CSR policy: Why should it be data driven?

Data driven CSR policy
September 27th, 2022
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The environmental crisis, combined with the growing demands of regulations and stakeholders, is driving organisations, both private and public, to accelerate their ecological transition. Central to this approach is your company’s CSR (Corporate Social Responsibility) strategy, which must be driven with the use of data. This is the way that companies can assess their CSR maturity, make the right decisions, and share their results with stakeholders.

Data, a fundamental pillar of the CSR policy

The world is set to become more volatile over the coming years and decades – from climate change and migration to geopolitical uncertainty and growing inequality. This is why we need reliable data to understand the state of the world and to be able to act accordingly,’ we were reminded by Federal Councillor Alain Berset, head of the Swiss Federal Department of the Interior, during the opening ceremony of the United Nations World Data Forum 2021.

Data is the leading tool in the sustainable transformation of companies. By collecting, reviewing, and analysing data, companies become able to make informed decisions, to develop the appropriate action plans, to implement them and to mobilise their resources intelligently. Because the modern issues in question are particularly complex (climate change, diversity, inclusion, business ethics, etc.), it is imperative to break away from any cognitive bias. As such, 81% of CSR decision makers acknowledge that they could make better decisions about climate change if they had access to data-based reports[1].

This is why this data must come from a real materiality assessment. This is exactly how companies can implement an effective and relevant CSR policy in line with their business challenges as well as being able to assess their progress in this area.

What is a materiality assessment?
Recommended by the International Integrated Reporting Council (IIRC) and the Global Reporting Initiative (GRI), materiality assessments are designed for establishing a relevant hierarchy of the issues that need tackling by a company’s CSR strategy, taking into account both the company’s priorities and the expectations of its stakeholders. This tool therefore operates at the midway point between business and sustainable development issues.

With this approach, carbon dioxide emissions lie at the top of the priority list. While the European Union has committed to adopting climate neutrality by 2050, many companies have set themselves the same mission, by working on reducing their own carbon impact. ‘A company’s carbon footprint is the most important key performance indicator of our century. We believe that it should be treated as such and integrated into all of the KPIs for each company. Just like we use technology to track our marketing or financial KPIs, it makes sense to do the same with carbon emissions.’ adds Anna Alex, cofounder of Planetly.

Data, as tangible proof of fulfilling customer expectations

Most consumers make more conscious decisions about what they buy, and especially which companies they buy from. They prefer companies whose activities are kind to both the environment and people, but they also include sustainable criteria in their purchases of products and/or services such as considering products designed from biosourced materials, concentrated formula, refurbished or used products, those with low power consumption, rechargeable products, etc.

Customers expect genuine action and tangible evidence of it from companies:

  • 86% of consumers say they have changed their mind about buying a product because they felt the company was not devoting enough energy to combat climate change[1];
  • Two thirds of consumers plan to demand proof of efforts to combat climate change in the next three years[1];
  • 79% of consumers believe that if it becomes public knowledge that a company has had the opportunity to make data-driven green choices, but has done nothing about it, this can cause serious damage to its reputation or business, even going so far as ruining it[1].

It is important to remember that these new requirements come just as much from customers as from other stakeholders such as investors, partners, and new talent. A new era is dawning. Tomorrow, the social and environmental commitments of each organisation will be thoroughly scrutinised, especially through their CSR reports.

A good margin of upcoming progress

Today, companies are still struggling to use data to support their CSR policy. Only 22% of CSR decision makers believe they use all the data at their disposal to help with decision-making[1].

Companies are encountering two main types of obstacles:

  • The lack of direction in their own structure or in their particular business sector;
  • A certain lack of available data.

As for the companies that do manage to collect data, they still need to assess its relevance, analyse it, model it, create scenarios and learn the right lessons. And to achieve this, they need the appropriate search resources, including tools.

CSR is now a major consideration for companies, and goes far beyond targeting profit and regulatory compliance, to help foster sustainability in the society. Using data, companies have the ability to direct their strategy and the management of their projects so they can better contribute to their overall performance, e.g. from an economic, social and environmental standpoint.

[1] Exasol, People, Planet, Data: Why climate change action and CSR have to be data-driven, 2021