What a mature CSR team looks like

As climate change, social inequality and other critical issues become increasingly urgent, many companies have created dedicated departments focused on corporate social responsibility (CSR). But while this is an important first step, the authors’ new research suggests that organizations with the most mature CSR programs are often in fact those with the smallest CSR departments. Based on an in-depth analysis of several Swiss companies as well as a review of previous research on CSR implementation, they identify a three-phase process by which many companies progress as their CSR operations move from a high-level vision to a vision on the ground. impact on the ground: a nascent stage in which the CSR department centralizes and merges, an intermediate stage in which it decentralizes and orchestrates, and a final stage in which it withdraws and consults. Through this process, resources flow from the central CSR team to functional units, which means that the size and budget of the CSR department is often a poor indicator of the maturity of its CSR execution. To paint an accurate picture of a company’s performance – and identify opportunities for improvement – ​​the authors ultimately suggest that it is essential to recognize these nuances and calibrate expectations and assessments accordingly.

From the fight against climate change to the fight against social inequalities, corporate social responsibility (CSR) is more urgent than ever. But especially for large multinational companies, systematically integrating these critical social, environmental and ethical concerns into day-to-day business operations can pose significant challenges. Many companies have dedicated CSR departments in place to drive these efforts – yet our recent research suggests that a strong CSR department does not necessarily indicate effective implementation.

To better understand what it takes to move from lofty ideals to real impact, we conducted an in-depth analysis of several leading Swiss companies in the banking and insurance industries. We interviewed nearly three dozen decision-makers from these companies’ CSR departments, as well as representatives from functional departments such as purchasing, trading, underwriting and marketing, and we also systematically studied their sustainability, policy and policy documents. and other strategic documents. We complemented these analyzes with a thorough review of previous research on CSR implementation, including some of our own studies of German and Dutch companies, to ensure that the patterns we observed hold across different sectors and countries.

Based on this extensive research, we have determined that successful CSR implementation relies on the development of good relationships between the central CSR department and the functional departments where CSR practices are to be executed. In addition, we have identified a three-step process through which many organizations progress as their CSR operations progress: In the nascent phase, the CSR department is actually the strongest, as the focus is on merging a centralized CSR strategy. In the middle phase, these plans are decentralized as ownership begins to transfer to other departments to develop concrete practices and procedures. Finally, in the maturity phase, the CSR department retreats into an advisory role largely focused on collecting feedback and maintaining continuous improvement mechanisms, while individual business units largely manage execution. .

First phase: centralization and merger

To start implementing CSR, the CSR department must be in charge. Once management is committed to the CSR objectives, the CSR department will play a key role in driving and developing a centralized strategy and vision for the entire business. As one interviewee explained, “the CSR department initiates the whole implementation process at the beginning of the period. It assesses existing activities in the context of CSR and indicates where the journey should take us through specific measures. At the beginning, a CSR department is very relevant.

In addition to centralizing strategy, early-stage CSR departments also engage in proactive outreach to build coalitions of decision makers in functional departments. Merging information about the unique needs and goals of different departments helps the central CSR department determine how best to adapt its strategy in these different contexts, and building relationships with these stakeholders is an important foundation. for future implementation. But at this early stage, responsibility for CSR still lies primarily with the CSR department, while the role of functional departments remains limited. As a result, companies whose CSR efforts are still relatively nascent tend to allocate most of their budget and staff to the CSR department, rather than to other business units.

Phase two: Decentralize and orchestrate

Once an organization has developed a central strategy and merged key information and stakeholders, ownership of CSR can begin to be decentralized and distributed. At this stage, functional departments can become more active players in implementing relevant CSR practices in their operations. For example, one executive we spoke to said that for CSR goals to truly apply to their entire organization, “individual divisions of the company need to be accountable for CSR”.

That said, we found that the CSR department is still quite large at this stage. With ownership being progressively shared between the central department and functional units, CSR managers must orchestrate the cohesive and cohesive implementation of CSR strategies across the business. Thus, to meet the needs of this transition phase, we have seen that resources are beginning to be transferred to the functional departments, with budgets and staff increasingly divided between the central department and the other units. This does not necessarily mean an overall increase in CSR budgets, but simply that funds and staff are increasingly assigned to CSR-related tasks in functional departments, such as overseeing the implementation of CSR policies. and monitoring of progress on CSR commitments.

Phase Three: Retreat and Consultation

Finally, we found that the most mature CSR operations were actually those whose CSR departments had the least resources and direct authority, as they had successfully passed ownership to functional departments. At this stage, “CSR gains in importance and, at the same time, the burden of the CSR department is reduced…[as] different departments deal with specific CSR topics… in a specialized way. During our interviews and analysis, we found that in organizations with the most advanced levels of implementation, CSR efforts did not take place within a CSR department, but in the functional departments of the company. In these companies, the centralized CSR department has fallen back on an advisory role, with the various departments steering the execution and adapting the consolidated CSR strategy to meet their own needs.

Of course, even in this phase, the CSR department can still offer useful strategic advice and insight into emerging trends such as new climate risks or digital liability standards. But as one interviewee described it, “Once CSR initiatives are implemented in business units, CSR no longer belongs to the CSR department…[so] the CSR team then becomes smaller, and its importance is reduced.

For companies at this late stage, the resources for implementing CSR largely belonged to functional departments. While their CSR departments had smaller budgets and teams, other departments in the organization had dedicated CSR funding, as well as employees who knew CSR and whose regular job descriptions included substantial CSR-related activities.

CSR leaders and functional departments must work together

Ultimately, our research demonstrates the importance of collaboration between key CSR departments and functional teams across the organization. While the CSR department plays a key role in coordinating the upstream strategy, it is mainly in the functional departments that the CSR plans will actually be implemented. This distribution of power will vary over time as CSR efforts mature – but no matter where an organization is in this process, strong relationships between these different stakeholders are essential.

In addition, our analysis also illustrates how difficult it can be to accurately assess an organization’s CSR performance. To get an idea of ​​the extent of a company’s CSR implementation, it is important to look not only at the CSR managers, but also at the decision makers in the different functional departments. These functional leaders are essential agents of change, and successful execution is only possible if they are onboarded and empowered to support action on higher-level strategic goals. Similarly, simply measuring a CSR department’s budget or staff may not be a reliable indicator of actual implementation, as the most advanced organizations in our study were often those with the smallest centralized CSR operations. . To paint a true picture of a company’s performance and identify opportunities for improvement, it’s essential to understand the nuances of how CSR efforts move from strategic vision to real change on the ground.

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