Innovation in CSR Will Give Rise to New Business Models: Leeora D. Black, Founder, Australian Centre for Corporate Social Responsibility

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By HARSHA MUKHERJEE  

Leeora D. Black, Ph.D, is founder and managing director of the Australian Centre for Corporate Social Responsibility (ACCSR). Leeora is a globally recognised CSR and sustainability expert and has more than 30 years experience in helping organisations adapt to their changing environments. A driving force in the field of corporate social responsibility in Australia, Leeora is known for her pioneering work on stakeholder engagement, as much as her ability to analyse and solve complex CSR and management issues.

leeora_blackIn a conversation  with IndiaCSR, Leeora D. Black  of Australian Centre for Corporate Social Responsibility (ACCSR) her shares his views on the current CSR trend and How CSR is growing in Australia. He feels that in one potential future, CSR remains a voluntary concept and therefore becomes more ‘explicit’. In this scenario, innovation in CSR will give rise to new business models that will prioritise the needs of non-shareholder stakeholders, such as indigenous communities or the homeless. Excerpts:

Brief history of CSR in Australia?

Over the last decade CSR in Australia has changed dramatically. From being a novel and poorly understood concept, CSR today is well established as a legitimate business agenda and strategy. CSR began to emerge as a concept in Australia in the 1990s, well after the United States and the United Kingdom. The increasing internationalisation of Australian business was a key factor in this emergence.

In  1999,  the Prime Minister, John Howard, became perhaps the first Australian Prime Minister to talk about corporate social responsibility in contemporary terms. He announced an incentive of package of tax measures to encourage corporate philanthropy and established the Prime Minister’s Community Business Partnership. The government’s approach to CSR at that time had more in common with American perspectives on CSR which placed discretionary social actions at the pinnacle of CSR achievement.

In 2007 ASX introduced new Guidelines of  ‘if not, why not’ approach to encourage reporting on corporate governance processes, but the coercive and normative isomorphic influences provided by the ASX ‘badge’ had proven a fast route to change in corporate Australia.

The next major milestone in the institutionalisation of CSR in Australia occurred when Labor came to power in the Federal election in late 2007. It abolished the Prime Minister’s Community Business Partnership and instead established a ‘Responsible Business Initiative’, with $2 million allocated through the Department of Treasury to the not-for-profit St James Ethics Centre to increase the social responsibility of business followed with subsequent rounds of funding to corporate engaging in CSR initiatives & GRI Focal point.

Presently, gentle coercive pressures are applied to business through a combination of tax changes, inquiries, corporate governance guidelines and funding for corporate responsibility initiatives. CSR has changed from a traditional conception of CSR as discretionary to being viewed as part of core business strategy, particularly to address business impacts on stakeholders. While I am not suggesting that CSR has yet ‘arrived’ as a fully-fledged and common business practice in Australia, institutional forces towards this end are clearly at work.

What are the most influential the frameworks, standards and organisations that have together, helped to institutionalise CSR as a business operating strategy and philosophy?

Principles and standards used for CSR in Australia are generally derived from United Nations initiatives and declarations though OECD Guidelines for Multinationals, is the only one that has any enforcement mechanism. Through the National Contact Point housed in the Department of Treasury in Canberra, the OECD Guidelines have been effectively used by civil society and government to encourage greater CSR in banks.

The biggest uptake of CSR principles however is the UN Principles for Responsible Investment, with 125 Australian asset owners, investment managers and professional advisors who have committed to investment practices that align with the broad interest of Australian society and the environment.

The take-up of CSR principles and standards has been matched by growth in the use of reporting and certification frameworks. The Global Reporting Initiative has reached a critical mass in Australia through the uptake of sustainability reporting practices among many large companies, Government support for the GRI and the advent of GRI-certified training in sustainability reporting. The UN Global Compact has also accelerated its reach with the establishment of an Australian Network. A greenhouse gas emission reporting has been spurred by Government regulation.

The UN mentions about dearth of CSR Professionals, how are the educational institutions in Australia working on to fill this gap?

Consulting organisations and universities have responded to the rising tide of CSR practice by creating new normative pressures of their own. Universities are shaping responsible business practice through introducing research and teaching centres such as the Asia Pacific Centre for Sustainable Business Enterprise at Griffith University, the Asia Pacific Social Impact Leadership Centre at Melbourne Business School, the Centre for Social Impact (University of NSW and others), the Centre for Social Responsibility in Mining at the University of Queensland, the Institute of Sustainable Futures at University of Technology Sydney and the National Centre for Sustainability at Swinburne University. Many more are offering innovative new courses in responsible business practices, such as La Trobe University, the University of Western Sydney, the University of Adelaide, and others.

What is the most dominant trait of CSR in Australia?

ACCSR conducts State of CSR in Australia Annual Review whose survey completed by people working in CSR, drawn from ACCSR’s database. A public report has been issued every year since 2007. Respondent numbers have varied each year, from 124 to 515; however it remains the largest ongoing study of CSR practices in Australia to date.

In the first State of CSR in Australia report (titled The CSR Manager in Australia, 2007) 73 percent of respondents said their organisations undertook stakeholder engagement as part of their CSR activities (up from 48 percent in a similar unpublished study completed in 2005).

The 2008 State of CSR in Australia study explored business outcomes of stakeholder engagement and found that stakeholder engagement was the CSR management capability contributing most strongly to improved organisational performance (others for example, being social accountability and ethical business behaviour). Stakeholder engagement was also the strongest contributor to specific outcomes such as improved reputation, and a secondary driver of reduced costs and reduced risks.

Stakeholder Engagement also ensures Social License to operate.  ACCSR had conducted Stakeholder Survey for the Upper Hunter Mining Dialogue (ACCSR, 2011). This study stands out due to its measurement of the social license of an industry, rather than a single organisation or project. To the knowledge of the project investigators, this was the first attempt anywhere to measure social licence at an industry, as opposed to organisational, level.

Hence we can say that Stakeholder Engagement is the pre dominant wire of CSR which influences the entire industry.

How do you see CSR growing in Australia?

In one potential future, CSR remains a voluntary concept and therefore becomes more ‘explicit’. In this scenario, innovation in CSR will give rise to new business models that will prioritise the needs of non-shareholder stakeholders, such as indigenous communities or the homeless. Innovations such as the use of social impact bonds (www.treasury.nsw.gov.au) and social enterprises such as Streat (www.streat.com.au) will become increasingly common-place. There will be greater take-up of reporting frameworks such as the Global Reporting Initiative and emergent forms of integrated reporting. More Australian organisations will use UN principles-based instruments such as the UNPRI and the UN Principles for Business and Human Rights. Companies will become more sophisticated in their use of corporate-community partnerships to drive both societal and business value. The CSR workforce will continue to grow and follow traditional pathways to professionalization through the emergence of certified educational pathways and a professional body.

About Leeora D. Black

Leeora D. Black, Ph.D, is founder and managing director of the Australian Centre for Corporate Social Responsibility (ACCSR). Leeora is a globally recognised CSR and sustainability expert and has more than 30 years experience in helping organisations adapt to their changing environments. A driving force in the field of corporate social responsibility in Australia, Leeora is known for her pioneering work on stakeholder engagement, as much as her ability to analyse and solve complex CSR and management issues.

Leeora works with senior managers and executive teams to create effective corporate and stakeholder strategies and build management capabilities. She is passionate about nurturing the development of the CSR profession and she works to transfer knowledge and skills to facilitate continuous improvement for clients and colleagues both during and after engagements. Leeora is highly sought-after as a speaker and facilitator of workshops and seminars on CSR and a widely-published author of books, articles and blogs. She is the author of The Social Licence to Operate: Your Management Framework for Complex Times, Do Sustainability Publishers, Oxford, 2013.

Leeora is responsible for all aspects of ACCSR’s direction, strategy and services. With a background in journalism, corporate communications and advisory, Leeora undertook her doctorate in corporate social responsibility through the Department of Management at Monash University before establishing ACCSR in 2003. Her doctoral research pioneered new methods of CSR measurement, and established her reputation for application of rigorous social sciences research methods to the traditionally ‘soft’ areas of organisation-stakeholder relationship management. Her experience spans the mining, oil and gas industries, banking, insurance and superannuation, FMCG, agribusiness, retail and consumer brands, utilities, telecommunications, renewable energy, property, automotive, transport, and government sectors.

Leeora is a Board Member of the Karma Currency Foundation, a member of the Advisory Council on Corporate Responsibility at National Australia Bank, and a member of the External Advisory Board of La Trobe Business School. Her vision is for corporate social responsibility to become integrated into business as normal operating procedure.

(Harsha Mukherjee is an editorial board member at IndiaCSR.in)

Harsha Mukherjee

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