strong> As a source of value, Growth can be expressed in terms of New Markets, New Products, New Customers, Market Share, and Innovation. When this is created, it can deliver higher brand loyalty, reputation, and goodwill with stakeholders.<\/li>\n<\/ol>\n
      \n
    1. Return on Invested Capital (ROIC).<\/strong> ROIC is generated when there is operational efficiency and workforce efficiency. When this is achieved, it can result in better workforce skills and increased productivity through participation in ESG activities.<\/li>\n<\/ol>\n
        \n
      1. Risk Management<\/strong><\/a>. Risk Management is a source of value. It can be achieved when risk is lowered when compliance with regulatory requirements are achieved.\u00a0 Public support is achieved and the ability of your company to secure consistent, long-term, and sustainable access to safe, high-quality raw materials and products are established.<\/li>\n<\/ol>\n
          \n
        1. Management Excellence<\/strong>. Management Excellence can have an impact on leadership development, adaptability, and long-term strategic view. These are 3 key areas that investors consider most important when evaluating potential partnerships.\u00a0 With Management Excellence, a value can be generated from these areas.<\/li>\n<\/ol>\n

          A Look at IBM: A Clear Example of CSR as a Source of Value<\/strong><\/h2>\n

          IBM<\/a> has been recognized globally as one of the leading companies when it comes to Information Technology.\u00a0 In creating new markets, IBM used Small and Medium Enterprise (SME) Toolkit to develop a track record with local stakeholders, including local governments and NGOs.\u00a0 Free web-based resources on business management were provided to SMEs in developing economies. A total of 30 SME Toolkit sites were developed in 16 languages.<\/p>\n

          As a result of this initiative, IBM\u2019s reputation and relationships in new markets improved.\u00a0\u00a0 Likewise, the relationship with companies that are potential customers was developed.\u00a0 The strategic approach of IBM in creating markets through its CSR has provided IBM much value in creating and developing relationships which are essential in new markets.<\/p>\n

          Interested in gaining more understanding of sources of value to CSR programs<\/a>? You can learn more and download an editable PowerPoint about Corporate Social Responsibility (CSR): Sources of Value<\/strong> here<\/a> on the Flevy documents marketplace<\/a>.<\/p>\n

          Do You Find Value in This Framework?<\/h2>\n

          You can download in-depth presentations on this and hundreds of similar business frameworks from the FlevyPro Library<\/a>. FlevyPro<\/a> is trusted and utilized by 1000s of management consultants and corporate executives. Here’s what some have to say:<\/p>\n

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          “FlevyPro has been a brilliant resource for me, as an independent growth consultant, to access a vast knowledge bank of presentations to support my work with clients. In terms of RoI, the value I received from the very first presentation I downloaded paid for my subscription many times over! The quality of the decks available allows me to punch way above my weight \u2013 it’s like having the resources of a Big 4 consultancy at your fingertips at a microscopic fraction of the overhead.”<\/p>\n

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          “Several times a month, I browse FlevyPro for presentations relevant to the job challenge I have (I am a consultant). When the subject requires it, I explore further and buy from the Flevy Marketplace. On all occasions, I read them, analyze them. I take the most relevant and applicable ideas for my work; and, of course, all this translates to my and my clients’ benefits.”<\/p>\n

          \u2013 Omar Hern\u00e1n Montes Parra, CEO at Quantum SFE<\/p>\n<\/blockquote>\n","protected":false},"excerpt":{"rendered":"

          Companies face increasing pressure from governments, competitors, and employees to play a leading role in addressing a wide array of environmental, social, and governance issues in a company\u2019s supply chain. It could range from climate change to obesity to human rights. For the past 30 years, companies have responded by developing corporate social responsibility or… When Sustaining Stakeholder Interest Is Essential: The Importance of Corporate Social Responsibility (CSR) Sources of Value<\/span><\/a><\/p>\n","protected":false},"author":111,"featured_media":5531,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"neve_meta_sidebar":"","neve_meta_container":"","neve_meta_enable_content_width":"","neve_meta_content_width":0,"neve_meta_title_alignment":"","neve_meta_author_avatar":"","neve_post_elements_order":"","neve_meta_disable_header":"","neve_meta_disable_footer":"","neve_meta_disable_title":"","footnotes":""},"categories":[114,85],"tags":[1758,712,1756,328,1759,1757,77],"class_list":["post-5529","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-corporate-communications","category-organization","tag-and-governance-programs","tag-corporate-social-responsibility","tag-environmental","tag-operational-excellence","tag-shareholder-value","tag-social","tag-strategy-development"],"_links":{"self":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts\/5529","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/users\/111"}],"replies":[{"embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/comments?post=5529"}],"version-history":[{"count":8,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts\/5529\/revisions"}],"predecessor-version":[{"id":8079,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts\/5529\/revisions\/8079"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/media\/5531"}],"wp:attachment":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/media?parent=5529"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/categories?post=5529"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/tags?post=5529"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}