What’s CSR Got To Do With It? #5

Four weeks ago I started this series of blogs in the lead up to the itSMF Australia National Conference being held on 23-25 August at the New Melbourne Convention and Exhibition Centre.

My keynote presentation at this years conference is entitled:

What’s CSR Got To Do With IT?

IT Service Management and Corporate Social Responsibility

You can access the full conference programme at the itSMF website here.

This is post #5.

In the previous posts we looked at the link between CSR and IT and why it is so high on the CEO agenda. We looked at what it means to the CIO and where the pressure to respond to the demands of CSR was coming from.

Post #3 suggested that there are four key areas that the CIO should have on his/her agenda in order to underpin the agenda of the CEO in relation to CSR.

These are integration; transparency;  employees and green IT.

This week I will look at the second of those – transparency.

Customers, suppliers, employees, government, NGOs, and advocacy groups all want information about the organisation – its practices and behaviours.

They seek it from the internet and other sources above that provided directly by the organisation on its corporate website, annual reports and so on.

The challenge for organisations is the ability to respond to this visibility. The best response is transparency. There is a marked increase in both information requested by advoacy groups and information provided by business indicating that transparency is in fact tracking to visibility.

An IBM research paper issued in 2008 showed that there was an information explosion taking place over the past three years.

This trend has continued to grow  at an increasing pace.

Of all the organisations surveyed:

  • 75% said the number of advocacy groups collecting information on their business has increased in the past 3 years.
  • 75% have also increased the amount of information they provide about the sourcing as well as social and environmental impact of their products and services and operations in the past 3 years.
  • A full 63% believed they have sufficient information about the sources and composition of their products and services to satisfy customer concerns.
  • Yet, two thirds of those same organisation’s leaders admitted that they don’t understand their customers CSR concerns well.

IBM said that this disconnect suggests that most organisations are either simply confident of their ability to meet regulatory requirements or, at best, guessing at what customers expect.

As information is the key to transparency, this trend is going to have a big impact on CIOs and IT. They are the providers of this information and have to ensure its accuracy, reliability and relevance.

Communicating compliance with regulations, according to IBM, will require quantifying, analysing and reporting such details as:

  • Carbon and environmental impacts, including water and waste management and recycling efforts
  • The conduct of a vast number of suppliers on issues ranging from labour standard to fair trade
  • The sourcing and content of each product and component (IBM, 2008)

To accomplish this, CIOs will need a variety of measuring, monitoring and reporting tools. They will have to achieve traceability across the supply chain, for example, by using radio frequency identification (RFID) and predictive models for supplier compliance. Companies with hundreds or even thousands of suppliers will need technologies to manage risk around their supply chains and to make sure that suppliers adhere to agreed-on ethical and environmental standards.

CIOs will need to adopt governance and transparency strategies designed to ensure that they get the right information to the right people at the right time. (IBM, 2008)

The CIO is in effect – the Carbon Information Officer.

In addition to the pressure of provision of accurate, reliable and relevant information is the existance of the “Green Marketing and Trade Practices Act” put in place by the ACCC in 2008.

It was produced to stop bad behaviour before it got out of hand according to Graeme Samuel – Chairman ACCC. It was a reaction to organisations overselling, under delivering and potentially misleading conduct that was given the term “Greenwash”. Greenwash encompassed misleading claims about the green, eco, sustainable, carbon neutral and /or planet-friendly status of a product, service or the organisation as a whole.

Greenwash-like behaviour is being actively monitored by the ACCC and they will take legal action against organisations found to be guilty of misrepresentation.

The ACCC, consumers and competitors can all take legal action if an environmental claim potentially breaches the Act. The business or person making the environmental claim in contravention of the Act can be sued for damages.

The ACCC’s enforcement powers and remedies are extensive and include monetary penalties of up to $1.1 million for companies and up to $220 000 for individuals, as well as injunctions, adverse publicity orders, corrective advertising orders, community service orders and ancillary orders of various kinds.

These orders are wide ranging, and will generally vary depending on the circumstances and conduct in question.

The CIO will be called upon to ensure that the data collected and information being provided in regards to the organisations performance against its CSR is accurate beyond question and that every claim can be substantiated and qualified.

The CIO does not want to be responsible for the impact of legal action on the organisation not only from a financial perspective but more importantly an adverse impact on reputation and brand across all stakeholder groups.

In my next blog I will explore the third item on the CIO agenda – employees.

Karen Ferris is a Director at Macanta Consulting.

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