The CSR business model is at a historic confluence between the business commitment to address social needs profitably, the rapid expansion of Asian economies and the spread of social media. CSR 3.0 is upon us and it has the potential to transform business in society, especially in Asian countries.
The central concept of “CSR 3.0” is integration – true and total integration of companies’ strategies and actions up and down the value chain, from risk management and cost control to market development and license to operate. In short, CSR is now becoming recognized as a means of addressing a spectrum of stakeholder expectations that has a direct impact on improving profit and increasing shareholder value.
And at the centre of this transformation is what public relations professionals understand and implement best – two-way communications. “3.0” integration is likely to lead companies in the near future in two critical functions: integrating financial reporting with governance and environmental reporting, and social media which is moving from monolithic push strategies to more open broadcast approaches facilitating multi-way dialogue.
The CSR Opportunity in Asia
The rapid economic expansion in Asia, which coincides with the latest CSR evolution, provides a unique opportunity for Asian companies. China is already setting a high bar in CSR development.
On the financial front, Business For Social Responsibility has reported that the Aegon-Industrial Fund, the China Securities Index and CCB-Principal have created a Socially Responsible Investment fund or index. The growing number of Chinese companies that strategically manage Environment Social Governance (ESG) issues should create fundamental opportunities and an impetus for increased ESG investment.
CSR professional organizations are also developing rapidly across the region. The United Nations Global Compact (UNGC) is a leading vehicle for cooperative progress. Among the Global Compact’s 90 regional networks around the world, the organization services six current Compact networks and two in development in Asia.
Recent news on the Global Compact in China underlines how the country is in many respects leading the way regionally. The UNGC network in China was established in 2009 and already has 226 participants. The great majority of these members are in the Chinese private sector, although NGOs, business associations, academia and cities are also represented.
Although the Chinese socio-political system and culture do not overtly encourage widespread use of social media, Chinese UNGC leaders are applying several other advanced CSR measures. These include tracking CSR performance of subsidiaries, CSR reports in host countries outside of China, and use of reporting standards.
Chinese members are taking responsible roles in the Compact’s global organization well beyond their region and two minister-level Chinese executives have joined the UNGC Global Board.
The PR Challenge
“CSR 3.0” presents PR with a new horizon – that of becoming the stewards of this critical management function. Genuine CSR requires total commitment by a company. No one single department owns it. A company’s reputation is built and maintained by what it (and everyone within it) does on a continuing and long-term basis.
This means that industry professionals operate – or should operate – at the interface between the organization and its stakeholders. This will build, generate and nourish two-way communications which in turn build reciprocal relationships.
By John Paluszek
senior counsel, Ketchum