Task 1

Conduct a CSR Assessment

What is a CSR assessment?

No firm -- big or small -- is likely to do anything about CSR, unless the board of directors, senior management or owners recognize that some sort of CSR-related problem, opportunity or challenge exists. This recognition, nascent or fully articulated, in turn provides the fuel for proceeding with a CSR assessment, with the hope of shedding light on the nature of the problem, opportunity or challenge and its significance.

A logical first step is to gather and examine relevant information about the firm's products, services, decision-making processes and activities to determine accurately where the firm is now with respect to CSR activity, and to locate its "pressure points" for CSR action. A proper CSR assessment should provide an understanding of the following:

the firm's values and ethics
the internal and external drivers motivating the firm to undertake a more systematic approach to CSR
the key CSR issues that are affecting or could affect the firm
key stakeholders who are, or who need to be, engaged
the current corporate decision-making structure and its strengths and inadequacies in terms of implementing a more integrated CSR approach
the human resource and budgetary implications of such an approach
existing CSR-related initiatives.

The assessment should identify the main risks and opportunities, and culminate in a thorough gap analysis: where is the organization strong and where is it weak relative to internal goals, peers and best practices? This is essential information for identifying priorities and for selling the approach within and outside the firm.

Why do an assessment?

When the board of directors and top management or owners do not have an accurate snapshot of how far the firm is down the CSR road, it is unlikely they will be able to make informed decisions about moving ahead. Front-end intelligence gathering in the form of a CSR assessment can save a firm from launching a CSR approach or heading in a direction that is not sustainable. An assessment can also help identify CSR gaps and opportunities and thereby improve business decision making.

Many firms are already engaging in CSR activities without necessarily identifying them as such, and frequently a firm can introduce a CSR approach to support or complement this work without much incremental investment. For example, a firm may have in place quality, environmental, occupational health and safety and other management systems, employee educational advancement programs or community outreach initiatives. These are likely to become important building blocks of a systematic CSR approach. Among other things, a CSR assessment should identify all of these existing implicit initiatives, so they can be properly considered as part of a larger CSR approach.

How to do an assessment

A four-stage CSR assessment process is set out below.

Assemble a CSR leadership team
Develop a working definition of CSR
Review corporate documents, processes and activities
Identify and engage key stakeholders

This is not the only way to do an assessment; rather it is one way a firm can review the full range of its operations through a CSR lens. A number of organizations have developed useful tools to help firms do their assessment (see below). The bottom line is that as long as the firm does a thorough appraisal of its current and potential activities from a CSR perspective then it will have achieved the objective of the assessment.

1. Assemble a CSR leadership team

Ideally, a CSR leadership team would include representatives from the board of directors and top management or owners, as well as volunteers from various units within the firm that are affected by or involved in CSR issues. Other representatives could be senior personnel from human resources, environmental services, health and safety, community relations, legal affairs, finance and communications. Front-line staff in these areas and any other personnel who may become key players involved in implementing the CSR approach the firm eventually develops should also be on the team.

Keen employees should be encouraged to volunteer their time, energy and ideas. As the work of the team progresses and a better understanding of the implications of CSR for the firm emerges, it is quite possible that the membership of the team will change.

Even when there are no members of the board of directors on the team, it is vitally important that it be directly accountable to senior management and, ultimately, the board. This acknowledges that effective CSR implementation requires integration of the principles of corporate social responsibility into the firm's central values and activities. Identifying a key senior manager as CSR champion sends a clear signal that the firm considers corporate social responsibility to be important.

2. Develop a working definition of CSR

The first task of the leadership team is to develop a working definition of CSR for the firm. This will become the foundation for the rest of the assessment.

The definition for CSR should be something quite general. Here are some examples.

CSR is the firm';s practices and policies that contribute to the well-being of the environment, economy and society. They address the needs of customers, suppliers, shareholders and employees, as well as those of government, the general public and the communities where the firm operates, without compromising the ability of future generations to meet their own needs.
CSR is the way the company integrates economic, environmental and social objectives while, at the same time, addressing stakeholder expectations and sustaining or enhancing shareholder value.
CSR is the overall relationship between the corporation and its stakeholders, which include customers, employees, communities, owners/investors, government, suppliers and competitors. Elements of CSR include investment in community outreach, employee relations, creation and maintenance of employment, environmental stewardship and financial performance.
CSR is the responsibility the firm has to its stakeholders. It means that the firm's products and services create value for customers and contribute to the well-being of society. It means the firm operates using ethical business practices and expects the same from its suppliers and partners. It means minimizing the environmental impact of its facilities and products. It means providing jobs, paying taxes and making a profit, as well as supporting philanthropy and community involvement. It means treating employees with respect and being a good neighbour to the people next door as well as those half a world away.

The team may also wish to identify key values that motivate the firm, and particular concerns it and members of its supply chain have, such as inclusivity, stewardship and integrity. These could be related, for example, to the environment, workplace, community relations (including Aboriginal peoples, when relevant), human rights, customers, government relations, bribery and corruption, or corporate governance.

Engaging people at all levels of the organization -- from employees to managers and members of the board of directors -- from the very beginning in developing the definition will help ensure the approach the firm ultimately takes to CSR will resonate and be accepted throughout the organization.

The input of members of the board and senior managers can be particularly helpful in articulating a definition, since they should be able to shed light on the initial motivations for launching work on CSR.

3. Review corporate documents, processes and activities

With a working CSR definition and an initial understanding of the motivations behind the firm's interest in CSR, the team should then review key corporate documents, processes and activities for actual and potential CSR implications.

Documents. Existing mission statements, policies, codes of conduct, principles and other operating documents are logical candidates for review, as are external documents associated with programs or initiatives in which the firm is involved (e.g. if the firm "subscribes" to a set of sector-wide standards, principles or guidelines. It may be that the existing mission statement, policies or codes address worker relations, customer satisfaction or environmental protection in some regard. It is useful for the leadership team to explore why these items were developed and to learn from them (or at least acknowledge that they are CSR-related). It may be that they were past responses to CSR pressure points. By the same token, an absence of any reference to societal impacts or commitments in these documents may indicate that a culture shift may be required to effectively integrate CSR into decision making and business activities.
Processes. Firms typically have specific decision processes and associated decision-making bodies in place to address particular aspects of operations, and these may bear on the CSR approach. For example, a health and safety committee may take the lead in determining the resources, training and implementation of worker health and safety programs. Senior counsel may play a key role in decisions about environmental protection activities, in conjunction with senior engineers and other staff. It may also be that various parts of the organization are treated quite differently from one another. In many firms, decision making concerning suppliers is an area that touches on CSR in many regards, including training, wages, and health and safety protection. It is instructive for the leadership team to review these types of decisions, who makes them and how. It is also important to determine whether there is a unit or process in place to coordinate decisions about issues with a societal dimension.
Activities. The firm's activities that relate directly to providing its products or services to users can be closely connected to CSR. In addition to thoroughly examining internal operations for CSR-related challenges and opportunities, it may be useful for the leadership team to examine those of competitors and firms in other sectors. These can be helpful indications of areas in which the firm might wish to concentrate attention. Practical ideas may also be gleaned by examining activities in other jurisdictions, such as the level of security or conflict overseas, since these may be harbingers of challenges or opportunities to come. The team should also consider activities of business partners (particularly supply-chain partners), since these may significantly affect the firm.

4. Identify and engage key stakeholders

Although the work of the leadership team should reveal important social responsibility trends, problems and opportunities for the firm to act upon, the team may nevertheless miss important issues that are more evident to those outside the firm. As a result, the team may wish to hold discussions with key external stakeholders about CSR. Mapping the interests and concerns of stakeholders against those of the firm can reveal opportunities and potential problem areas.

It is important to be clear about the purpose of these discussions, since stakeholders might view it as an opportunity to express their views more generally about the company's behaviour in relation to them. Key to effectively engaging with stakeholders is to map their definition of “success” in working with the company. Identifying the results from this task (e.g. a summary of the CSR assessment that is publicly available) would be helpful.

Note that while stakeholder engagement is listed here as the last element of a CSR assessment, firms might wish to do this earlier (see Part 3 of this guide).

hand Make sure to do this

Create a list of all the possible elements of a CSR approach and check off what the firm is already doing, noting any gaps. To create the list, define the firm's stakeholder groups (such as employees and representatives of the communities where the firm operates) and come up with three or four initiatives for each.

Quick tips

Consider using one of the many existing self-assessment tools
Engage a consulting firm to do the assessment.
Ask an industry association or CSR specialist organization whether it offers assistance with self-assessment. (If not, encourage it to do so.)

Reality check

“Assembling a leadership team, developing a working definition of CSR with employee/management engagement, reviewing core documents, decision-making processes and CSR-related activities, and engaging stakeholders. Do you know how much time it will take to simply recruit and engage a leadership team that represents all of our business lines and offices throughout Canada and around the world, let alone schedule them into regular meetings to manage CSR activities? You've got to be kidding!”

If done properly, effective CSR implementation does indeed take a significant investment of resources at the “front end” of the process. The commercial returns for this investment flow from your firm being as prepared as possible to address the CSR challenges, opportunities and choices available, and your firm being less vulnerable to unexpected social and environment-related challenges to its activities and products. The working definition is the key element of the road map: it helps to ensure that everything that happens afterward is on course. Quite often, focusing on a small group of people who are already interested in and knowledgeable about CSR is a good starting point — develop the members of that group into CSR ambassadors. Also, it is important to realize that change takes time and that optimism must be tempered with patience. Develop a phased plan, budget realistically and get the appropriate sign-offs up front.

Existing CSR tools

Good Company Guidelines
Canadian Business for Social Responsibility developed the Good Company Guidelines to help firms implement socially and environmentally responsible initiatives. The guidelines offer a disciplined approach to implementing CSR, while helping with the development of benchmarks against which a company can measure CSR performance. The guidelines are a “what to do” not a “how to do” tool, and facilitate quick self-assessment to determine what stage a company has reached in its corporate social responsibility activities. Checklists organized by stakeholder groups provide a snapshot of how deeply a company is engaged in CSR, as measured by the company's level of engagement (i.e. commitments, policies, programs, evaluation and measurement, stakeholder involvement and accountability). While this tool is not a formal auditing tool that measures the results or success of CSR initiatives, it gives a quick picture of what initiatives are currently under way and where additional efforts are required. It also offers a modified version for small and medium-sized enterprises.

Conflict risk and impact assessment methodology
International Alert has developed the risk and impact assessment methodology “Conflict-Sensitive Business Practice: Guidance for Extractive Industries” funded in part by the Human Security Program at Foreign Affairs Canada. This risk and impact assessment tool presents comprehensive guidance for oil, mining and natural gas companies that are doing business or contemplating doing business in conflict-prone societies. It is designed for field managers working across a range of business activities, as well as headquarters staff involved in political risk assessment, security affairs, external relations and social performance.

Corporate Responsibility Assessment Tool
Developed by the Conference Board of Canada and Imagine Canada, together with an advisory group of leading Canadian companies, the Corporate Responsibility Assessment Tool provides one-stop shopping for companies interested in CSR assessment. Employees and managers can do an online internal evaluation of the company's performance in five areas related to corporate responsibility: governance and management practices; human resources management; community involvement and investment; environment, health and safety; and human rights. The information collected shows how the firm's corporate responsibility practices compare to public expectations of responsible behaviour -- where its strengths lie and what areas need improvement. The company can use this information to establish priorities for corporate responsibility and develop a business strategy for integrating corporate responsibility into everyday operations.

Caux Round Table Self Assessment and Improvement Tool
Founded in 1986, the Caux Round Table is a network of senior business leaders from industrialized and developing nations who recognize that business must take a leadership role in developing a more fair, free and transparent society. In addition to its Principles for Business, the group has developed the Self Assessment and Improvement Tool to help senior executives and boards of directors address growing expectations for responsible business conduct. Modelled after the Malcolm Baldrige National Quality Program, the tool translates seven general principles for business into seven assessment categories, and considers company performance within each from seven perspectives (six stakeholders, plus fundamental duties).

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