CSR activity is often driven by company size

This September, five years after the official launch of a revised version of the OECD’s Guidelines for Multinational Enterprises, 39 governments reaffirmed their commitment to making the guidelines an important tool for promoting corporate social responsibility.

The Organisation for Economic Co-operation and Development (OECD) is a forum through which member democratic governments address economic, social, and governance challenges of globalisation. The OECD’s Guidelines provide voluntary recommendations for international business on ethical behaviour in areas like human rights, responsible supply chain management, labour relations, the environment, consumer protection, and the fight against corruption.

Although OECD activity is at the government level, the organisation’s renewed commitment with regard to corporate social responsibility suggests that companies operating in member countries will also take a closer look at day-to-day practices and explore opportunities for additional CSR initiatives.

Impact on HR

For many organisations, CSR is not a new topic. Throughout Shell’s history, corporate social responsibility has been at the forefront, says Johan Siebers, group HR communications manager for Shell International.

“It is one of the essential processes you must have in place,” he tells Expatica. The energy and petrochemical giant focuses heavily on CSR. Shell details its commitment to the environment and the communities in which it operates at its web site. Specific examples can be found under a heading called ‘Case Studies’ that can be accessed via the company’s home page by first selecting ‘Environment and Society.’

From an HR standpoint, Shell’s emphasis on CSR has particular significance. CSR has a people dimension, says Siebers, and it therefore impacts senior human resource executives.

Indicating that the idea of sustainable development is at the heart of CSR, Siebers explains that Shell breaks the concept into three pillars:

* economic sustainability, known as profit;
* environmental sustainability and natural energy that focuses on the planet; and
* social sustainability, which encompasses people.

The people factor

The third “p” is where HR comes into play. People stand for a wide range of individuals, Siebers notes.

There’s the role of Shell, or any company for that matter, as a corporate citizen. This includes what a company contributes to society in terms of product and economic assets.

CSR has a people dimension, and it therefore impacts senior human resource executives.
Likewise, there is a relationship to stakeholders, and what Siebers calls an ‘external-looking dimension.’

He points out there is also an ‘internal-looking dimension.’

“People in the community are also the people who work for Shell,” he explains.

Shell operates with a set of standards and values that focus on people, Siebers tells Expatica. “We’ve got a diversity and inclusiveness practice which is very well developed,” he says, and he cites behavioural values as well.

“All these things have to do with sustainability,” Siebers says.

Evolution of CSR

Siebers tells Expatica that years ago corporate social responsibility took the form of philanthropy. Recently, however, companies have tried to create a closer link between their own operations and CSR.

At Shell, the link is an important component. “There is a thing in Shell which we call social performance,” Siebers says.

The company looks at the entire ‘social footprint’ of its operations. If it has a factory in a city, it looks at every aspect of that factory, including business issues and the link to social issues. Social issues focus on community and people issues, Siebers says. For example, the company will meet with local government to discuss matters related to employment.

HR’s role

Shell also tries to get a mindset in managers to enable them to look at problems in the context of wider social issues, Siebers says. The objective is to link solutions to social problems.

“It is an area of activity and ‘manager thinking’ that is under development,” he tells Expatica.

“And HR plays a role in that. There is a lot of opportunity for HR and for HR to contribute to that.”

Large organisations versus smaller companies

Nevertheless, HR’s role depends on its organisation’s involvement, and CSR activity is often driven by company size.

“It’s an initiative that’s been taken by the government and in government companies. When I see it in private companies, it’s mainly in very big companies,” says Nick Vanderplancke, international human resources director for Kinepolis Group, a cinema company based in Belgium that operates in five countries.

“In my own company, it’s on a low, low level at the moment.”

At Kinepolis, the focus is largely financial, Vanderplancke says. However, the company does have policies regarding interaction with shareholders and employees that emphasise social responsibility. Vanderplancke gives the example of how, when firing people, attention is given to approach. “You try to do it in a ‘soft’ way,” he says.

Companies have tried to create a closer link between their own operations and CSR.
The company also sponsors activities related to social issues. HR isn’t directly involved with these activities, however; each theatre manager controls a budget. From the corporate side, Kinepolis provides financial support to the Olympic Federation, and its CEO is a member of the board.

Vanderplancke tells Expatica that although in the last two years there’s been a lot of thinking around CSR, he doesn’t really see the impact in Kinepolis, or in many companies in Belgium.

“A lot of private companies in Belgium are doing social sponsoring. But in a lot of other countries and companies it’s a lot more than sponsoring,” he says.

According to Vanderplancke, there is an opportunity to raise the bar when it comes to corporate social responsibility.

“From my view as an HR person, and even as a human, we have to do a lot more. They’re thinking they’re donating a lot of money. I think we have to put it on a higher level,” he says.

Still, integrating CSR into the fabric of an organisation isn’t without challenges. “It’s rather difficult when everyone is working on economic activity,” Vanderplancke says.

October 2005

Paula Santonocito is a freelance writer specialising in workforce management issues. She is the author of more than 500 articles on a wide range of topics.

Reprinted with the permission of Expatica HR (www.expatica.com/hr).