CSR approach

Engaging your company in a Corporate Social Responsibility (CSR) approach, what are the advantages for an SME?

For some, a company is an organization primarily intended to generate profit for its shareholders. The American economist Milton Friedman, Nobel laureate in economics, thus affirmed in a famous article in the New York Times in 1970*, that the sole responsibility of a company is to maximizing shareholder profits. However, a debate does exist about the nature of corporate responsibilities, beyond the sole objective of generating profits.

Other authors, such as Dodd and Bowen, included in a Senate briefing report**, affirm in the first half of the 20th century that the company also has a “social responsibility”.

It is because we are in favor of Dodd and Bowen's thesis that we help our customers to start their ecological transition, easily and at our expense, via our various services (Carbon Photo, Planet Dividend, solutions to reduce your emissions, voluntary carbon compensation).

What is CSR?

This Corporate Social Responsibility (or Social) (CSR), the European Commission gives the following definition: “thevoluntary integration, by businesses, of social and environmental concerns into their business activities and relationships with stakeholders ” ***. In other words, CSR aims to combine, at the level of a company, economic viability and a positive impact on the environment and society, two dimensions that may appear (wrongly?) as contradictory.

More specifically, the ISO 26000 standard identifies 7 central questions that make up the concept of CSR:

the governance of the organization,
human rights,
relationships and working conditions,
the environment,
the loyalty of practices,
consumer issues,
communities and local development.

Historically, CSR policy has mostly concerned large companies.

Large businesses need to comply with certain legal and regulatory obligations, which increasingly cover various ESG issues: publication of a greenhouse gas emissions report (BEGES), extra-financial reporting (in particular via European NFRD regulations, which are currently under review), or even duty of care vis-à-vis subsidiaries and subcontractors (respect for human rights, corruption, etc.). To date, smaller companies are not subject to such broad obligations.

This CSR approach is costly for businesses, which often have to call on external firms to carry out a GHG emissions report or implement specific control procedures to meet the requirements of the extra-financial performance statement (ESG reporting). Some of them have set up a CSR department, entirely dedicated to monitoring these subjects internally, and whose missions may vary, depending on the ambitions of the company and the scope of this team. Its missions may vary, ranging from developing materials to raise awareness of CSR issues for staff, looking for partners to reduce the company's environmental footprint, or even the production of GHG assessments and extra-financial reporting (if the skills are combined within the CSR department).

This additional cost seems more affordable for large groups, with greater financial and human resources, than for SMEs with more limited resources.

The CSR commitment is bearing fruit: up to +15% in performance

The good news is that efforts made by big companies are rewarded. Indeed, according to several studies, ESG commitment and performance go hand in hand. Thus, the implementation of CSR practices leads to a performance gain of at least 10% (and up to 15% if one measures the profit per capita), according to a France Strategy study published in January 2016. This outperformance is also reflected in the stock market price, as indicated by a study by Bank of America, which observes an outperformance of 5 to 10 percentage points of the companies most committed to CSR compared to the benchmarks.

Like large companies, SMEs can benefit from a CSR policy many advantages

SMEs, like large companies, have many benefits to derive from their CSR commitment.

Anticipate regulatory changes: By measuring their GHG emissions now, SMEs anticipate regulatory changes possible: while the obligation to publish a Greenhouse Gas Emissions Report (BEGES) only concerns private companies with more than 500 employees, several initiatives are pushing for an extension of this obligation to SMEs. This measure was thus proposed by the Citizens' Climate Convention and the credits for the recovery plan will be subject to the measurement of carbon footprint emissions.

Gaining market shares: By adopting a CSR approach, SMEs gain market share (or simply preserve them). More and more large groups and public entities, themselves subject to CSR obligations, are integrating so-called ESG criteria into their supplier and subcontractor selection processes. These increased customer requirements may lead to the elimination of suppliers (often SMEs) who are the least committed or the lowest rated by ESG rafting organizations. For example, large groups must report on the control of their supply chain (large groups are expected in particular on the following points: working conditions and respect for human rights among subcontractors, environmental impact of suppliers, etc.).

Strengthen its brand and make it shine among customers and talents: By making its commitment and making it known, SMEs retain their customers and make themselves more attractive to their employees and future talents and young graduates. Students are in fact more demanding of employers and expect ESG issues to be taken into account (as evidenced by the “Student Manifesto for an Ecological Alarm Clock”, signed by more than 30,000 students).

Increase the strength of their economic model and improve its resilience: By taking stock of ESG issues, and in particular climate issues and associated risks (physical risks, transition risks, reputational risks or even liability risks), SMEs can identify the transformations necessary for the transition to a low-carbon model. This transition will require multiple strategic adaptations (eco-design of products & services, integration of possible carbon pricing, etc.), which are preferable to launch voluntarily and to turn them into opportunities rather than to suffer them as constraints.

Territorial anchoring: The CSR approach also allows a company to anchor itself in a territory, by creating close relationships with local stakeholders (community/department/region, schools/universities, supplier/customer ecosystem) and to reinforce its social acceptance.

Keewe, a tool for your company's CSR approach

The environmental dimension of CSR is gaining momentum due to increased awareness of climate issues, resulting in particular from increased media coverage and greater demand from citizens and consumers (especially among younger generations).

This is the whole spirit of Keewe, which provides its customers with the tools they need to launch your transition process. And your transition is at our expense!

Keewe provides its customers with the Carbon photo to easily measure your GHG emissions, in order to align you with the likely changes in regulations applied to SMEs. With Carbon Photo, you will identify your main sources of CO2 emissions and therefore your carbon exhibition/dependence, to be taken into account in your ecological transition strategy (how to reduce this carbon dependence? how do you turn it into an opportunity?).

In addition, via the Planet dividend paid by Keewe, you can finance your transition low carbon.

Finally, Keewe will provide you with communication tools needed to let your partners know your CSR commitment (customers, employees,... etc.), in particular on environmental issues.