Environmental Social Governance and CSR needs to be on a corporation’s and the organisation’s Governance, Risk Management, Compliance and even IT Security agenda. From the top executive level to the local management’s daily work. 

To ensure a holistic approach, the execution and monitoring of CSR activities need to be done with practical guidance, sufficient support and the right tools. There should be triangulation between Identity, Profile, and Image. Identity is what the corporation is, has and will be based on the performance of the CSR activities.

Have an action plan for failures and irregularities

The CSR profile determines how the stakeholders perceive the corporation. The image is the perception of the corporation by society. Essential elements are Tone at the Top and Walk the Talk. When examining how to gain or lose credibility, corporations must consider that it takes years to build up a strong brand and reputation and seconds to erase it.

Risk areas that have emerged on global and local corporations’ agendas have increased, for example, risks such as fraud, corruption, cyber-crime, natural disaster, and corporate social responsibility CSR violations – such as human rights violations. Running a sustainable business requires knowing your corporation’s risks and what is expected of you and your corporation regarding laws and regulations. Therefore, it is vital to work effortlessly to prevent the risk of irregularities, failures and potential CSR issues.

The three components of Corporate Social Responsibility (CSR) 

Environment, Social and Economic issues. Sometimes the three tend to be isolated in their different pillars due to organisational setup or low level of maturity or about focusing sales on economic growth. However, the risks should neither be underestimated nor neglected.

The eye must be raised from an issue level to a holistic view, monitoring combined dangers to identify potential patterns and take further action. The combined risks need to be integrated into the control environment with tailor-made controls in different dimensions. For example, they need to be incorporated into the various high to low-risk businesses and/or regions with a pragmatic mindset and part of the risk governance process. It will not harm the efficiency. Instead, it will be a tool to gear resources and promote transparency.

Third-party risks are underestimated or neglected

The business environment is today much more complicated and integrated. Our expected deliveries and success are highly dependent upon external parties and direct and indirect factors. In that perspective, we depend on third-party business partners, and there are several right incentives to incorporate third-party risks in the risk management process. Unfortunately, it is not rare that these risks are underestimated or neglected.

At the India Corporate Governance Day on the 20th of January 2023, the afternoon sessions will focus on CSR and ESG Issues. Register here: here