While employees may appreciate CSR initiatives, the more authentic efforts will have a greater impact than 'greenwashing,' says a study
While plenty of employers claim to practise corporate social responsibility (CSR), it’s the ones that have authentic CSR initiatives that will see a greater impact on employees, according to a study.
“It’s not just about CSR — ‘Let’s recycle,’ ‘Let’s jump on this bandwagon’ — you need employees to believe that you genuinely care about this, whatever it is you’re doing,” says Magda Donia, associate professor at the Telfer School of Management at the University of Ottawa and co-author of the study. “The key benefits are that if it seems to lead employees to have more positive attitudes at work and higher performance.
“The key there really is an individual’s perceptions: It doesn’t matter what the true, underlying motive is because people can often detect what a true motive is and people make distinctions about what’s genuine and what’s not genuine.”
In looking at the employee outcomes of CSR attributions as substantive (cause-serving) or symbolic (self-serving), the researchers interviewed 371 North American workers in a range of industries, occupations and levels.
“While the economics-based view would make an efﬁciency argument for organizations to engage in symbolic CSR… our ﬁndings underscore the need for organizations to consider the impact of the authenticity of CSR initiatives as signiﬁcant determinants of their employees’ attitudes and behaviours. While symbolic CSR may accrue immediate reputation and proﬁt enhancement from external stakeholders, only CSR attributed as substantive confers valued employee attitudinal and performance beneﬁts to the organization,” said the researchers.
When CSR is seen as being truly genuine, employees tend to become more productive, says Donia.
“Absolutely, because these positive attitudes in themselves are related, too, and we also found performance benefits — and not just performance in terms of self-reporting of higher output at work, but also when people are happy in their work and they have a positive attitude.”
Positive outcomes were found by the researchers in areas such as “organizational identification, person-organization fit, perceived organizational support, trust in the organization, pride in the organization, reduced cynicism and lower turnover intentions.”
Definite benefits to CSR
For those companies that wish to undertake a CSR effort, the effects do show up on the bottom line, says Coro Strandberg, president of Strandberg Consulting in Burnaby, B.C.
“There are longitudinal studies that demonstrate businesses that focus on improving its social and environmental performance out-compete in the long run,” she says. “It is a route to differentiation and a route to competitive advantage.”
As well, expenses can be reduced in an all-out CSR effort, she says.
“Typically, in the Canadian context, the reason companies are pursuing this is for brand and reputation purposes or for social licence to operate, or because CSR practices have been found to reduce operating costs: waste management costs, electric utility costs, fuel costs, reduce turnover, reduction in hiring cost; there’s a high degree of operational benefit to pursuing CSR practices.”
For employers, CSR is no longer a nice-to-have, it’s an expectation, says Donia.
“Corporate social responsibility is profitable, people more and more care, there are a lot of social challenges and environmental challenges and there’s almost like a consensus that they have a say in improving things for society. There’s a lot of incentive to be involved in it and individuals make that distinction for everything that we observe — we are able to make judgments about if people’s motives are genuine or self-serving.”
At Vancity, a member-owned financial institution in Vancouver, CSR is embedded into every aspect of the corporate structure via a “values-based banking model,” says Sharon Norris, director of leadership and organizational effectiveness. “It’s a model that’s designed to enhance the financial, social, environmental wellbeing of our members along with the communities they live in.”
The company went carbon-neutral in 2008 and started offering socially responsible mutual funds in 1986. These and other efforts are reflected high scores on the employee engagement survey when it comes to being a socially and environmentally responsible organization.
“That actually speaks to how employees feel about the purpose of the values here,” she says.
The Body Shop became a certified B Corp in 2019, meaning it’s legally required to consider the impact of its decisions on workers, customers, suppliers, community and the environment.
As well, the company recently introduced two new programs to address the plastic-waste crisis. With one, customers are incentivized to bring back empty plastic packaging so it can be properly recycled, says Hilary Lloyd, VP of marketing and values, North America, at the Body Shop in Toronto. With another, waste collectors in India are properly compensated for their plastic-waste collection.
The company’s programs encourage a shared set of values across the employee base, she says. “Our teams are highly engaged and take pride in our collective CSR efforts.”
Greenwashing not encouraged
But there are employers that engage in “greenwashing,” where a company says that it is reducing its environmental footprint and it isn’t, or it says that it has a green product and the product isn’t green, says Strandberg.
Greenwashing is “marketing green credentials that are not factual,” she says, and these symbolic-only CSR efforts generally fail to motivate employees positively.
The term greenwashing was coined by environmentalist Jay Westervelt after observing companies in the hotel industry, says Donia, where companies may encourage customers to reduce laundry usage but don’t offer recycling in the rooms.
“Is it really about the environment or is it about looking like you’re serving the environment? It’s the idea of just painting it green without actually being green.”
When employers engage in greenwashing, it’s not hard for employees to discover this truth, she says.
“If a company engages in greenwashing for external reputation, profit enhancements, the pitfall is that if employees see it as greenwashing, then it won’t have positive outcomes; it will actually have negative outcomes and these are stronger when CSR is important to them.”
However, every exercise should be applauded or at least acknowledged positively, says Lloyd.
“As long as the promises and intentions are true and respectful, that’s OK. There’s space for everyone to contribute in reducing environmental impact and advocating for social equality,” she says. “Any efforts that align with your business’ core values, which you can focus on authentically, are good CSR efforts.”
HR’s role in avoiding the risks
In implementing a CSR program, employers face many perils, according to Strandberg.
“A risk is not putting metrics against it; a risk is not having targets; a risk is not having it in the incentive program; a risk is not embedding it in job descriptions and not embedding it in performance management, not embedding it in rewards and recognition programs, and not embedding it in who gets promoted in the company and having leaders that don’t walk the talk, and not putting the change-management effort in place that’s necessary for this to be successful.”
Many of the risks are controllable by HR, she says.
“There’s a significant call to action on the part of HR managers to become equipped to understand how to embed social purpose into the life cycle of the employee,” says Strandberg. “HR as a culture driver is the one to be aligning the values to the corporate purpose, helping define what those behaviours are against those values and then helping to develop incentive metrics that cascade into the organization, making sure that the right people are on the bus.”
CSR EFFORTS POPULAR WITH CANADIANS
Canadians who want to work for a company that has a strong CSR program.
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Canadians who say it’s important for an employer to participate in charitable and philanthropic initiatives.
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