July 16, 2009
Authors
Nikki Weston, Former Associate, BSR
Return on investment. It’s the Holy Grail of corporate social responsibility. Everyone wants to make the business link between responsible labor and competitiveness, but how to do it? Actually coming up with indicators that can accurately measure things like the business return on an investment in responsible labor is not a simple matter.
A colleague and I recently finished working on a project for BSR’s DR-CAFTA Responsible Competitiveness Project—an initiative that is working to make the business case for responsible labor in Central America and the Dominican Republic. Through several different projects focused on responsible labor, BSR and our local partners are driving improvement in labor conditions in the region by demonstrating the link between responsible labor and competitiveness.
Our project was to develop an indicator framework that captures the overall impact of the various DR-CAFTA projects. In doing so, we realized that not everything can be reduced to a dollar value. Some of the most valuable assets and biggest risks—such as customer good will, brand value, reputation, and market positioning—cannot be totally quantified. It can be especially difficult to demonstrate a return on investment if the focus is solely on short-term outcomes.
The indicator framework we developed is flexible, scalable, and relevant for all of the different projects in this initiative. This is because we created indicators around different themes and used different time intervals at which these indicators were measured against the themes.
This tool will soon be implemented, and though it still must be tested in the field, I am confident that the resource we made is flexible enough to accommodate any necessary adjustments.
Through this process, we learned some important components of innovation: to think creatively about how to capture the information, to incorporate the views of and impacts on the stakeholders involved (including the affected communities), and to be patient. A focus on the longer-term value and outcomes yields better data.
After all, the collaborative effort, tools made, and projects implemented are a means to an end, as the real goal of the work is to show that a business can be competitive and treat their employees well.
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