For the greater good

by Jenny Nobbs

The increasing prominence of "corporate social responsibility" through its use as a marketing tool by the larger firms and the wider business community

The Journal, September 2004, page 26

For most of the past century, there has been heated debate concerning the role business should play within society. Is a company’s primary obligation, to its shareholders, or should business be a force for positive social change? However, since the 1970s, an alternative view has formed which contends that these two opinions can in fact be complementary – in other words, a company’s social performance could mean good business.

The idea of a business giving back to society has come to be known as “Corporate Social Responsibility” (CSR). CSR can be defined as minimising the negative social, environmental and human rights impacts of corporate activities and influences, whilst enhancing the benefits that companies can bring to society. CSR is ultimately based on the need for corporate accountability and compliance with standards that reflect society’s values in general and the concerns of the stakeholder in particular. There are two dimensions of CSR – the internal dimension comprising human resources, health and safety and restructuring, and the external factor which involves local communities, business partners, human rights and environmental concerns. Practical examples of CSR would be setting up an environmental programme within a company, or performing pro bono work. CSR is often used interchangeably with the phrase “Corporate Community Involvement” (CCI). CCI is a narrower concept which focuses on relations between a company and the community. It concerns programmes which are mutually beneficial for both the company and its community, such as employee volunteering, cause-related marketing and community partnerships. It follows that CSR naturally encompasses CCI.

Predictably, the movement began in America where CSR and CCI programmes have long been established. In the UK legal sector, City of London firms have been prominent: many have implemented community projects and undertaken pro bono work for disadvantaged groups for a number of years. Whilst Scottish firms have performed similar pro bono work, the tendency has been to not actively advertise this fact. However as the concept of CSR becomes increasingly entrenched – prompting firms to increase their commitment to the community – there has been a corresponding increase in promoting and marketing these commitments for the commercial benefits they can achieve for a firm.

It is unsurprising that the large commercial firms in Scotland, which have the marketing budgets for such work, have been at the forefront of the movement to contribute and also to promote the CSR undertaken.

Many forms, one concept

There are a huge range of CSR activities and policies that firms can choose to implement. DLA for example, has a CSR programme in place which encompasses many different strands. The current activities staff can become involved with include “employee volunteering days” which focus on environmental or regeneration needs within the local community, literacy and numeracy projects involving primary school mentoring, fundraising commitments to Maggie’s [cancer care] Centres and business mentoring for start-up businesses in association with the Prince’s Trust. There are also key community partnerships with the Prince’s Trust and Scottish Business in the Community in place.

Shepherd+ Wedderburn have a comprehensive community policy, including an annual commitment to two charities – currently Barnardos and Enable – to undertake and support a variety of projects, a partnership with the National Museums of Scotland as the firm’s “Annual Arts Partner”, “dress down days” with staff donating a pound to various charities for the right to come into work in casual dress, and a firm environmental policy which has an elected “Green Team” to promote recycling amongst staff.

Many other firms have CSR programmes in place. Morton Fraser, for example, has decided to celebrate its 175th anniversary by a large programme of fundraising for the Prince’s Trust, which includes a McGonagall dinner – running pudding to starter – at the Signet Library this month. Burness actively supports the arts by sponsoring a number of exhibitions for both established and up-and-coming artists; a number of the firm’s partners sit on boards of charities on a pro bono basis; and there is an environmental policy in place. The firm is currently examining the possibility of setting up a charitable fund to be administered by staff and working with a charity in a “knowledge” project geared to developing staff skills. Brodies undertakes pro bono work with organisations such as the Citizens Advice Bureau, Scottish Business in the Community and Young Scot. Ledingham Chalmers has a charity fund set up within the firm, which donates to a number of different causes. Maclay Murray & Spens made a donation to Meningitis Research, instead of sending the annual firm Christmas cards. Employee volunteering is also beginning to gather pace – for example, McGrigors designed a recent community regeneration project which offered staff the opportunity to help to paint a local school, in the firm’s time.

Sponsored team events such as the notoriously tough 54 mile “Caledonian Challenge” hike, and “Maggie’s Monster Hike and Bike” – a 30 mile cycle followed by a 40 mile walk (see inset photo) – are also becoming increasingly popular, with employees at various firms forming work teams to raise money for charity. Some firms create their own sponsored event – for example, DLA’s “Wellchild Walk” from John O’Groats to Lands End saw over 70 employees walking part of the route to raise funds for the charity.

Measuring the return

So, what kind of benefits can be achieved for the firms which undertake CSR? It is notoriously difficult to quantify these, as it is impossible to attach a clear value to some of the intangible assets CSR can provide, such as goodwill. However many studies indicate that the business case is indeed a strong one. According to the Department of Trade and Industry an increasing number of companies of all sizes are finding there are real business benefits from contributing to society. In May 2003, the DTI and “Forum for the Future” hosted a workshop for business leaders, academics and government to debate the case for CSR, the broad conclusion being that social commitment makes a positive contribution to business success.

The law firms which run CSR programmes readily acknowledge that these programmes are expected to bring both long and short term commercial benefit. According to “Business for Social Responsibility” in the US, being socially responsible can improve financial performance, enhance brand image and sales, attract and retain a quality workforce, improve decision making on critical issues, help manage risks more efficiently and reduce long term costs. On a smaller scale, community events and employee volunteering often receive a lot of publicity in the local media. Not only do these types of activities help to raise a company’s profile, but they begin to build a positive association in the public’s mind, effectively branding the company as one that is not driven solely by profit.

Six pointers to success

Research into the business benefits of CSR can be divided into six categories: licence to operate, customer marketing, human resources, reputation, innovation/market development, and corporate financial performance. The “licence to operate” aspect can be thought of as creating a “goodwill bank”, which increases the community’s support for the company’s operations. It is also thought to lower costs through the reduced risk of litigation. The value of customer marketing lies in increased customer attraction and retention, with a reduction in costs through positive media coverage and word of mouth – otherwise known as free advertising.

In terms of human resources CSR can lead to enhanced professional development, increased productivity and the development of a more diverse workforce. Events in which employees work together to raise money for charity, such as the Caledonian Challenge, undoubtedly foster team spirit, which can certainly translate into more effective working relationships. Sally Clark, an assistant at Shepherd+ Wedderburn who took part in the 2003 Caledonian Challenge, feels teamwork was essential to success: ”I don’t think I would have got through it without everyone rallying round to keep each others’ spirits up and encouraging all of us to make it to the finish line. You get to know people of all levels, who you wouldn’t otherwise have, so next time you deal with them in a work context it is much easier.” Marketing manager David Wallace agrees that employees can gain a great deal: “Events such as these can build real teamworking skills as people work together to achieve the same goal. These skills can be transferred to the workplace and can lead to more positive working relationships. This in turn creates a more satisfied workforce, which can improve long term staff retention.”

The reputation factor simply means the reputation of the company is raised amongst the stakeholders and potential investors. The innovation/market development value stems from an enhanced knowledge of markets – many people may work on a community project and important contacts can be made and new information gained. Business mentoring is a clear example of this: lawyers who give free advice to start-up businesses stand to gain themselves from making new contacts and acquiring an understanding of individual businesses and sectors. Finally, it could be argued that CSR, with its emphasis on giving back, is particularly relevant to lawyers and the image society has of them. Philip Rodney, a partner at Burness, feels that one of the benefits of undertaking CSR is professional development, as “having a strong ethical code is a key part of being a good lawyer”.

There are therefore many different ways that law firms can implement CSR, with trends of an annual commitment/partnership with one or two charities, employee volunteering and team events emerging. Smaller firms which may not have the resources to invest in large charitable projects can perform pro bono work or get involved in community projects such as the Law Society of Scotland’s Scottish Schools Law Project, which involves a law firm nominating a school to receive quiz-based classroom materials so pupils can learn more about the law. Internal policies, such as recycling programmes and work/life balance policies can also achieve CSR. With the “win win” result of making a positive contribution to the community whilst achieving commercial benefit, it is likely that CSR will continue to grow in importance, both in the general corporate culture and the Scottish legal profession.

Jenny Nobbs has just completed her traineeship at Shepherd+Wedderburn

For the greater good

The increasing prominence of "corporate social responsibility" through its use as a marketing tool by the larger firms and the wider business community

Many forms, one concept

Measuring the return

Six pointers to success

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