Ian Bruce, VP and Principal Analyst
CSR in B2B companies has moved beyond feel-good corporate events and team tree-planting. Although many leaders recognize the importance of CSR, some still see it as obligatory, rather than essential. On this week’s episode of What It Means, P and Principal Analyst Ian Bruce explains why CSR is a must for B2B firms and how to implement a meaningful CSR strategy.
Bruce starts the episode with a definition of CSR: a management concept in which firms integrate social and environmental concerns into their business operations and the way they interact with their stakeholders. Though CSR isn’t new, its importance to B2B firms has grown in recent years because of pressure from employees, investors, and clients — owing in part to the perception that B2B companies are “the dominant cause and cure for many of [environmental and societal] ills,” he says. Governmental regulation and consideration of CSR principles in vendor selection have compounded the pressure.
Yet while CSR is top of mind for many executives — nearly two-thirds of B2B decision-makers in a recent Forrester survey consider improving it a top priority — many still see it as detached from their company’s core purpose. “There used to be this old adage that … corporate social responsibility was the reason for being beyond profit. And that’s flat wrong,” Bruce says. “CSR should be the reason for being to maintain your profits, to optimize your profits. It gives you permission to operate in society as a business and it gives you the ability to be more effective and efficient in the way you generate revenue and create profit.”
Bruce then describes the differences in approaches to CSR strategy among companies and industries. Companies in the oil and gas industry, for instance, have much to gain from a strong CSR strategy and some are deeply committed. Others, including some tech companies, “are not nearly as up to speed and are trying to figure it out.”
What’s critical for CSR efforts to be meaningful, says Bruce, is that they are connected to the C-suite. In some companies, CSR falls under HR, brand, or other less strategic functions. “CSR needs to gravitate up towards being a function that, as an example, will decide whether your organization is going to continue operations in Russia because of the war in Ukraine. It’s a different level of decision-making,” he says. But it “needs to have tentacles and reach into all of the parts of the business so that it is diffused through the business and just part of the way of working.”
Later in the episode, Bruce provides concrete steps for B2B companies to implement a meaningful CSR strategy. Key to this work, he says, is prioritizing the issues they will act on according to the risk they pose to the business and the degree to which they can effect change in those issues. He closes the episode with a prediction for growth among CSR functions in B2B companies.