Corporate responsibility today is about much more than old-style community investment, but companies should not overlook the benefits of well-designed giving programmes, says Giles Gibbons, chief executive, Good Business

As more and more companies embrace the need to think through their impact on society and the environment in a rounded and strategic way, corporate responsibility has moved ever more mainstream. Most major businesses now have a dedicated corporate responsibility department with a clear remit to help the organisation understand and address the social and environmental issues it faces, and turn some of these challenges into opportunities.

Corporate responsibility commitments, initiatives and actions often feature in standard advertising – unsurprising given that a company’s ecological and ethical credentials are an increasingly important part of the decision-making mix for many consumers. We begin to see explicit discussion of the discipline moving into the business, and sometimes the mainstream, press. Even if the terminology is not used, the subject matter is regularly front-page news.

From the perspective of those of us who work in this field, this is undoubtedly a good thing. When meeting companies for the first time, I often find we can bypass the philosophical debate about responsible business and get on immediately to working out how to do it most effectively. In place of persuasion, we have planning for action.

And, most importantly of all, the action we are planning is no longer a feel-good activity for the company, designed to act as an exercise in moral offsetting to counteract any negative feelings about what it actually does. Quite the opposite. It is directly about what the company does as a business, how it carries out its core services and operations, and the impact these have on the world.

This is the key evolution that has taken place over the last few years. These are exciting developments and ones of which we should be proud. But there is a danger that we have left a casualty by the wayside: community investment.

Outer core

Community investment is best defined in our view as those activities that companies undertake beyond their core commercial services to benefit the communities in which they operate. This could entail many different kinds of activities, but commonly involves a company giving its resources in the form of time, money and products to a social or environmental cause.

This activity was once seen as what corporate responsibility was all about. The only non-financial report a company would publish would be a glossy brochure outlining its “good works”. Now we find that the vast majority of companies publish a comprehensive report that details the ways in which it strives to be a thoroughly responsible business. And the community activity is added on the end, almost as an aside.

Perhaps unsurprisingly, corporate responsibility experts note a growing reluctance on the part of some companies to engage in community investment. Business in the Community’s community impact director, Catherine Sermon, says: “Certainly some companies have stagnated in their approach to community investment because they feel they should now move onto bigger things.”

Mark Goyder, founder of business thinktank Tomorrow’s Company, believes that the centre of gravity is shifting away from community investment towards the view that a business needs to redefine its whole product and service strategy so that it acts to meet the long-term needs of society. The current climate has prompted businesses to look at their community investment more critically, he says. While this is a positive development, he detects “a pressure in some places to desist from some community investment”.

Community investment is in danger of being marginalised as an outmoded form of corporate behaviour. This would be a serious mistake.

Real value

Community investment has a legitimate and important role within responsible business, bringing the unique competencies of a company to bear on issues affecting the community in which it operates. It may not be the place for the company to address the core issues associated with its business (although it can and often does play a role in an overall programme of action). But the fact that it is slightly more detached does not make it a poor relation of core responsible business practice. It just makes it a bit different.

So what we need is a vision of community investment that recognises its rightful place and its particular strengths and values, rather than denigrating it simply because it cannot fulfil the whole job of corporate responsibility. This research helps build a picture of clearly understood community investment by looking at how it is being practised in a number of leading companies.

We have found an increasing level of sophistication in the way companies are planning and delivering community investment. The benefits of this are clear. As companies become better at directing their community investment strategically and implementing it effectively they not only get more successful at achieving whatever business goals they are seeking to fulfil. They also start to make a real impact on the issues they have chosen to tackle. Which is good news for everyone.

Giles Gibbons is managing director of Good Business.