Corporate Social Responsibility – Not Only Right Thing To Do, a Business Imperative
2018-01-24 | 8 min read
Corporate Social Responsibility (CSR) – also referred to as corporate citizenship or sustainability – has morphed from the right thing to do several years ago to a business imperative today, requiring detailed monitoring, reporting, and accountability to support various stakeholder requirements. This shift, and the ongoing global transformation, requires diligence to ensure corporate CSR strategies are aligned to industry progress in this area while supporting global communities and business commitments.
As an individual who grew up with, and continues to have, a strong sense of community and volunteerism across the socio-economic spectrum, I am thrilled with these developments in the business environment. And as a business leader, I have seen first-hand how social responsibility results in a multi-faceted win for communities, individuals and corporations alike. Just one example is the recent devastating wildfires in Santa Rosa, California where Keysight is headquartered.
Supported by our CEO, Ron Nersesian, executive staff, and existing CSR-related programs, Keysight was able to quickly offer affected employees emotional support through our employee assistance program, facilitate site emergency response, health and safety information, and provide funding of $1000 to displaced employees and $10,000 for those who lost homes to help in their personal recovery. Donations of clothing, necessities and funds from our global employee community were funneled to a Santa Rosa relief center we had set up to distribute them not only to Keysight employees and their extended families, but anyone in the local community that needed assistance. It was the right thing to do, we had the programs in place to support it, and I was proud to be a part of Keysight’s contribution. If you are interested in learning more about this, Keysight’s Brand Manager recently published details about the company’s response to the Tubbs fire crisis on another post.
As a CSR executive sponsor, however, I have experienced the challenges many corporations face to address the ever-evolving standards and industry guidance in this broad, cross-functional space. Instituting an effective CSR program model that supports the company and global community while ensuring it continues to meet today’s, and tomorrow’s, stakeholder requirements takes significant commitment to balance company resources, programs and obligations.
The Right Thing to Do is Now Required
For more than 75 years – as part of Hewlett-Packard, then Agilent, and now a separate company – Keysight has acknowledged its responsibility to help address global social and environmental challenges. Beyond just being the right thing to do, it is part of our company DNA going back to HP founders Bill Hewlett and Dave Packard.
Long before companies were required to monitor, track and report on such activities, Bill and Dave built a strong brand culture – referred to as “The HP Way” – that included company sponsored philanthropic, education, community and sustainability programs. They didn’t do this because they had to, they did it because they knew it made good business sense! In the words of Bill Hewlett, the HP Way “is a core ideology … which includes a deep respect for the individual, a dedication to affordable quality and reliability, a commitment to community responsibility, and a view that the company exists to make technical contributions for the advancement and welfare of humanity.”
Flash forward more than 75 years, and this core value continues in our company DNA today. However, the broader CSR landscape has changed dramatically. While the main tenets remain intact, supporting programs in this area are now business success imperatives. Here's why:
- I regularly review environmental, social and governance (ESG) industry ratings and reports to gauge Keysight’s effectiveness. Our investors are doing the same. As a Barclays report stated, “many responsible investors believe that ESG criteria are material to future business success and, ultimately, to financial performance.” ¹
- Customers need us, as their supplier, to help meet their own CSR commitments and growth strategies. According to Accenture, corporations work with suppliers “to turn supply chain sustainability into a driver of competitive advantage.” ²
- Beyond that, today’s highly desirable, skilled workforce wants to work for sustainable and ethical companies. The 2016 Cone Communications Millennial Employee Engagement Study noted that 76 percent of millennials consider a company’s social and environmental commitments when deciding where to work, and 64% won’t take a job if a company doesn’t have strong CSR values.³
Any corporation, Keysight included, cannot be successful without positive relationships with investors, customers and their workforce. Thus, the CSR space has become a business imperative that creates sustainable business value while driving competitive differentiation. Again, the recent Santa Rosa wildfire response is a great example.
From a business perspective, the unintended, but positive consequence of the company’s response was our employees recognizing that Keysight has, and will, support them and their communities in times of need. As a result, Keysight employees worldwide responded by doubling-down on their day-to-day jobs, and in some cases taking on more responsibility in the short term, to make sure the company recovered as quickly as possible and continued to meet customer and market commitments. Such events illustrate how critical CSR programs are to the success of local communities, employees and companies. It just makes business sense.
As with any business-critical program, periodical reviews, rightsizing and evolving of corporate CSR programs are necessary to navigate emerging industry standards and guidance in this space. At Keysight, we used our company formation as the impetus to embark on a 6-step journey through which our CSR program model evolves, as we align it with industry trends, and our new brand and business strategy. More on this journey in my upcoming posts.
1. Sustainable investing and bond returns, Barclays Report
2. Why a sustainable supply chain is good business, Accenture
3. 2016 Cone Communications Millennial Employee Engagement Study, Cone Communications