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The powerful impact of workplace culture on Corporate Social Responsibility

In our world of constant change, organisations face various challenges related to future sustainability. However, many of these challenges are not new. It is rather that they are now increasingly being addressed, especially in times of COVID. One of them is the question about the social and environmental, but also long-term economic internal and external impact of an organisation's activities, in other words: how to operate sustainably. So is sustainability just about altruism?  No, and it can also be actively shaped - through workplace culture.

Corporate Social Responsibility - or what organisations contribute to sustainability

Organisations operate in a social and ecological context and their activities are shaped by environmental factors. Therefore, issues related to sustainability - for example Corporate Social Responsibility (CSR) - are becoming increasingly important and are taking on a greater role in corporate governance. But what exactly does CSR mean? While there is no universally accepted definition of CSR, corporate social responsibility is typically understood as a company's voluntary contribution to a sustainable development that goes beyond legal requirements.

For example, by ensuring sustainable procurement and production of materials, both nationally and internationally. Or by adopting a sustainable approach to their business strategy. CSR thus concerns both socially and environmentally conscious activities and behaviour.

The Swiss Confederation is committed to setting a good example in achieving more sustainability. An analysis of the Confederation's CSR activities identified 5 roles and a total of 12 dimensions that are aligned to the UN Principles for Sustainable Development.

 

EN CSR table

 

One of these roles focuses on the Confederation as an employer, with dimensions in regards to employment and working conditions, diversity / equal opportunities, safety and health at the workplace employee development. Here we can already see some evidence of workplace culture. All these dimensions contribute to an organisation operating more responsibly – not only towards the environment but also towards their employees and the society.

The value of sustainable behaviour in business

Today, companies and their success are no longer measured only by financial performance indicators, but also in terms of their relationships with customers, employees and stakeholders, as well as their impact on nature and society. In a study with over 11,000 executives, Deloitte was able to show a fundamental shift from "business enterprises" to "social enterprises". While the focus of "business enterprises" is mainly on profitability, "social enterprises" are organisations with the mission to be socially responsible and to shape the environment in a supportive and cooperative way. 

The fascinating thing: measures for more sustainability have a positive effect on corporate success. In a 2011 Harvard Law School article on corporate governance, Matteo Tonello shows that CSR can indeed be a competitive advantage. As one example, there are lower churn costs and less absenteeism associated with equal treatment policies and practices, as morale is boosted. It also significantly improves employee recruitment and retention. Likewise, also customers reward those organisations with their loyalty that treat employees in a fair manner. Brand loyalty would thus be increased. Furthermore, a meta-study by Claremont College showed a direct correlation between the Dow Jones Social Responsibilty Index and profitability. And a long-term study by the Financial Times Press concluded that organisations with a focus on purpose outperformed their peers by a factor of 8 in terms of share value.

How workplace culture impacts CSR

Despite the proven correlation between CSR and corporate success, only 18% of respondents in the above mentioned Deloitte study said that CSR was a top priority and part of their corporate strategy. Fragmented programmes that have little impact when detached are particularly problematic. What is needed is a unified, understandable and authentic strategy that shows who the organisation is and what it does. But this cannot be achieved without a functioning workplace culture. And for a workplace culture to work, it needs trust. The evidence-based methodology of Great Place to Work shows that trust is based on the dimensions of respect, fairness, pride, team spirit and credibility.

Diagram Trust Model2Only in this way can organisations take the step towards an integrated and, above all, credible strategy that facilitates CSR measures. Once a trust-based workplace culture is established, it has a positive side effect that helps to counteract the fragmentation described above: it reflects the sense of purpose of the organisation. This purpose not only helps employees to identify with the values and mission of the organisation, but also strengthens the bond with them. For instance, employees are 5.3 times more likely to stay with the company if their values are aligned with those of the organisation. Or to put it in other words: employees will be clear about why they are doing something and will want to commit to it within the company. And the commitment comes from the certainty that they are being trusted in this company.

Trust and shared values thus seem to be the key to inspired and motivated employees who actively engage. Organisations in turn benefit from this engagement to generate both economic and social value.

 

Are you ready to develop your workplace culture? 



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