Theme of the month: CSR

Corporate Social Responsibility (CSR) is not the best term to really define what is Corporate Sustainability, because the name CSR is focusing only in the social aspect; when in reality, sustainability must address the three bottom lines: social, environmental and economic.

First, let me define sustainability. In The Sustainability Handbook, Blackburn offers a definition of sustainability as: “The wise use and management of economic resources; and, respect for people and other living things” (Blackburn, 2007).

However, taking in consideration the realm of corporations, in Mainstreaming Corporate Sustainability, Farver defends the right equilibrium between the three bottom lines while also being accountable to the stakeholders: “Corporate sustainability means balancing environmental stewardship, social well-being and economic prosperity while driving toward a goal of long term success for the health of the company and its stakeholders. A sustainable corporation is transparent in its management of these responsibilities and is held accountable to its stakeholders for its results”. 

The ingredients for a health Corporate Sustainability are: transparency, footprint measurement, an efficient infrastructure, stakeholder engagement and supply chain management. Such ingredients would allow a company to put in place a strong Sustainability Management System, which is the final framework for the sustainability implementation in all levels of the corporation.

In the subsequent week of this month, I’m going to explain more about the basic core steps of Corporate Sustainability: Corporate Governance and Stakeholder Engagement. So first, the Sustainability Footprint Measurement.

The catalogue of all activities, products and services that have environmental and social effects derived from an organization existence is the sustainability footprint, which when calculated and valued, defines how impactful a company can be (Farver, 2013).

The calculation process is not trivial, and needs to follow a process and a scope in order to be effective. The scope must be defined at the beginning of the process, thereby setting boundaries for the inventory-impact analysis. The boundaries are necessary to limit the process/processes that will be analyzed, and to access the data in full, not letting any detail escape. Such boundaries may later be expanded in order to cover the whole organization footprint (e.g., manufacturing shops, employees commute, suppliers, product end-use, power consume and type, etc.) (Farver, 2013).

After setting a specific boundary, it is necessary to evaluate the use of resources and its wastes. The Process Mapping, a process improvement tool that depicts every activity flow in a procedure, is a powerful tool since it assesses not only the most obvious or core processes, but also the support processes within a scope (e.g., HVAC, water treatment, lightening, etc.); and even able to supply workflows and value stream maps (Farver, 2013). In spite of the hard work involved, it is worth to use process mapping not only to measure the footprint, but also to analyze and find improvements to the process (Dias & Saraiva, 2004).

It is also possible to make use of Life Cycle Assessment (LCA) to make analysis from cradle to grave of a product; understanding and quantifying the socio and environmental impacts generated from manufacturing, packing, distribution, use and waste of a material (Farver, 2013).

Another concept to measure footprint is through its cost. The Value Chain Activity Inventory method entails that each step of production is an activity, and that measuring and managing its costs taking in consideration the view of resources utilized and lost, improves production control (Farver, 2013).

In order to decide which method to follow, it is necessary to take in consideration the risks, core-values, vision, and stakeholder’s interests of the company. The amount of scrutiny and transparency may affect the final result, therefore following a well-accepted reporting methodology, (such as the Global Reporting Initiative framework) and performing internal audits is a good practice to avoid errors or brand image damage (WRI & WBCSD, 2004).

The result of the sustainability footprint can later on be analyzed and used for setting targets and balanced scorecards throughout the corporation, also systematizing the way it is measured.

References

Blackburn, W. (2007). The Sustainability Handbook: The Complete Management Guide to Achieving Social, Economic and Environmental Responsibility. Washington, DC: Taylor & Francis.

Dias, S., & Saraiva, P. M. (2004). Use Basic Quality Tools to Manage Your Processes. Quality Progress, 37(8), 47-53. Retrieved October 28, 2016 from http://sharpthinkers.info/articles/Basic_Tools.pdf

Farver, S. (2013). Mainstreaming corporate sustainability: Using proven tools to promote business success. Cotati (CA): GreenFix.

WRI & WBCSD – World Resources Institute and World Business Council for Sustainable Development (2004). The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard, revised edition, Washington, DC.