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John Spizzirri recently interviewed Nick Andrews, manageing director of CSE North America, in Chicago, Ill., for the CSBA’s Featured Member Profile.
Can any company, no matter what product or service they provide, practice sustainability and corporate social responsibility (CSR) simultaneously?
I would say that every company can be sustainable—how can we do what we’re doing currently while taking into account the environment and the community around us? Can we continue to operate forever without creating a negative impact on those things?
Corporate social responsibility is a little different because it’s linked more toward business ethics. You’re claiming that you’re taking a responsible approach to everything you’re doing, which is affected not only by external factors, like the environment, but by internal practices, such as labor, human rights and corruption. There are grey areas, obviously, when industries like tobacco and fire arms make claims for corporate responsibility that can easily be refuted.
To what degree does the U.N. Global Compact influence your business? And while it fits well in the backdrop of specific international issues, i.e., child labor and human rights, is it just as applicable in the U.S.?
CSE is a signer to the U.N. Global Compact and publishes a sustainability report with them each year. The 10 principles that it sets forth represent a global blueprint for corporate responsibility and sustainability. It’s based in part on international treaties, labor treaties and environmental agreements. So when an organization is looking to identify what they need to do and how they need to apply CSR to their company, the most effective first step is to look at the U.N. Global Compact.
It’s also one of the most popular frameworks that we use to assess our clients against, along with the Global Reporting Initiative (GRI).
So does it apply to the U.S.? I would say yes, because so many North American companies are multinational. They use supply chains that might extend into Asia or South America, which might have labor issues tied to them. So they would need to apply the U.N. Global Compact to the way their business operates.
Are European businesses ahead of the U.S. in terms of CSR or is that changing? Do you approach U.S. companies with strategies different from those you would utilize with European companies?
Europe is definitely ahead of the U.S. in its application of CSR by about five to seven years. But the gap is beginning to close because of the financial crisis. Organizations and their brands are under increased pressure by stakeholders to make an accounting of their triple bottom line activities and how they are earning their license to operate in the global society.
European companies are operating with corporate responsibility principles built into their regulations and a greater awareness of the role that they must play in the environment, specifically, when it comes to greenhouse gases. It is also more accepted that a company has a responsibility to society or in the community.
In the United States, we think twice about what our role really is in the community or with the environment. I want to say that CSR is a tougher sell in the U.S. The argument against CSR is that the main function of business is to maximize profit for the shareholders. But capitalism is taking a new direction here, it’s kind of morphing. Companies really are beginning to consider what their role is and how they’re going to grow their core business while applying CSR.
The difference in strategy between Europe and the U.S. depends on the particular CSR models that are more prevalent in various regions. EFQM has been the predominant model in Europe, while the U.S. has used the Malcolm Baldrige model.
So the U.S. is beginning to understand that capitalism can go hand-in-hand with corporate social responsibility?
As long as they see a return. Money applied to CSR is considered capital, so it needs to work and come back in some positive way. If not applied effectively or correctly, there can be a negative impact on financial returns or productivity or customer loyalty. So you can see why a company would be a little hesitant to make these investments or take these initiatives.
Five or 10 years ago, CSR was basically a concept to be sold as a marketing campaign and the United States maximized and applied really well the whole message of corporate responsibility and sustainability to increase brand value and customer loyalty.
But what we’re starting to see now is a shift in the application of these concepts and theories from marketing to actual strategy, affecting the way a company will create a product or service and take it to market.
On CSE’s site, under Green and Social Cause Marketing, it reads, “Consumers, a primary stakeholder group of organizations, are becoming increasingly more aware of social and environmental issues, thus they are willing to reward companies who correlate their products, services and operations to a social cause.”
Can you provide an example of a success you had in this area with a client?
A client of ours, GAEA, a Mediterranean olive oil producer, was concerned about the impact of their product on the environment. Through a carbon footprint study over the product’s life cycle, CSE identified the main environmental impacts and developed a strategy for GAEA to reduce its carbon emissions by almost half. The remaining emissions are neutralized through carbon offsets, through our European partner, MyClimate.
GAEA transformed the production of its olive oil by using organic methods that emit no additional carbon into the atmosphere. They are the first olive oil company to sell a carbon neutral product. We were able to promote that and feature GAEA at the dinner gala before the Academy Awards ceremony in 2009. It was served to all the guests and all the Oscar winners received a gift basket with a bottle of the olive oil in it.
The point is, you can make more environmentally conscious products and, at the end of the day, you can also make it more lucrative for your company by getting recognition for that achievement.
Given the current economic environment, are companies cutting back on the services they seek from you? If so, do you see a pattern in what people need or don’t want?
The short answer is yes. A lot of clients have seen their budgets really dwindle for these kinds of projects. CSE has seen some cutbacks in spending by our clients, and maybe more changes in the way they spend their money. For example, we have clients who have decided to measure their own carbon footprint internally, but have asked CSE to verify that the calculations are correct; verification being a smaller project than measuring the whole footprint.
Our CSE operations in Europe have bounced back a lot faster than here in the U.S., just because the regulatory system is in place and still has pressure on business there.
If a company with limited funds were to ask which one or two areas of service to start with, what would you recommend—CSR management and reporting, green and social cause marketing, performance, etc.—and why?
I would recommend that they begin with our package on the fundamentals of sustainability, an in-house training workshop that teaches the client how to apply basic principles to create their own unique sustainability strategy that can be aligned with the overall core business strategy. The package also provides an assessment of company operations against international frameworks, which is very useful when determining opportunities or potential risks.
I think it’s the wise thing to do, especially now, before companies really start to integrate these concepts, creating competitive pressure in the marketplace.
CSE has also co-developed a certified training workshop with the Institute of Environmental Management and Assessment (IEMA), a not-for-profit agency that provides accreditation for environmental managers. We launched this workshop last September in Chicago and it blew away our record in Europe for the number of participants. We’re going to host that training session again in Chicago on March 25 and 26, 2010.
John Spizzirri is a freelance writer and editor in Chicago. He has written on a variety of environmental issues, from greenhouse gases and brownfields to elephant sanctuaries and spider conservation. John can be reached at editor@chicagospeaks.com.
