Compliance vs. True Corporate Social Responsibility

NativeEnergy and MS&L recently hosted Sustainability Leaders Roundtable in Chicago. Tom Rawls, our VP of Sales & Marketing, was a panelist at the event. Here are his thoughts about the difference between compliance and true corporate social responsibility:

What differentiates companies that follow compliance requirements from companies that value true corporate responsibility?

Don’t we expect companies to follow the rules? Whether a regulation has environmental benefits or not, obeying laws is just basic citizenship. We don’t commend people for stopping at red lights, for instance. To be truly socially responsible, companies go above and beyond.

Corporate social responsibility falls under two categories: external and internal. External activities involve donating to and working with organizations that “do good”—for example, having employees dedicate company time to volunteering at a non-profit. Internal activities involve the company’s actual processes and devising ways to make them more environmentally and socially conscientious. Many businesses that we’ve worked with at NativeEnergy are interested in doing their day-to-day business better. For instance, the fabric manufacturer Designtex just switched all of their lighting to highly efficient LED bulbs. Such changes aren’t regulated or required; these companies go beyond mere compliance because there is value in “doing things that matter.” That, in my mind, is true corporate responsibility.

What has been your experience with companies that take a leadership position on these issues—how do they communicate their activities to internal and external stakeholders?

A number of our customers are leaders in sustainability, and they are happy to talk about what they do. Interestingly, they talk with humility about their accomplishments. They also understand that their work can create competitive advantage. They typically share this information on their website, through the media, and in corporate social responsibility reports. When they partner with us, they can describe specific projects that they helped to build. One of the benefits of philanthropy is the emotional content; storytelling has more power than plain data with listeners. Real people and communities are essential for storytelling to be rich and personal. Connecting customers to specific projects can provide this kind of emotion and richness.

Do you have any response for those who are skeptical of going beyond the status quo because of cost concerns and the bottom line?

There are many sustainability initiatives that result in cost-savings, for instance energy efficiency. In these situations, the return on investment can be clear and compelling. But for some initiatives, the return on investment is harder to calculate. You may not be able to plug in numbers on a spreadsheet. Our experience is that a lot of customers do care about how a company behaves. Does a business want to be seen as exemplary? Many companies are raising the bar—the standard continues to be elevated, and with it, the expectations of corporate behavior. If you don’t keep up with social responsibility, you’re actually falling behind.

What are some examples of companies that are good models for social responsibility?

If you look at some of our long-term clients—including Green Mountain Coffee Roasters, Stonyfield Farm, Interface, Ben & Jerry’s, Aveda —you notice that sustainability has not simply been important to them, it has been a part of them. These businesses consider social responsibility to be fundamental to their identity. It’s harder for large organizations without that foundation to implement sustainability initiatives, but it’s no less important for them to do it. The question is: how can a larger organization find and tap the goodwill of its people to emphasize the truth that good citizenship makes for good business?