by Bill Conley — Originally published in the May/June 2017 issue of FMJ
Companies should be interested in the future. After all, they are going to spend every day doing business there. When a company is first started, a key component is a business plan. This is important to chart a course for the future and look ahead to success and prosperity. Unfortunately, once that company is well-established, focus sometimes narrows down to year end totals, or even quarterly performance. The long-term vision with which entrepreneurs started may get cluttered by more short-term concerns. Looking ahead and planning strategically (and working that plan), is imperative for long-term success.
A strong investment in the future is the creation and adherence to a corporate social responsibility platform. Corporate social responsibility (CSR) is a form of self-regulation that is integrated into a business model. CSR policy functions as a business monitor and ensures its active compliance with the spirit of the law, ethical standards and care for the environment. It is intended to be a part of an organization’s mission as well as serve as a guide to what the company represents for its stakeholders.
There are a number of different aspects to a CSR initiative. Part of it relies on ethics, both in how the business is run and how it is marketed. Companies that ethically market to consumers are placing a higher value on their customers and respecting them as people. They do not try to manipulate or falsely advertise to potential consumers. This is important for companies that want to be viewed as ethical. A second piece of CSR relies on community involvement, which can include raising money for charities or implementing food drives. It could entail sponsoring community events and supporting local economic growth and engaging in fair trade practices.
From a facility management perspective, the key ingredient in supporting a CSR program revolves around the environment and sustainability. How a company manages its resources depends a lot on how the facility is run. Facility managers have one of the largest impacts on the environment as it relates to the business world. They control water usage, energy consumption, waste management and diversion. These practices in themselves can be looked at as a way to invest in the future — saving until tomorrow what isn’t used today. Tomorrows will go on indefinitely; natural resources won’t.
The Company
Corporate social responsibility can be defined as a business decision aimed at maintaining current and future value. It shows respect for people, communities, and the environment around the world. That message and a demonstrated commitment by the company will cement its reputation as a preferred business with which to deal. CSR will serve as a foundation for ongoing business practices that will create credibility with its stakeholders and help to ensure long-term sustained success.
Creating a respected brand based on CSR is one of many benefits that can be experienced by a company on this path. Implementing sustainable actions leads to resource conservation. It minimizes the impact of volatility in the price of energy, fuels and production materials. It provides the company with a longer-term approach to value generation, potentially delivering more resilient, less risky results and the ability to try new things.
Companies with core sustainability values innovate in order to protect their values. These innovations go beyond mere product tweaks, occurring across all business functions, from marketing to accounting to corporate structure. Many innovations are only possible because the companies are willing to apply a long and broad enough lens to deem the extent and timeframe of return that would be acceptable.
In the absence of strong values, there might not be the conviction to lead or challenge the status quo. Innovations are most likely to be successful when they combine the requirements of all parts of the business ecosystem, from product development, to supplier or retailer and consumer demands. This can be pushed even further in order to have an effect beyond the business ecosystem. Companies with strong CSR programs have effectively thrown a gauntlet down within their industries; competitors cannot avoid being compared against them and the ways of doing and measuring business in an ethical and sustainable manner.
The Employees
A company having a reputation as socially and sustainably responsible has the opportunity of recruiting and hiring some of the top talent in their industry. Students graduating from college are strongly invested and interested in the impact of business on the environment. From graduation pledges, containing statements regarding their preferences in selecting companies with strong sustainability practices, to survey results, it is obvious that CSR plays a large part in determining where members of Generation X and Generation Y want to work. In a survey from Net Impact, it was reported that 53 percent of workers want a job where they can make a positive impact and 35 percent of those interviewed would take a pay cut to join a company committed to CSR.
In the same vein, leaders rising in business today want more than just a good salary. They are expecting more relevance in their work. They tie their personal values more closely to their career than other generations. They are keenly aware of the environmental challenges on the horizon and want to play a key part in mitigating them. They are expected to run a company for profit, but they want to go beyond that. They want to be successful while having an impact in society that is sustainable and makes a true difference.
Companies that recognize this, that have invested in a socially responsible path, have the leverage in this scenario. They offer increased opportunities for their employees to engage in societal issues, while minimizing the possibility of their best employees leaving the organization to find one that meets with their expectations. By providing a platform for such socially conscious individuals, and creating an atmosphere that incubates and empowers their initiatives, intelligent companies are able to keep their most talented and highly skilled employees. They are also fulfilling society’s growing demands for sustainable actions while opening the way for new ideas, expanded markets and innovation.
Employees play an important part in this effort. Sustainability improvements will only take seed if the inside of the company is treated as an ecosystem in itself. There need to be strong-minded individuals to influence the culture within their systems. Evidence has shown that these are the types of personnel that should be hired.
Companies immersed in CSR understand the importance of having and supporting sustainability champions. These individuals need to be encouraged and enabled to expend efforts aimed at moving their networks toward more responsible frameworks of business. Once there is a critical mass of people who are involved in this program, long-term needs — financial, social and environmental — are recognized, evaluated and implemented.
Customers
One CSR investment in the future that is extremely pertinent to a company’s success revolves around their customers. Having such a program builds trust and a brand that inspires loyalty. It creates recognition of responsible activities and a reputation for “doing good.” Not too long ago, sustainability reports were viewed as unnecessary and inconvenient; an added burden that was, at best, meaningless. In today’s business world, more and more companies, both large and small, have integrated CSR as part of their daily business routines and have added a sustainability section to their annual reports.
Consumer demand is exponentially increasing in expectation that companies change their practices and become more transparent and communicative, while also actively working to make the world a better place. According to a recent Nielsen survey, 55 percent of online consumers around the world surveyed said they would be willing to pay more for products and services from companies that are socially and environmentally responsible. CSR is now more of a direct corporate response to consumers’ ever-growing demands for transparency.
On the flip side, consumers are showing their disdain and staying away from companies that ignore social responsibility and develop unethical reputations. Companies with these business practices are more likely to experience legal troubles that could result in their failure, and customers do not want to be associated with such entities that could jeopardize their purchases or investments. They do not want to be aligned with a company whose actions show they don’t care about people or the environment. Companies need to care about social responsibility because customers do.
Stakeholders
No company exists on its own. There is an interdependency inherent in any business. In order to achieve meaningful sustainability improvements, companies must extend their influence to their wider ecosystem of investors, suppliers and customers. Sustainability serves as the ultimate exercise in total collaboration. The emphasis of education is vital in the effort to spread a responsible and sustainably profitable approach to business. A large part of a sustainability agenda is educating current and potential suppliers. Purchasing power is not enough. A company must instill intrinsic motivation in those affected by these actions, empowering them and engendering the understanding that adhering to the tenets of CSR and being a willing partner will benefit them as well.
Investors realize that profiting from sustainability-driven values is determined by what the company is spending money on, why it is doing so, and when it expects a return. Those individuals who put money into a business want a return on their investment. There is a difference between a business agenda that allows owners to extract wealth from the company versus a measure that makes the company more resilient and able to continue about its purpose of business for the long-term. A company must be willing to avoid short-term fixes in favor of upfront costs in return for long-term benefits, both to themselves as well as their suppliers.
There are many intangible factors that affect the perception of a company. These include corporate credibility, trust in the company and its products/ services and, these days, responsible long-term strategies rather than thinly concealed, shallow short-term fixes.
Broadening the corporate view of value allows a business to consider investing in activities that protect the business into the future, as well as resulting in indirect profits to the company. Giving back to society brings benefits that far exceed any costs, whether it’s in terms of employee morale, or strengthening the brand name. The quality of a company’s staff, or brand loyalty from customers, directly affect its monetary worth. It is also widely accepted that a narrow view of future value can lead to catastrophic costs to a business. Depending on its motivation, a company can win or lose from more than just its sales.
The Facility Manager
Of course, the facility manager’s role in all this is pivotal. Facility mangers hold sway over most of the consumption and disposal of resources in the workplace. Energy efficiency, water conservation, the use of rapidly renewable resources or renewable energy and life cycle assessments of materials all play a part in the sustainability aspect of CSR. Facility professionals are extremely adept at cost avoidance, and well-run facilities translate to corporate savings that trickles down as a benefit to all stakeholders.
The environmental health and safety programs that are tied to sustainability will lead to employee attraction and retention. Those working in a clean, healthy environment will have higher morale and motivation, which enables more productivity and better quality work. The reputation of such a program will invite prospective new hires to join the organization.
If a facility manger doesn’t make the final decisions on the introduction or implementation of a CSR program, he or she can still influence senior management. Through well-designed sustainability efforts with quantitative proof of success, and with a consistent, persistent approach, a facility manager may be able to provide just enough of an impetus to get the ball rolling.
This leads to another opportunity for an organization to invest in the future; that is, supporting continuing education for facility managers. Facility professionals perform myriad functions when maintaining and managing sustainability/CSR programs. Their holistic view of operations allows them to integrate practices throughout the company. They provide support while being able to enhance and improve on sustainable practices and endeavors. However, education is critical.
IFMA offers credentials to empower sustainability efforts in FM, through ground-level instruction, a sustainability-centered designation and experiential certification. Additionally, IFMA’s recent collaboration with the Royal Institution of Chartered Surveyors has opened the door for even more educational opportunities to grow professional FM knowledge. For organizations to truly succeed in their quest for CSR, a well-educated facility management staff will provide long-term benefits.
May the path continue on…
The impact of an organization’s activities on such a wide range of stakeholders may come as a pleasant revelation. While profit may be the end goal for any business, responsible businesses have also managed to attract more investors, reduce their risks and address stakeholder concerns. From employees to customers, from investors to service providers, there are tangible benefits to be had by all. Consumers appreciate the quality of products and services provided by responsible companies; investors and shareholders truly enjoy the bottom line results delivered. Employees take pride in the efforts their company is making. All in all, more interest is being shown in businesses demonstrating genuine corporate social responsibility.
The key is not to treat CSR as a special project. Applying CSR should just be redefining aspects of what is already being done. It doesn’t need to be exotic or costly; it just needs to become business as usual, with new parameters. If companies don’t continually build their reputation and credibility to provide what the public expects, they run the danger of becoming irrelevant and just fading away. A lack of followers will drive that result, leading to a dismal future. – FMJ
Bill Conley, CFM, SFP, FMP, LEED AP, IFMA Fellow, is facility manager at Yamaha Motor Corp. in Cypress, California, USA. Prior to that, he served as owner and chief sustainability officer of CFM2, a facility management and sustainability consulting company. Conley has more than 40 years of experience in the facility management profession and has been a proponent of sustainable operations for more than 20 years.
Conley has served on the IFMA board of directors, is a recipient of IFMA’s distinguished member of the year award and has received the association’s distinguished author award three times. He has been a regular contributor to FMJ for more than 20 years and has authored more than 60 FMJ articles.