Corporate social responsibility

Corporate social responsibility (CSR) is a growing phenomenon worldwide that’s trying to change the role and nature of corporations. CSR deals with the thorny issues around a corporation’s responsibility to society, and how it relates to the company’s traditional commitment to maximize shareholder profits.

By David Berger

The turn of the 21st century was marked by several major corporate scandals in North America.

Familiar company names such as Enron, Arthur Anderson, Global Crossing, Tyco and Worldcom regularly made headlines as the rest of us pondered what it must mean to the average person on the street. There was talk in media circles that the roots of the problems were poor governance, lack of business ethics, and the simple greed of a few executives who could wield a lot of power. But perhaps this oversimplifies and distorts the real issues. A bigger problem is determining the responsibility a given organization owes to its stakeholders, including customers and suppliers, shareholders and employees, government and the community.

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Corporate social responsibility (CSR) is a growing phenomenon worldwide that’s trying to change the role and nature of corporations. CSR deals with the thorny issues around a corporation’s responsibility to society, and how it relates to the company’s traditional commitment to maximize shareholder profits. Although CSR preceded the recent scandals, certainly the media attention surrounding corporate misbehavior accelerated development of CSR to unprecedented levels.

Organizations and industries of all sizes find it necessary and desirable to consider corporate social responsibility in strategic decision-making processes. In some companies, this has had a profound effect from the shop floor to the executive suite. Not surprisingly, the maintenance department has potential to be a leader in implementing initiatives that align with CSR-related goals and objectives, including improved safety on the job, waste reduction, improved energy management, selection of vendors that can supply “CSR approved” parts, increased employee diversity, alternative working arrangements, and balancing work and lifestyle.

CSR defined

So, what exactly is corporate social responsibility? Unfortunately, there’s no universal definition, although there are common threads. Several organizations carry a CSR body of knowledge, including best practices, case studies, and even the capability to conduct objective social audits. The following are sample definitions from three of the growing number of organizations that are well-respected proponents of CSR.

Corporate social responsibility is, according to the World Business Council for Sustainable Development (WBCSD), the commitment of business to contribute to sustainable economic development, working with employees, their families, the local community and society at large to improve their quality of life.

CSR is defined as operating a business in a manner that meets or exceeds the ethical, legal, commercial and public expectations that society has of business, says Business for Social Responsibility.

Corporate social responsibility is essentially a concept whereby companies decide voluntarily to contribute to a better society and a cleaner environment, is how it’s phrased in the European Green Paper “Promoting a European Framework for Corporate Social Responsibility.”

These rather general definitions leave it open for the maintenance department to interpret how best to make a contribution in light of a company’s desire to become more socially responsible. However, it’s important to note that most corporate executives still insist that social responsibility shouldn’t come at the expense of profits. Fortunately, CSR and profit drivers need not be mutually exclusive issues for maintenance or any other department. Nonetheless, the business case for “doing the right thing” from a CSR perspective can be elusive. This is because savings are expressed typically as long-term cost avoidance, as opposed to the usual short-term cost reductions most senior executives prefer. Consider the ways the maintenance departments around the globe are trying to make a difference in the area of corporate social responsibility.

Education

First and foremost in implementing a CSR program for the maintenance function is building awareness of CSR, explaining why it’s important and showing how individuals can contribute. There are several approaches to achieve this end.

Classroom and on-the-job training is one way to convert CSR to attitudinal and behavioral change on the shop floor. This might include learning tools such as visiting CSR-savvy companies, bringing in guest speakers, conducting training in classrooms and on the shop floor, and attending external courses and conferences.

Maintenance procedures can support the CSR program by addressing proper waste disposal, reworking repair procedures to minimize safety risks and making equipment adjustments to minimize environmental impact.

Regular communications can reinforce positive CSR results through regular supervisory meetings to review progress, distributing newsletter and reports that track savings and other benefits, and displaying motivational posters with supportive messages about the environment, energy management and safety.

Performance measurement and evaluation ties CSR to individual and team rewards. Input can come from using the CMMS to track CSR-related measures, finding incentives for technicians that translate education into action and instituting contests designed to promote a good safety record.

Capital planning

When it’s time to purchase capital equipment, facilities and infrastructure, a company with CSR in mind will scrutinize more than first cost and raw equipment performance. Instead, you’ll see a high importance placed on evaluating variables such as:

  • Material of construction (reusable, recyclable and renewable parts)
  • Environmental impact (emissions, disposability)
  • Employee health and safety (noise, odors)
  • Social benefits (community use of a facility)
  • Energy required to operate and maintain
  • Ability to minimize waste and scrap

Condition assessments

Not only can condition-based maintenance be a cost-effective way to manage your assets, it also can be used to monitor an asset’s CSR-related measures such as energy consumption and environmental impact. For example, mobile equipment can be monitored for unwanted emissions, which, in turn, can mean better efficiency and ultimately lower cost. This is an example where CSR is completely compatible with the profit motive.

Energy management

Even though companies have been working for years to reduce energy consumption, there’s still so much more to consider, including:

  • Renewable sources of energy (wind, solar)
  • Sourcing products nearby to avoid excessive travel
  • Incentives for employees to use public transit
  • Use of governors on vehicles
  • High-efficiency devices for lighting and heating
  • Process energy recycling or recapture

Waste management

Almost every time you reduce waste under the CSR banner, you’ll satisfy a cost-reduction objective, too. That is why waste management is one of the more tangible reasons for senior management to embrace a CSR program. Examples are reduced inventory levels, less scrap for setups and changeovers, and a PM program that ensures equipment is producing high-quality output.

Health and safety

One important outcome of a CSR program is a safer and healthier environment, and ultimately a better quality of life —— at work, in the home and in the community at large. With ever-increasing regulatory pressure forcing industry to protect the environment and improve workplace health and safety, it’s difficult for maintenance and other areas to build a profit-motivated business case. Some initiatives such as a lockout/tagout pay for themselves through direct cost reductions (lower lost-time injuries).
In other cases, initiatives are built on the assumption that you can’t put a price on values such as a clean environment or healthier community. Regardless of your company’s take on CSR at the corporate level, there’s still room for each and every maintenance department to make a difference.

E-mail Contributing Editor David Berger at david@wmc.on.ca