We talked about CSR in a previous article. The acronym stands for Corporate Social Responsibility, it’s a concept which encompasses a host of other sub-concepts that essentially fall under three pillars. These three pillars of CSR cover specific themes and practices that together create a responsible corporate culture and – most importantly – make a positive impact every day.
What are the three pillars of CSR ?
The three pillars are economic, social and environmental. A company’s sustainable development strategy focuses on these three key topics and action plans are created based on them.
At first glance, these three pillars may appear different, but they actually contain many interlinked concepts. That’s why it’s so important to invest equally in each.
The aim of a responsible company is to create economic sustainability, while behaving in an environmentally and socially responsible way. A CSR policy’s legitimacy and, above all, progress rely on these fundamental principles.
The social pillar is primarily based on complying with legislation regarding human rights, working conditions and non-discrimination. Access to a working environment that respects laws considered basic in the West is the first stone to building this pillar.
The second stone of the pillar is to go further and incorporate concepts that help to create a stress-free workspace conducive to employee development, such as well-being, diversity and inclusion, health, training, professional development and safety.
The third stone builds the pillar beyond the company’s boundaries and takes into account external stakeholders such as customers, the company’s direct community, and any indirect communities that may be affected by the company’s choices, i.e., through its supply chain. To address this, new practices such as satisfaction surveys, partnerships with public authorities or supplier analysis can be integrated into a company’s daily operations.
Consequently, the relationship between a responsible company and its stakeholders is no longer solely business-centred, it also takes into account stakeholder well-being.
To ensure improvement of its socially responsible practices, the company will need to compile data, analyse and report on it, and create KPIs for setting progress targets.
The world is changing… all stakeholders are better informed and now embrace social and environmental standards in their daily work and lives. Several studies have already demonstrated the benefits of having corporate social values, including employee retention and attraction, productivity and innovation, and a positive corporate image.
As the name suggests, the environmental aspect of a CSR strategy covers ecological issues and the impact that the company has on the environment. Faced with the climate emergency, companies often choose to concentrate on this pillar first.
Much like the social pillar, this pillar encompasses a set of concepts and practices both inside and outside the company. Companies wishing to reduce their negative impact on the environment and integrate responsible behaviour need to take into account concepts like greenhouse gas emissions, circularity, renewable energies and responsible procurement. These various issues are part of a responsible approach to the environment and must be addressed in order to reduce a product’s impact as best possible.
To ensure a comprehensive approach, these points for attention should be analysed under the company’s different ‘scopes’, i.e., in relation to the company’s daily operations, facilities, products and/or services. For example, setting up a recycling programme in the office building is not enough to be considered a responsible company. A 360° approach is needed to reduce the overall environmental footprint.
In order to create a robust environmental management system, it is important to measure its impact, but also to collect, analyse and report the data. This will help the company have a clear view of the situation. It will also facilitate the set up of KPIs that will make it easier to create reduction targets.
Contrary to common believes, adopting an environmental policy also helps a company to optimise its budget. It can be done thanks to practices such as recycling and improved resource management.
Time is of the essence
Following the latest IPCC report published early 2022, we see – once again – the urgent need to change how we do things. Companies need to be aware of their impact and learn how to change their business operations to minimise the negative effects they may have on the environment.
The economic pillar is not about making profit at any cost. Rather, it’s about focusing on business sustainability and ensuring that it is built on solid foundations to create resilience. In the wake of the recent pandemic and global challenges, business resilience has become key to dealing with adversity.
The economic focus is on behaviours at company level, such as compliance with legislation, risk management, transparency and good governance. These behaviours help to gain the trust of the company’s stakeholders as they demonstrate a responsible corporate culture. Many practices stem from these behaviours, leading to tangible action such as sustainability reports, stakeholder maps and/or certification.
The company’s surroundings
A company’s economic responsibility also includes supporting the local economy. For example, a policy of local sourcing enables the responsible company to support its surrounding community. With strong roots in its geographical area, the company becomes a community player and can thus actively create a positive impact. As mentioned above, a responsible supply chain continues to create a positive impact beyond the direct community through the company’s economic performance.
Balance between the three pillars of a CSR strategy
Corporate social responsibility is the approach taken by a company that wishes to create a positive (or at least neutral) impact on the environment and society while maintaining its economic activity.
These three pillars – economy, environment and society – are also known as the 3Ps: People, Planet, Prosperity. It’s all about finding the perfect balance between these three concepts.
Certification to keep on track with the three pillars
The three pillars of CSR include several sub-categories which are all interlinked. We understand just how difficult it can be to grasp and apply all these concepts to your business.
That’s why we believe using a framework could help you. When an organisation decides to take a CSR approach and create a responsible corporate culture, it does not always know where to start.
Several frames of reference are available – the United Nations’ 17 Sustainable Development Goals are the most well-known. And, if your final objective is to get certified or be awarded a label, we recommend using the reference framework proposed by the certifying body/label organisation.
One example is ESR in Luxembourg, which stands for Entreprise Socialement Responsable, or Socially Responsible Enterprise in English. An ESR Guide was prepared together with the main CSR contributors in Luxembourg to help companies in their quest for obtaining the ESR label. It is proposed by the certifying body INDR and seeks to promote CSR among national companies so that they contribute to sustainable development.
How does the ESR Guide incorporate the 3 pillars of CSR?
The guide contains a set of questions divided into three categories: economic, social and environmental. These three categories contain questions related to the sub-concepts discussed above. Here are some examples of the topics covered…
The questions address the company’s business model. It also looks at the responsible connotation of the service/product provided, company governance and transparency.
The social aspect focuses on the well-being of the company’s employees. The practices for diversity and inclusion in the workplace, development opportunities and impact on the community are also analyzed.
The environmental pillar looks at the company’s facilities and integration of ecological systems, responsible behaviour in daily operations, whether carbon footprint is calculated, etc.
These questions can help inspire you in building your responsible approach. The ESR guide will also direct you in creating a list of official documents to produce. Of course, to be awarded the ESR label, you need to present evidence.
The label is based on the highest CSR standards. The INDR has joined forces with AFNOR in France and Ecopark in Switzerland to create the Responsibility Europe label. This is in addition to the ESR label and provides more international legitimacy for Luxembourg companies.
All three pillars of a CSR strategy are equally important; they are interlinked and require equal attention. Developing a responsible approach is based on a balance between these three areas of action.
Several tools are available to help you embark on a sustainable transition and make your company a responsible market player.
Now, it’s up to you to take the plunge!