Corporate Social Responsibility Trends impacting business in 2021

April 20th, 2021 5:01:00 PM

In many ways, 2021 started with a sense of optimism and anticipation of change. The businesses most prepared to adapt to change are those with strong Corporate Social Responsibility (CSR) management strategies. This is why the following CSR trends can’t be ignored. 

The dominant trend shaping the CSR industry is growth. In 2017, 85% of companies listed in S&P published sustainability reports, according to Deloitte. A KPMG report shows that as of 2020, 90% of companies in North America are reporting their sustainability and 96% of G250 companies are publishing reports.  

Software remains one of the most important tools to help organisations adapt to rising needs within the industry: transparency through standardized reporting, tracking and monitoring employee engagement activities, and linking SDGs to organisational activities. 

Author of the recently released book “Collaboration is where IT’s at” and founder of Collaboration Nation, Danielle James points out that “corporate social responsibility and sustainability (CSR&S) efforts are a reflection of society’s desire for private entities to view themselves as part of rather than separate to the communities in which they operate.” 

Communities want private organisations to support the shared aims of the UN Sustainable Development Goals (SDGs) from reducing poverty to improving gender equality: “The sustainability software market is growing rapidly in response to these macro trends, providing technology platforms and SaaS applications to automate the processes, data and reporting activities within corporations. Such software is part of companies’ overall digital transformation journeys and is delivering multiple benefits to them, such as:

      • greater efficiency 
      • improved reporting 
      • easier compliance 
      • risk reduction 
      • better customer and community relations 
      • improved transparency 
      • enhanced trust 
      • greater cost savings" 

Having the tools to report and communicate organisational activities is one thing, but building a strong CSR management strategy to tap into these benefits depends on strategic planning: a key feature of our Staarsoft® Sustainability Software.

The Rise of CSR Tech

The environmental, health and safety (EHS) software sector, which includes sustainability software, has grown to become a $1.35 billion dollar market, according to a new report by Verdantix

EHS software growth mirrors changes across the IT industry. In “Collaboration is where IT’s at,” James writes: “We reside in the age of ‘best of breed’ IT products. This means multitudes of IT product vendors with highly niche products are now participating in the marketplace, which has exploded like a new galaxy of stars over the last three decades.”

Within the EHS category, the Verdantix study shows that regulatory compliance and integrated risk management are among the most popular software investments for organisations. The sectors spending the most on software are the energy, chemicals, basic resources, manufacturing, construction, pharmaceuticals, life sciences, and food and beverage industries. Going beyond mere health and safety solutions, the report points out that today’s most sought after EHS software offers enterprise-scale training and support.  

Accenture calls this growth the “Twin Transformation,” referring to the intersection between digital technology and sustainability in a recent global research report. According to its report, “the companies leveraging the combination of sustainability and technology are 2.5x more likely to be among tomorrow’s strongest-performing businesses than others.”  

Staarsoft® Sustainability Software fills a unique gap in the EHS software market. Not only does it provide subject matter expertise within the SaaS platform, it satisfies a diverse set of sustainability management needs: performance and project management, collaboration and communications systems, and ESG reporting.    

Change Management

Unprecedented situations in 2020 gave most businesses the opportunity to see how change creates the need for periodic reevaluation of a company’s purpose. Transitions cause organisations to identify the core pillars of purpose that ground their activities. 

Specifically, organisations are pinpointing what CSR means both internally and within their sectors. By revisiting areas that require greater management, organisations can stumble upon unforeseen opportunities--“that next big thing.”  

The Liquor Control Board of Ontario (LCBO) recently reported how Ontario winemakers, for instance, responded quickly to shifting customer behaviors. Wineries started offering curbside pickups and developing larger boxed wine formats as customers began to take fewer trips to supermarkets. 

LCBO highlighted how changing circumstances brought home the shared value among its stakeholders of supporting local Ontario wineries, which pride themselves on sustainable viticulture. This is why Ontario’s Craft Wineries’ Sustainable Winemaking Certification is so important--it provides a forum for local wineries to demonstrate their commitment to responsible winemaking. 

For the IT sector, Danielle James notes how an organization’s attention should extend beyond immediate attention on the product: “Non-product project skills such as change management, complex stakeholder management and value identification increase the chances of an IT project’s success. When combined in the right way and with the right intentions, these ingredients increase customer satisfaction, much like the right combination of ingredients makes a cake rise.” 

Shifting to new or revisiting existing practices, policies and technologies within an organisation requires good communication and responsiveness to stakeholder needs. Having a clear system and programs in place for reviewing stakeholders’ needs ensures a smooth transition. It can remove a lot of the discomfort and uncertainty of a less dynamic system. 

Staarsoft® Software gives organisations a framework to periodically review environmental impacts, operating practices, products and services, and community development and support. In addition to supporting organisations with benchmarking their activities in these areas, it provides means to prioritize diverse responses to change. 

Transparency

Beyond the demand from customers for sustainability disclosure, financial regulatory institutions are calling for increasingly precise and standardized ESG data and clear policies regarding sustainability disclosure. Here is some of the most important activity underway: 

      • The EU’s Sustainable Finance Disclosure Regulation (SFDR) which goes into effect on March 10, 2021, requires increased standardization in reporting.  
      • The World Economic Forum defined 21 core metrics in a paper outlining common metrics for sustainability reporting standards.  
      • The IFRS Foundation is consulting with organizations to establish a worldwide non-financial reporting framework.  
      • The US Securities Exchange Commission (SEC) is also reviewing its policies on ESG-related disclosures 

Beyond alignment with standards, it’s important to embed transparency throughout an organisation as a sustainable management principle. With organisations increasingly engaged in the social fabric of people’s lives through campaigns and social media, it’s important to make clear and purpose-aligned statements to manage an organisation’s reputation. 

Going further, transparency is the bedrock of strong partnerships. For Danielle James, strategic partnerships need to be grounded in trust. “In my book, I have identified 12 cultural factors that contribute to successful strategic alliances and they all apply to achieving successful internal and external collaborations too. One of these factors is transparency and on this topic, I contend that:

      • Without trust there is no partnership 
      • Without transparency, there is no trust 
      • Transparency provides clarity about the parties’ motivations and a shortcut to identifying areas of mutual value 
      • Transparency saves time 
      • If there are ‘stop/go’ decisions to be made, openly divulging what is known helps to shortlist opportunities and efficiently highlight potential challenges 
      • Some of the most valuable meetings are the ones involving the courage to tell it how it is and also the courage to say ‘no’ without that being misconstrued as being negative" 

Involving Employees in CSR

As people are transitioning to remote working environments, their personal and private lives are less compartmentalized, and making the transition can feel incredibly disruptive. Employees seek meaningful work and workplaces that respond to their changing needs. According to a 2016 Cone Communications Study

      • 74% of employees are more fulfilled when they know their work makes a positive impact. 
      • About half of employees won’t work for companies without strong social and environmental commitments. 

Thoroughly embedding CSR in the workplace means engaging employees in the core purpose and long-term vision of the company. According to a Forbes study, CSR shapes 42% of the perception individuals have about a company. A positive employee experience helps organisations recruit and retain talent while building stronger work communities and social networks. 

Here’s what involving employees can look like within a well managed CSR program. The organisation routinely assesses employee priorities and involves them in the development of policies and procedures. The organisation builds a sustainability “culture” within the organisation by developing and implementing action plans. CSR communication and organisation-wide reporting circulates both internally and externally.  

Addressing SDGs

While the UN Sustainable Development Goals (SDGs) are always important, they’re trending in CSR because of how they continue to grow in importance. The unique circumstances of 2020 revealed significant vulnerabilities across the 13 of the 17 SDGs from poverty to food security, according to a report by the Sustainable Development Solutions Network (SDSN)

SDGs remain strong guideposts for organisations to focus on, especially as the world starts to build back better. However, each sector faces unique challenges and opportunities for working towards the SDGs. Analyzing and identifying how your organisation and sector can contribute to the SDGs requires strategic planning. 

Staarsoft® Software helps organisations find and enhance the links to SDGs within all aspects of your organisational structure: Operating Practices, Products and Services, Environment, and Community.  For instance, here are a variety of approaches to community engagement that can have an enormous impact.  

For each of these CSR trends, a management strategy is key to successfully tracking, monitoring  and reporting on organizational progress. Staarsoft® sustainability software offers a comprehensive approach for organisations to identify existing sustainability metrics and opportunities, implement sustainability initiatives, and review their efficacy. Having a framework that not only aligns with CSR reporting standards but also guides management on steps for implementing change is necessary for 2021 and beyond. 

Contact us for more information on our sustainability approach, our consulting process, or for a demo of our Staarsoft® software.                  


      By: Erica Eller, Content Writer