A number of approaches have been developed to enable companies to meet their responsibilities (i.e., environmental stewardship, social equity and well being, and community economic vitality) to their stakeholders. These programs have been focused on strategy development and initiatives to implement the strategy in a decidedly top-down driven fashion. Employees and suppliers have often viewed these initiatives as unfunded mandates, sometimes delivered in a seemingly heavy-handed manner.
Corporate responsibility officials have a considerable body of knowledge to draw upon that would provide a decidedly better approach to deploying their strategy to every point of presence of their products and/or services. This knowledge could be effectively used to further extend the strategy to each area throughout their supply chain. Let's take a look at how this can be accomplished.
Management systems (e.g., ISO 9001 and ISO 14001) have been used to make quality and environment an integral part of how each business is operated on the local level. It is important to manage responsibility so that it is a part of what every employee does every day. Responsibility needs to be part of every business decision at the local level where the company's "license to operate" is earned.
By this time next year, ISO 26000 will be adding social responsibility and governance to these important management system standards. British Standards has already released a sustainability standard (BS 8900) and Standards of Australia has a Corporate Responsibility Standard (AS 8303).
Each unit of the business and all of the suppliers can implement a management system that will "manage" responsibility and make it their own. It can be done in a manner that is consistent with the responsibility strategy. The customer can audit (i.e., second party audit) the ability of the suppliers to implement the strategy in their operations, OR the customer could have a third party audit the supply chain -- AND each of its points of presence.
Many companies that have a Corporate Responsibility Program also use management systems. However in almost every case, these programs are not used to manage responsibility. This may just be part of the separate silo thinking that prevails in most companies.
Performance frameworks are used to create leading indicators that will push the company to best practice in many areas critical to the competitiveness of the company:
It has been demonstrated that companies that use one of the more than 70 available performance frameworks outperform financially those competitors that do not use these systems. Many companies with Corporate Responsibility Programs use performance frameworks. However, they are rarely used by the Responsibility Program. Perhaps this is yet another demonstration of separate silo thinking.
So what would it be like if a company actually used what we are referring to as "Managed Responsibility Performance?" The importance of addressing the three responsibilities would become part of everyone's job. This would happen throughout the enterprise (even if it is a single location) and throughout the entire value chain. The automotive industry has made such managed quality and environmental stewardship part of their value chain. It can certainly be done if a company wished to include responsibility within the environmental management program of an ISO 14001 program or as a product specification in the quality management program.
The performance program provides a single score to each point of presence. These scores can be aggregated and disaggregated into business units, supply chains, and transportation webs. It would be possible to see how every unit is performing. This essentially makes continual improvement into a quantitative value. Each of the GRI results can be given a score and all of the lagging indicators can be aggregated into total scores for the five categories provided. Alternatively they can be further aggregated into a single lagging indicator score. No need to transmit the complicated dashboards or performance scorecards. It is like having a grade point average rather than an unrelated collection of quizzes, examination, semester paper and classroom participation scores for four or five courses each semester.
Some companies are beginning to wilt under the pressure of filling out so many questionnaires to inform the Socially Responsible Investment community and its other stakeholders. Managed Responsibility Performance is verifiable by a third party and each component has a body of knowledge sufficient to justify the claims made above.
So who's going to step up and lead the way? Do we still need to arrange the chairs on the deck of the Titanic one more time?
Robert B. Pojasek, Ph.D., is the sustainability practice leader at Capaccio Environmental Engineering and an internationally recognized expert on the topic of business sustainability and process improvement.
Image CC licensed by Flickr user Attempts at Photography.