The last time you picked up a newspaper, the chances are it contained a story about a large corporation ignoring the needs of individuals and local communities. The article would also have mentioned the public outcry that followed. Sound familiar?
In Australia, the organisations most often seen as the ‘bad guys’ include the Big4 banks, health insurers, property developers, mining and energy companies, and supermarket chains. The decisions they make can create issues that polarise public opinion.
For example, Adani’s proposed Carmichael Mine in central Queensland has come under fire on many fronts, including its handling of the management of endangered species on the site, including the black-throated finch. One of the issues here is that experts disagree on the best way to avoid causing the bird to become extinct. Claims were also made that Adani grossly mismanaged their consultation and communications processes. (Although the company disputes this.)
We can’t blame every organisation for every issue that occurs in their industries, however, many get ‘tarred with the same brush’ by the public due to the outrage sparked by the actions of the few. Even those organisations that have done nothing wrong are tainted if they do nothing to prevent or help the situation either.
What causes community outrage?
Some organisations are caught by surprise when faced with a public backlash surrounding their actions.
Even if their forecasts show the activity would be profitable and achievable they can still generate community outrage if they haven’t fully considered the viewpoints and values of all the affected stakeholders.
Sometimes, public outcry isn’t the result of a single action, though. It may build up over time as more people become aware of the issue or as social values change. For example, before most of us became aware of the plight of the caged birds on egg farms, only a few of us were prepared to pay for free-range eggs. Now, free-range eggs have the greatest demand.
Community outrage can also arise from a lack of public consultation and engagement or poor communication with relevant parties. The intensions may be good and the environmental and financial research sound, but if the community doesn’t want or understand a proposal, it is likely to meet heavy opposition and lead to increased costs and delays, if not total rejection.
How to get social responsibility right
To gain public acceptance and avoid threats of community outrage, organisations need a social license to operate (SLO). This refers to the level of community approval or acceptance needed to obtain support for an organisation’s proposed or current activities. This licence can’t be bought or granted through any formal process, it can only be earned through action.
Some of the factors that can influence community views and expectations of an organisation include:
· The level of trust and transparency in the organisation or sector.
· The organisation’s past performance in areas such as environmental and personal health and safety.
· The organisation’s actual and perceived level of consultation and engagement with local communities, affected stakeholders, and related parties.
· The willingness for the organisation to support local communities in other ways, such as sponsoring local events.
· The commitment of the organisation to align all their internal policies with their social values.
The good news is that many organisations in Australia have finished with L and P plates and have earned their full social license. They are doing much more than just ticking a box to say they have done ‘that social responsibility thing’ and leaving it to gather dust. Instead. corporate social responsibility (CSR) and corporate philanthropy are thriving here.
How do businesses address their responsibilities?
According to the Giving Australia 2016 report, the main way that businesses help their local communities is through the giving of money, goods or services to not-for-profit organisations (NPO’s) or directly to local individuals and organisations. Some of the reasons businesses list for this are:
· That the owners or executives believe it is a good thing to do, irrespective of business returns.
· That it demonstrates their commitment to the local community.
· That there is a personal connection between the owner or staff and the relevant cause or NPO.
· That it encourages consumers, employees, and suppliers to want to work with them.
However, giving money isn’t the only way that businesses are earning their social licence to operate. Many address their social responsibilities from within their organisation, too. Some of their strategies include:
· Only dealing with socially responsible suppliers such as clothing manufacturers or organic food producers.
· Designing products or services to address unmet needs. For example, creating online platforms to bring telehealth services to remote communities.
· Creating inclusive employment, and promotional practices and ensuring that these practices are effective.
· Providing opportunities for employees to volunteer their time to support local causes or organisations.
Who is leading the way and what are they doing?
The 2016 Annual Review of the State of CSR in Australia and New Zealand study, complied by The Australian Centre for Corporate Social Responsibility (ACCSR), revealed the Top 10 Australian organisations in this area. Yarra Valley Water was one of the organisations to make this list.
This organisation, based in Victoria’s south-eastern regions, has community engagement at the core of all its projects and initiatives. They have set up a community advisory group, community panels, and market research projects to ensure that they create solutions of mutual value. Click here to see the other ways that Yarra Valley Water implements its many socially-responsible practices.
Another example is United Energy, one of Melbourne’s main electricity suppliers. Their head office is close to Pinewood Primary School, which participates in the Victorian Government’s ResourceSmart Schools program. This program helps schools become more sustainable by minimising waste, saving energy and water, providing biodiversity, and reducing greenhouse gas emissions. United Energy is a major sponsor of this program in the school and is committed to supporting Pinewood on its sustainability journey.
If you look around, you’ll find plenty of other organisations doing everything they can to make a positive difference in their community. Would you like to join them?
What can your business do to boost its social responsibility?
· Choose a specific social challenge to address and create targets around it. Solutions must address the real issues and involve the people it affects.
· Engage your staff and the community at all levels right from the start. Ensure that everyone is working together with the same objectives.
· Blend all your business goals strategies with your social objectives so that there are no areas of conflict.
· Utilise technology to drive social change within your network. Link to ep 26 article
· Create positive models that others can follow. For example, make changes at a local level and then help your clients or branches in other areas to follow the process in a way that addresses their specific needs too.
You may feel that it is too hard or too late for your organisation to generate social change in any way. However, Katherine Teh-White, founder of the social change and sustainable innovation consultancy firm, FutureEye, will tell you otherwise.
According to Katherine, “Lots of things are possible for reinvention if we create a drive within ourselves to do business differently.”
Call to action…
Recently, Katherine Teh-White was interviewed for a podcast on The Mentor List. Katherine’s pioneering social licence to operate methodology has improved the corporate responsibility for a broad range of industries including, food, water, energy, mining, and pharmaceutical. She has worked at many different levels from sites to national and international supply chains when there are reputational, political, regulatory, and technical challenges.
Katherine is a board member of the Castan Centre for Human Rights at Monash University and sits on the advisory committee of the Research Unit in Public Cultures at the University of Melbourne. She has been a director on a series of boards and has won a number of awards including the Golden Target award from the Public Relations Institute of Australia (1994), Telstra Business Woman of the Year private sector awardee (2001), and Victorian Women’s Honour Roll (2003). She has been listed in Who’s Who of Australian Women from 2007 and has been and advisor and mentor in United Nations programs. This lady lives and breathes corporate social responsibility!
Tune into the interview today to hear Katherine’s views on where organisations have gone wrong with managing their social responsibilities and how strategies can be formed or reshaped to help create positive models with long-lasting benefits for all concerned.
Kick start your personal journey to success from the conversations David has with his inspirational guests on The Mentor List. www.mentorlist.com.au
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