Looking Forward: Why CSR Is More Important Than Ever
When it comes to the importance of social responsibility, there are concerns that the progress that has been made in the CSR space over the past few years may be undone during this continued crisis. Even though industries and organisations are pulling together to find solutions to the supply chain and business continuity disruptions caused by Covid-19, there are still reports of unsavoury environmental and labour practices happening around the globe. This can be seen even in the US. Many workers are faced with difficult ultimatums: return to work and risk their health, or stay at home and risk their livelihoods.
Meanwhile, the U.S. Environmental Protection Agency (EPA) has relaxed regulatory enforcement around environmental controls. For example, companies that can demonstrate that they could not avoid polluting water or air during the Covid-19 crisis will not be subject to penalties.
These developments underscore why continued CSR efforts are needed during this crisis. There is also historical precedent for companies to look to the future and prepare for what will happen when the crisis is over.
In the wake of the 2008 financial crisis, for example, many companies were subject to increased audits due to non-governmental organisation reports of lax standards in supplier factories. A number of them were found to have perpetrated serious environmental and labour rights violations, requiring auditors to issue more detailed corrective actions than ever before. On top of this, the C-suite began to more clearly understand the importance of social responsibility for the health of their business. As such, it is important that companies uphold the culture of CSR they have built even in the midst of the crisis in order to ensure future success.
It is reasonable to expect that the business landscape will experience the same trends after Covid-19. Non-governmental organisations, whistleblowers and the broader community will play major roles in this. Organisations and individuals will be deconstructing how their communities responded during the crisis, and as such, there will likely be an uptick in the naming of companies whose conduct was viewed as subpar.
Corporate social responsibility professionals must keep these outcomes in mind and ask their leaders one very simple question: What happens if the organisation’s reputation is damaged as a result of its practices during the crisis?
This question should not just apply to practices within the organisation’s four walls, but extend to the supply chain as well. Supplier behaviour can have a lasting impact on downstream companies. In addressing supply chain continuity, CSR professionals must ensure those suppliers are not compromising on labour, environmental or governance practices. This is how a successful recovery can be ensured: by coming out of a crisis without compromise.
Jared Connors is the Senior Subject Matter Expert, Corporate Social Responsibility, at Assent Compliance, where he helps companies across various industries to engage their suppliers and report on CSR topics of material importance to their business.