Corporate Social Responsibility (CSR) is the idea that a company should play a positive role in the community and consider the environmental and social impact of business decisions. But CSR is no longer just a buzzword; it is a fundamental aspect of modern-day business.
As consumers become increasingly aware of environmental and social issues, companies are expected to operate responsibly and make a positive impact on society. In recent years, CSR has attracted significant interest globally, with growing momentum for sustainability reporting in the private sector. However, despite this trend, New Zealand businesses have been found to be less proactive than Australian and Global 500 industries in communicating on climate science and CSR initiatives.
NZ lagging behind
The New Zealand government has recently adopted a framework to lower greenhouse gas emissions and increase climate resilience to support its commitments under the Paris Agreement. This has resulted in changes to the regulatory environment, leading to an increase in Environmental, Social, and Governance (ESG) reporting, with more companies using frameworks such as the Global Reporting Initiative, Integrated Reporting, and Taskforce for Climate-related Financial Disclosures (TCFD). This indicates that while NZ businesses are behind Australian and Global 500 industries, there is an increasing trend in the number of businesses reporting on CSR, ESG and sustainability initiatives.
This is good to see, and many NZ are agile enough to move fast to catch-up with the rest of the world. However, building a strong CSR strategy (or ESG or sustainability strategy or whatever you want to call it!) is no simple task. Without clear and issue-specific framing, CSR initiatives may appear insincere and risk being labeled as greenwashing. Measuring carbon is not enough. Nor are ad hoc initiatives unrelated to core business drivers. Businesses need a strategic approach that integrates CSR with overall business strategy, goals, and values.
What successful CSR strategy looks like
When looking at successful CSR strategies we know that one of the main drivers by businesses globally is to build brand reputation. The businesses that do this authentically and well align their CSR strategy with their company vision and values, engage and manage all company stakeholders, align with global reporting standards and scientific consensus, have clear and auditable reporting, and focus on open and transparent communications. It requires time, resource and effort. But the result is an impactful strategy influencing brand, culture and driving business performance.
As CSR becomes increasingly important, businesses that embrace it and operate responsibly can gain a competitive advantage while making a positive impact on society and the environment. With regulatory changes and increasing consumer demand for responsible business practices, it is essential for businesses to take a strategic approach to CSR to achieve long-term success.
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