Part one of a two-part series on the new face of Corporate Social Responsibility. Corporate Social Responsibility (CSR) encompasses corporations’ efforts to understand and take responsibility for their impact on our collective environmental and social welfare. These efforts very often dovetail with the companies' commitment and investment in their employees and the communities where their businesses are located.
First and foremost, it is important to note that the vast majority of companies are devoted to the communities in which they operate and pursue many avenues to make these better for all. There are countless businesses out there that seek to use their deep pockets and political influence to affect positive change.
And yet, a small fraction of (usually large) companies have economic and political power that is not always leveraged for the greater good. Whether they take shortcuts that lead to unsafe work conditions for employees or environmental disasters--think big tobacco or Erin Brokovich blowing the whistle on PG&E--there are certianly examples of companies that fall short of their duty as corporate citizens.
CSR offers a way for businesses to act in support of the greater good, and these initiatives can take a range of forms. Some corporations donate to charities, give employees time to volunteer, make community investments to offset the negative impact of their operations, or invest in research and development of new, more sustainable technologies to replace older, environmentally harmful ones.
One key element of most CSR pursuits is the explicit understanding that social good is embedded into any business growth ambitions. Many organizations have even adopted the concept of the “triple bottom line,” which ranks social, environmental, and economic gains in that order: "people, planet, profit."
This last point underscores a key conceptual shift. For centuries, most business models have viewed monetary growth as the ultimate goal, with resource degradation seen as an unfortunate means to that end. So while some saw CSR as a way to counteract the inherent social cost of doing business, many entrepreneurs now consider the social-environmental benefit to be a leading priority of their growth models.
For example, consider JP Morgan’s March 7th announcement that it will no longer invest in coal mines or coal-fired power plants. Through this decision, the company seeks to add to its profitability while minimizing the negative impact on the environment.
“Companies use CSR in a number of contexts,” says Dr. Marc Peterman, founding partner with Blue Ivy Ventures, a Connecticut-based investment fund focusing on sustainability issues. “Some see it as community support, giving back, making donations; in the best cases, though, companies pursue CSR initiatives that relate to their core business functions.”
The most effective CSR efforts can even help improve an organization’s cost of operations. And for many companies, one of the largest operating expenses is energy.
“An investment in renewables makes good business and CSR sense,” Peterman continues. “All the financial innovation around renewables is an example of how you can create opportunities to increase the solar footprint, or provide products for investors at lower costs. You’re increasing install base, providing financial products…and solar has been a leader in that.”
Small wonder, then, that we’ve seen a shift to sustainable energy—solar in particular—emerging as a key part of many companies’ CSR strategies. The real win-win here is the savings that are so directly linked to solar energy.
For our business, solar has proven its ability to yield attractive returns; with falling prices driving continued solar growth, the time was right for Sunvestment Energy Group’s (SEG's) innovative financing model to bring the congruence of these CSR-friendly trends toghether in a web-based platform to aid in fulfilling organzations' CSR goals.
As we see a broader awareness of ethical consumer behavior gaining wider acceptance, this is likely to drive an even greater push toward Corporate Social Responsibility. Even in the non-profit space, large community organizations have made CSR a core part of their operations, and that mentality is trickling down to smaller mission-based organizations throughout the country.
What’s more, in addition to making solar possible for those in the nonprofit space, SEG significantly reduces the need for paper by shifting transactions online...and that sustainability is central to our way of doing business.
Whether you’re a for-profit or mission-based community organization, and whether your monthly electric bill is $500 or $50,000, SEG offers an opportunity for any business to take part in the CSR revolution.
In the second part of this series, we'll explain a relatively new trend in corporate governance, the certified B Corporation. With over 1600 companies around the globe as certified B Corporations, this new designation is changing the rulebook to enable companies to make sustainability an integral part of their growth plans from boardroom behavior to the bricks of mainstreet.