Buying into CSR boosts profits and recruitment
CSR is often regarded as the new buzzword for
'community involvement'. But Ed Williams, head of CSR at Marks & Spencer,
believes it has a strong business case, maximising investment and encouraging
innovation. Ross Wigham reports.
Employers that can prove they are socially responsible organisations will benefit from increased investment, and find it easier to attract new employees and customers.
This is the message from Ed Williams, head of corporate social responsibility (CSR) at Marks & Spencer, who is convinced the issue will prove increasingly central to the competitive advantage of organisations.
CSR's profile has significantly increased since the Enron and WorldCom accounting scandals prompted President Bush to call for CEOs to ensure business operates more responsibly.
If proposals to make directors responsible for corporate behaviour are introduced in next year's Company Law Review as expected, then UK employers will also be forced to take the issue more seriously.
But Williams stressed the main driver for CSR should be an understanding of the impact it has on the bottom line.
"The business case for CSR is very strong," he said. "In retail, for example, media coverage of unethical products would cost a lot of money. Ultimately, we are here to make money - but we want to do that in a responsible and ethical way.
"CSR can give you a competitive advantage because it enables you to retain and attract staff and bring in new customers."
Two years ago, M&S set up a department dedicated to promoting CSR within the business, to ensure it is embedded in the company's culture. It has also produced a CSR framework (see box ) to make sure all staff are aware of the company's values.
"Much of what we are doing was already in the company's bloodstream. It is essentially about trust, and that is so important because consumers are making more informed ethical choices on what they buy," Williams explained.
He said that as well as being vital for M&S's brand image that its products and services are ethical, the firm has a moral obligation to put something back into the community.
"When you take a profit from a business, you have to accept a certain responsibility with that. Some firms think it is just a trendy new word for community involvement, but we think it runs through everything a company does," he said.
Williams said new research shows that an organisation's CSR record is becoming increasingly important to investors, with 80 per cent of private shareholders wanting information on the non-financial performance of a company. "Good CSR can really maximise investment because it lets investors know that a company is responsible," he said.
It can also encourage innovation by increasing shareholder discussion and participation, which forces companies to continually look at new ways of doing things.
Williams is supportive of the Business in the Community initiative to produce a CSR index. It is due to be published next month, and will benchmark the UK's biggest companies on CSR.
He thinks this is a better way of providing information on a company's approach to corporate responsibility than forcing them to include details of their non-financial performance in the organisation's annual report.
"The annual report is already a big document, so I'm not sure companies could add CSR to that. However, investors should be able to see what a company does in terms of CSR," he said.
Last year, the EU considered introducing legislation to force companies to meet certain standards, but Williams said regulation would hamper innovation and lead to a tick-box approach.
"If the EU regulates further, it will stifle innovation and we'd lose the momentum. It's not reinventing the wheel - good companies should be doing these things already," he said.
M&S has launched a range of recent initiatives to meet its own CSR objectives. It also has a CSR forum made up of managers from all M&S business units to ensure they are embedded throughout the entire business, and Williams reports directly to the chairman.
This year, the retailer will offer 600 work placements to homeless people. This follows a successful pilot scheme which saw 37 per cent of the placement individuals securing jobs with M&S or another employer.
Under the scheme, candidates are given training, work experience, advice on CVs and a reference. Williams is currently looking to expand the model to include disabled people, the long-term unemployed and ex-offenders.
M&S has just extended its CSR remit overseas, giving free literacy classes to staff at a supplier in Morocco. "It's not a philanthropic thing. It's aligned to the business values as well as being a good thing to do," he said.
People management forms a crucial part of any overall CSR policy, and Williams himself has an HR background as a training and development manager with the retailer.
The way a company deals with its people is the first strand of responsibility and can often be the defining factor in a tight labour market, he explained.
"Employees are making more informed choices about where they want to work. That is often based on how much they see us as a responsible organisation."
Williams believes HR is key in driving the CSR initiative and said people processes are essential in making it work.
His next project is setting up an academy with the DTI to improve the skills of CSR professionals. He hopes this will set an example and offer inspiration to other organisations.
CSR - What does it mean to M&S?
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