In today's global market, corporate social responsibility (CSR) programs have become more than a buzzword. But how to get started with your own CSR program can be a daunting challenge. Here's some insight from experts, compiled by Stacy Baker.

With nearly all of the world's top brands sourcing from numerous factories throughout the world - many of which they don't own but need to take responsibility for - how they operate within communities socially, economically and environmentally is becoming more a key factor in their success.

Companies doing it well - Timberland and Gap, for example - are proving that a corporate mindset towards social accountability can be an unwavering commitment throughout a company without threatening the bottom line.

But how to get started with your own CSR program can be a daunting challenge. Here's some insight from experts.

"There is no one way for apparel companies to approach ensuring their products are ethically produced. Every company must consider how best they can impact workplace and labour standards," Dan Henkle, vice president of global compliance at Gap Inc.

He agrees that the most important thing you need to do is to ensure a company-wide commitment from top to bottom. This laid the foundation for Gap to develop a comprehensive programme to improve the lives of garment workers by monitoring factories and raising labour standards.

"We started with a strong foundation - our Code of Vendor Conduct - which is based on internationally accepted labour standards and clearly states that factories must comply with local labour laws and regulations if they want our business.

"It spells out our expectations regarding working conditions and environment, wages, child labour, health and safety issues, respecting the right of workers to unionise and more.

"We use words like 'shall' and 'must' because we want vendors to take the code seriously and understand that keeping our business depends on how they run their factories."

Not only should everyone from the boards of directors down have buy-in but they should also realise that it is "not a bolt-on extra, but is actually a recognition of the social relations that the corporation is involved in whether it acknowledges it or not," explains Vic Thorpe, coordinator of Just Solutions Network in Switzerland.

"If it does not both acknowledge and manage its widening social responsibilities, the company will be judged lacking in social relevance and empathy by its various stakeholders. That will reflect upon its performance and upon its central purpose of dynasty building. If it seeks to understand what its social responsibilities are and how it might manage them, the effect can only be beneficial."

Beyond this, you need to be open to advice from stakeholders and objective third parties, as well as partners, recommends Celina Adams, community investment manager for Timberland.

This can include everyone from auditors to NGOs to local unions - anyone that can affect or be affected by your company and how it does business.

"Bad news does not travel upwards in the corporate hierarchy, Thorpe says. "An informed top management needs an alternative information system that will push criticism towards key decision-makers."

He also recommends then constructing a "baseline" so you can measure where you are currently versus where you want to be, which can help you prioritise decisions and changes in the future.

Timberland, for example, has a CSR department staffed with five full-time people who are dedicated to ensuring that the company is integrating its social commitment into the company's daily business endeavours.

"You have to be willing to listen to all community members and stakeholders," Adams says. "Make sure you are in touch with employees and engaged in what's important to communities where live and work and up to date in monitoring all of the factories. You have to be very vigilant and have good community partners."

Factory monitoring
On any given day Gap's vendor compliance officers (VCO) are spending time in factories worldwide, conducting health and safety evaluations, reviewing payroll records and other documentation, monitoring conditions, and interviewing workers Henkle says.

"We have also found that third-party independent monitors complement our own monitoring efforts in parts of Central America and Africa," he explains. "Independent monitors are respected members of the local community and enjoy credibility among factory workers. While factory monitoring is an important part of our programme, we know that it isn't enough to support sustainable change."

The company is also working with a variety of other organisations, including non-governmental organisations, multi-stakeholder groups such as SAI and ETI, labour unions, government agencies and other companies.

"We have found that a commitment to transparency has enhanced our overall programme, as has our genuine interest in learning how we can improve over time."

Moving forward
So now you've got the buy in and are ready to move forward. What are some common pitfalls you'll likely face?

Thorpe says to beware of addressing the wrong issues, such as those the board of directors thinks are important versus those your stakeholders have identified.

Another problem is viewing this as a marketing or public relations initiative, rather than a company culture, as with apparel brands like Timberland and Gap. Or keeping CSR as long as it doesn't hurt the bottom line.

"Business functions on strategy and the same is true for CSR and you have to be driving against it," says Adams. "That consistency helps. You're not doing it because it's the soup du jour. You're doing it because it matters and is integrated from head to toe in the way you operate. In the minds of stakeholders, it is part and parcel of who you are."

Finally, Thorpe says to avoid wasting money on "policing audits" that won't tell you much. Instead, spend your resources on "progressive auditing" which allows you to really dig into the issues from the beginning so you're dealing with reality. Then work with suppliers step by step toward what he says is a goal of "social quality."

"Perhaps ironically, the companies commonly acknowledged to be the furthest along the path of sensitivity to their stakeholders are those that have often been on the receiving end of the harshest criticism from activist and trade union groups in the past," he says.

"GAP and Nike, for example, have made enormous efforts in this area and remain at the forefront of the effort to tackle their social relations by increasing their transparency and extending their interactions.

"This commitment is reflected in structural change inside the companies and in actual dollars budgeted. Responsibility does not come cheap; but ignoring it comes damned expensive!"

Key steps to creating a management program

  • Know where you are coming from (Baseline Study of Stakeholder Perceptions);
  • Dialogue with your Stakeholders (Stakeholder forums provide a managed, 'safe' environment within which managers can meet their constituents and critics; results of such interactions can reveal options for future planning);
  • Don't forget your Internal Stakeholders (your own people have a rather specially informed view; give them the freedom to express it - if there is no collective framework in which they feel confident to do this, then one needs to be created);
  • Decide how you want your company to affect the world around you (top management needs to build a team that will draw up the basic policy elements for the future management of social relations);
  • Drive the process of constant improvement (develop a common mind-set for CSR in the management team; staff training; supply chain monitoring, training and review; feedback to stakeholders);
  • Report on what you have done and what effects it has had - CREDIBILITY demands both the good news AND the bad!
  • Learn from mistakes and successes and repeat the process...
  • In this process, there is no need to re-invent the wheel. Such programmes as the SA8000 and ETI have proven effectiveness in leading progressive change in this sector.

Source: Vic Thorpe, Just Solutions Network

By Stacy Baker.