Several CSR Companies that Have Seen Their ROIs Climb - Case Study Example

 These CSR companies have seen their ROI’s climb Most senior managers are trained to ensure that any project should ensure ROI as their first responsibility is to ensure the returns on investment for the shareholders. However, sustainability practitioners believe that retraining employees, conserving energy, reducing waste and undertaking other projects with great social outcomes can enhance the ROIs but this claim is refuted by the CEOs. Nevertheless, several companies reported here have seen their ROIS climb. A bank Eurobank EFG is a banking organization with employee strength of 24,000 people across 1700 branches. They have been granted the corporate social responsibility award for “COMPANIES AND BUSINESSMEN WHO MARKED 2008”.They focus on various areas but the emphasis is on health and environmental protection. They no more throw away unwanted paper. The bank upholds the highest standards of business conduct and through its CSR initiatives, has been able to see it ROI climb which manifests in reduced customer complaints and reduced time in handling the complaints. The bank conducts its CSR initiatives in co-operation with the local self-government like ministries, NGOs and distinguished charities. Eurobank EFG has registered certain advantages from its CSR initiatives. On the social front positive changes in the lives of the people of the communities they work with are evident. On the economic front they have been able to incentivize the employees and the clients and build relationship with all the stakeholders. They have also been able to build strong corporate reputation. The development at this bank is based on strong principles and values such as meritocracy, teamwork, quality, trust, efficiency, creativity and respect. Because of their CSR approach the number of complaints received in 2010 has declined considerably as per chart below: A Hotel/restaurant In its CSR initiatives, Starbucks Coffee works within multiple areas like recycling & reducing waste, energy conservation, water conservation, building greener stores, tackling climate change. Through this strategy they have been able to maximize shareholder value while enhancing their ROI as well. They have minimized the negative environmental impact of growing coffee. Employees are paid higher than the market average and they engage in Fair Trade policies. As a part of its supply chain strategy, Starbucks pays a minimum of $1.26 per pound for Fair Trade ingredients such as non-organic green Arabian Coffee. Their social ROI can be seen in the development project CARE International started in Ethiopia which aims to provide the farmers and their families with better food, safe drinking water and better health conditions. Through this project they also build community warehouse facilities, a haricot bean loan scheme and vegetable seed bank. A food company Morrisons is the UK’s fourth largest food retailer having 368 stores and 10.5m square feet of retail space. They are committed to taking care environmentally, socially and in business. Driven by strong principles of quality, value and integrity, their vision is to be the “food specialist for everyone”. In the field of environment they help protect and nurture the valuable resources on which we all depend thereby creating more efficient and effective business environment as they also recognize the need for more sustainable products and services. In combating climate change they involve the customers and the suppliers and through positive engagement they have been able to enhance their ROI. To review progress and plan for future they have clearly defined key performance indicators in their CSR approach. The table below is evidence of their enhanced performance based on the CSR strategy.   2009 2010 Comments Employee Engagement Score 55% 64% Calculated from the annual employee survey results.  All employees are provided with the opportunity to complete a survey manually or online. Morrison Acts Responsibly 62% 75% Calculated from the annual employee survey, where all employees have the opportunity to rate our performance. Employee Satisfaction of Health and Safety 79% 86% Calculated by the annual employee survey, where all employees (frontline and office based) have the opportunity to rate our performance. Annual Accident Frequency Rating 0.34 0.25 Calculated from total number of accidents divided by total number of hours worked multiplied by 100,000 Employee Rating of Customer Importance 85% 90% Calculated from the annual employee survey, where all employees have the opportunity to rate our performance. Number of Customer Relationships 39 54 Number of customer relationships shows the number of contracts Morrison has with Local Authorities, ALMOs, RSLs and/or private companies. Customer Satisfaction Measurement 95.71% 96.73% Calculated from customer satisfaction surveys completed by our customers. CO2 Emissions 26,500 24,300 CO2 Emissions are calculated using our environmental reporting form, which collects all contracts data on waste and utilities. Community Hours 10,933 93,276 Total community hours are calculated by the number of hours our employees participate in community activities. A utility company Genesis Renewable Energy finds that its environmental and social performance positively impacts is competitiveness and social performance. All businesses make some form of environmental impact although the degree may vary. The companies can also make a social impact through engagement in different activities. Companies have started moving towards sustainable CSR as they recognize that best business practices and corporate performance are measured with CSR initiatives as key components. Genesis has seen its ROI climb along with their brand image being higher. An automotive company Ford Motor Company recognizes how treating people with dignity and respect holds a fundamental place in how it conducts business across the world. They introduced sustainability throughout is $90bn supply chain. The suppliers are expected to ensure that regardless of where the products are manufactured, they follow the highest standards and demonstrate respect for the people who make them. They consider this to be as important as “quality, cost-competitiveness or timeliness of delivery”. They have been able to actively engage the suppliers through a three-phase approach – training and capability building, supplier ownership at the corporate level, and collaboration on global supply chain working conditions through the Automotive Industry Action Group (AIAG). Ford recognizes that such a strategy results in recognition and rewards but more importantly they have been able to enhance their ROI. Business leaders recognize that they have far greater responsibility towards other stakeholders than to the investors who seek immediate profit returns. At Ford too, the CEO believes that people should come absolutely first, then products and then profits. References http://www.morrisons.co.uk/Documents/Corporate_Social_Res.pdf http://www.morrisonplc.com/content_delivery/view/443 http://www.eurobankefg.rs/upload/documents/o_banci/fin_izvestaji/CSR_ENG2010.pdf http://info.worldbank.org/etools/antic/docs/Resources/Sectors/Retail%20Leisure/WTC%20corporatesocialleadership.pdf http://www.businessweek.com/adsections/2008/pdf/CSR_Section.pdf http://www.corostrandberg.com/pdfs/Business_Case_for_Sustainability_21.pdf http://www.genesisre.com/roi-and-corporate-social-responsibility.html Read More