Climate and resource protection, social plights and hungry hedge funds have got more and more company decisionmakers worrying. They are beginning to realise that earning huge profits is no longer enough. Increasingly, they are being questioned about how those profits are made. But as markets are becoming saturated and growingly similar products and services appear on the scene, companies find it ever more difficult to stand out from the crowd of competitors. In the face of such developments, companies are again turning to old values which they have come to disregard in the recent past. These values add to a company’s good standing among customers and contribute to the buying decisions they take (as well as create customer brand loyalty). What in today’s business language is called Corporate Social Responsibility (CSR), Sustainable Leadership and Social Entrepreneurship basically has the same meaning, namely living a balance of economic, social and ecological interests – in short, sustainable business.
It is largely owed to the small family businesses that this interaction with the environment has survived until the present day. But also in larger international groups, living company values has never been an obstacle to success. One case in point is the plastic pipe manufacturer Poloplast from Upper Austria; the company has been doing sustainable business for fifty years and was among the first in Austria to publish a Sustainability Report in 2005.
Corporate Social Responsibility: a sound management tool
At least since the Johannesburg Summit, voluntary CSR efforts in tune with modern requirements have also gained importance within the Federation of Austrian Industry (IV). Apart from the positive effects outlined above, IV Deputy Secretary General Peter Koren also notes that companies counting on CSR tend to have more loyal employees and gain more of the public’s trust (incl. NGOs). Moreover, the market increasingly demands stock exchangelisted companies to provide CSR as an asset.
“CSR is no ultra-sophisticated feature but a sound management tool to help companies put their social responsibility into practice,” says Koren. Four years ago, the TRIGOS Award of the CSR platform “respACT austria” was founded to honour Austria’s most sustainable enterprises. Also OMV, Österreichische Kontrollbank and ERSTE-Sparinvest KAG have been among the winners.
Next step: Sustainable Management System
The Austrian Institute for Sustainable Development (ÖIN) dedicates its work to linking CSR theory with practice. ÖIN Chief Executive Alfred Strigl views CSR as a four-stage process comprising Response, Risk Prevention, Innovation Management (such as technical innovations contributing to sustainability) and Stakeholder Management (with the company assuming social responsibility). Standardisation based on the criteria of the Global Reporting Initiative (GRI) allows to draw up a comparison of CSR efforts in the companies.
The recently concluded ÖIN project “Sustainable Management System” (SMS) has proven particularly useful for companies willing to incorporate CSR. The idea is to set up a sustainable management system in the business based on specific parameters. Below are the key aspects which ÖIN experts focused on during their work:
- using the core management concepts such as sustainability programme, key parameters and sustainability report to develop an SMS;
- implementing the SMS model in business practice (four companies from different branches of industry, one of them Poloplast);
- customising and testing a web-based software programme (SoFi) needed for sustainable management and for the sustainability report;
- revising the contents of the guidance “Reporting about Sustainability”;
- drafting a practical handbook on sustainable management.
In the course of the joint project, Poloplast has developed a system of value-based management – SPIRIT – and revised its Sustainability Report according to GRI criteria (G3). This makes the company again one of the CSR pioneers in the country. Poloplast has decided to replace its Annual Report with the standardised Sustainability Report. Poloplast CEO Wolfgang Lux is not overly concerned about the additional cost resulting from value-based management. He views the new Sustainability Report as a part of the company’s Benchmarking Scheme and CSR in general as an investment into the future. Collaboration with ÖIN has cost Poloplast “a few thousand euros” (Lux). Other less sustainably managed companies would have to dig deeper into their pocket to “rid their cupboard of skeletons”, Alfred Strigl said. After all, CSR also requires taking concrete actions!
(Source: aqua press Int. 3/2007, Mag. Christof Hahn)
