Key points

• - Self interest is out, while corporate virtue is gaining a strong foothold
• - Companies that exhibit good corporate citizenship are likely to gain a competitive edge which emerges from a more positive corporate image.
• - It s clear that HR practitioners have a role in CSR, but the scope varies greatly between organisations.
• - CSR initiatives are mostly driven by CEOs with HR as the facilitator.

Corporate Social Responsibility (CSR) is all the rage in the world's boardrooms. It is not enough nowadays for companies to make profits and boost shareholder returns. Companies, particularly big ones, are expected to return something to the community, to go out of their way to help others and display an apparent lack of self interest. Critics say CSR is merely a veneer painted over the dark face of capitalism: a sort of tacit admission by CEOs that the pursuit of profit is rather unsavoury and that their organisation will benefit from being seen to be doing the right thing. Critics also note that the resources a company invests in CSR programmes, CSR consultants, and CSR initiatives don't, in fact, belong to the company, but to shareholders, and that giving with the money of others isn't quite the same as giving oneself.

The role of human resources in CSR seems equally debatable. One large insurance company, with billions in assets and countless community projects throughout the world, politely told Human Resources that its HR department is in the business of hiring actuaries, not promoting CSR, which is run by the corporate affairs office. "Call back when you're working on something more HR oriented," they told us. Several HR consultants Human Resources spoke to agreed with this viewpoint. "Human resources has nothing to do with CSR," said one. "They should be focusing internally on talent."

On the other hand, several companies Human Resources spoke to see a definite role for HR in their firm's CSR activities, if only in the form of supporting CSR rather than driving it. 

"CSR programs have lots of benefits," says Richard Welford, director at Hong Kong think tank CSR Asia. "Employees want to work for companies they trust and respect.  People don't want to work for companies that are irresponsible." He feels CSR helps companies with things like productivity, performance, retention and recruitment, and companies with a negative image, such as tobacco companies, find it very difficult to recruit top talent. "One of the most important aspects of CSR is respecting your employees. One of the roles of the HR department is to find a balance between getting your workers to work productively and not treating them badly."

Global reach

Cadbury Schweppes is one of the world's biggest food and beverage manufacturers. Its brands, which include Cadbury Dairy Milk chocolate, Snapple, Orangina, Halls, and 7UP, are sold in virtually ever country. Every year, the company publishes a lengthy CSR report that details all its CSR activities on a global basis. Chapters cover topics such as what CSR means to the company, the company's responsibility to consumers, and various other CSR issues. 

Pippa Greenslade, regional human resources director of Cadbury Schweppes Asia Pacific, agrees with Welford's point of view. She says CSR is one of Cadbury Schweppes' top five strategic goals, that it is very important for the reputation of the company, and that employees like working for a company they feel treats them well and gives them opportunities to help their community. "CSR originates from our principles and values, and also an understanding that it is good business in that consumers care about how a company works with suppliers, how it produces its products, and how it treats employees." 

Greenslade says the company treats CSR as everyone's responsibility, and that it is driven very much by the company's CEO, Todd Stitzer, with the company's chief HR person sitting on the company's CSR governance committee. In Cadbury Schweppes' various CSR initiatives, HR is primarily used as a facilitator, with HR putting in place processes, committees, and discussion groups to help the company achieve its CSR goals. "HR would not be expert in many of the CSR areas, but it would be the facilitator and provide support." 

Areas of CSR where HR takes a lead role include equal opportunity, health & safety, and also working practices. "In regard to working practices, you would expect any company of Cadbury Schweppes' size to have minimum HR standards, and it is part of my team's responsibility to ensure those standards are met," says Greenslade. "With health & safety, it is factory managers' responsibility, but HR also has a role." 

When interviewing potential new employees, Cadbury Schweppes shows them the CSR report to help raise awareness of issues and prompt questions. CSR is also part of a new employee initiation programme. "It gives people a flavour of the company," says Greenslade. "And when people join, one of the first things they do is sign our statement of business principles." Every year, HR asks employees to sign the statement again, with HR tracking adherence to it. 

For existing employees of all levels, Greenslade has organised lunch meetings at which staff play a special game that poses people with CSR dilemmas, ranging from personnel, to sourcing, to legislative issues. She says such sessions really get people thinking about CSR. She gives an example of a hypothetical dilemma that might be posed: "Say a relationship has been built with a supplier, but it comes to light the supplier is not meeting minimum standards in a particular area, what do you do? Do you work with him quickly to get him up to a certain standard? Do you discontinue the situation right away?  The game gets people to think about the issues you face in CSR."

Although HR is active in CSR at Cadbury Schweppes, Greenslade doesn't feel it was a challenge implementing HR polices that complement the company's CSR objectives because there is "great clarity" from the top on CSR issues. "If anything, we are a business that's very focused on our consumers and investors, so there is always a lot going on...CSR is part of a continuing journey. It's not a matter of getting senior management's engagement, it's more a matter of formalising things...CSR is one of the intangible things that links people with a company, and this is an important thing in the entire employment mix."

Although far smaller than multinational Cadbury Schweppes, Singapore-based travel facilitator Abacus International also finds that the HR department can play a key role in Abacus's CSR objectives. Similar to Cadbury Schweppes, HR follows the lead of others when it comes to CSR. After December's tsunami, for example, the company's recreation club took the lead in conducting fund raising activities for victims. 

"HR doesn't play a strong role but we support the activities of the organisation," says Aileen Tan, vice president of human resources at Abacus. "The recreation club usually has one HR representative, who will steer the club towards CSR activities. Also, it is explained very clearly to new employees what the organisation believes in, and that it is creating unmatched value for the community in which we live." On a more practical note, Tan says one challenge for a company in regard to CSR is deciding how far to go. She points out that businesses are registered as companies and not charitable organisations, suggesting that CSR-style fundraisers and such could actually fall beyond the legal remit of most companies. 

Future generations

Shell Companies in Singapore says its strategy is to generate profits while contributing to the well-being of the planet and its people. Its CSR focus is on sustainable development, which includes the three essential elements of sustainability - economic, social and environmental, and balancing long and short-term priorities. "In the process, the needs of the present generation are met without compromising the ability of future generations to meet their own needs," says John Chan, Shell's human resources general manager. 

Its CSR programmes include educational activities such as road safety programmes for kids, the teaching of entrepreneurial skills to Singapore's youth, and encouraging science in schools. The company says it also nurtures local artistic talents and promotes local interest in the arts through a long-term commitment to arts scholarships and community outreach programmes. As for its environmental projects, Shell (and most other major companies in the oil & gas sector) is extremely careful about how it conducts its business activities. Its Malampaya natural gas project in the Philippines, for example, won the United Nations sustainable development award in 2002. 

In regard to HR, however, Shell's CSR focus is very much internal. It gives staff the chance for personal development (in addition to profession-specific development opportunities)  that include a programme called the Self Development Learning fund, which allows staff to claim up to $300 per year for approved courses, and the chance to become involved with national charitable organisations that the company supports. It also has a managed internship programme designed to give young students useful work experience and an understanding of energy industry issues. 

The company's Employee Assistance Programme includes a telephone hotline counselling service to provide staff with an avenue for support and counselling assistance. The hotline is provided free of charge to employees and is manned by professionally trained counsellors. Discussions are kept confidential between the                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   counsellor and staff, and anonymous face-to-face session with the counsellors can be arranged.   

TNT Express is also committed to CSR. In December 2002, TNT Express's parent company and the United Nations World Food Programme (WFP) launched a partnership to help fight world hunger together. The company says it has committed time, money, people and express and logistics expertise across five key initiatives under its partnership with the UN WFP: Emergency Response, Joint Logistics Supply Chain, Private Sector Fundraising and the School Feeding Programme and Transparency & Accountability. More recently, over 200,000 participants across the globe participated in Walk the World, a walk organised annually by WFP and TNT to raise funds for UN WFP and increase awareness of global hunger.

Sally Tang, TNT Singapore's human resource director, says a key benefit on the human capital front is better motivation. "Through involvement, personal development and recognition of achievement, employee motivation is improved. This leads to higher morale, improved retention rates, reduced absenteeism, acceptance of change and identification with the organisation's goals beyond the confines of the job."

Tang says TNT's HR structure has been organised to support a focus on CSR. "HR's role is to facilitate and help people embrace and adopt CSR, ensure the right framework, policies and procedures are in place to support the overall corporate CSR goals and foster a supportive culture that allows people to accept diversity and respect individuals from different background, nationalities and races."  

She adds that the key challenge with CSR is that it lies with each employee. "With a clear vision, strong leadership, good people managers and effective communications, it is ensured that our employees understand the rationale behind the policies as well as their role in corporate social responsibility."

More could be done

CSR Asia's Welford, however, suggests HR departments could be more proactive on the internal CSR front, and notes a lot of HR departments seem to be unaware of the working practices at their companies. At one Hong Kong company CSR Asia researched, it discovered that people were staying late because they felt they couldn't leave before their bosses. When CSR Asia told senior management about this, they were extremely upset.  "They were completely unaware that lower level staff were at middle managers' beck and call." 

"A socially responsible company does not allow this kind of things to happen," he says. "A little bit of overtime at the end of the month when things have to get done is accepted practice, but in Hong Kong and Singapore, there's a culture of working long hours. The assumption that the longer you work the more productive you are is just wrong. One of HR's roles is about protecting your own staff and making sure they're not exploited." 

It is clear, then, that HR practitioners have a role in CSR, although the scope of this role will vary greatly between organisations, and such roles will only exist in organisations where CSR is driven by senior management. Nonetheless, increased shareholder and government scrutiny coupled with increased stakeholder activism all but guarantee that CSR's prevalence will grow. It is therefore incumbent on HR practitioners to determine what role they will play in their companies' quest for the greater good.

Box out

Five keys of CSR strategy

• - A coherent CSR strategy, based on integrity, sound values and a long-term approach, offers clear business benefits to companies and a positive contribution to the well-being of society.

• - A CSR strategy provides the opportunity to demonstrate the human face of business.

• - A strong CSR strategy requires engagement in open dialogue and constructive partnerships with government at various levels such as with IGOs (intergovernmental organisations), NGOs (non-governmental organisations) and local communities.

• - In implementing their CSR strategies, companies should recognise and respect local and cultural differences while maintaining high and consistent global standards and policies.

• - Companies should be responsive to local differences by taking specific initiatives.

Source: Adapted from Corporate Social Responsibility: Making Good Business by World Business Council for Sustainable Development, Jan 2000. www.wbcsd.org