Or, to put this question another way, is the corporate sustainability office (and its equivalents) in the wrong box in the organizational chart? Such questions are beginning to surface at many companies, and the answers will not only affect the future of sustainability, but the ability of corporate leaders to manage risks, plan resources, and integrate the green business model for the future.
Following the maxim that “you are where you stand,” location does matter. Placement frames the issues staff face on a daily basis, as well as their line of sight to support the overall business. For example, one would not put sales in procurement or have marketing answer to legal as each of these placements drives behavior and has a major impact on goals and output.
To help companies grapple with this question of location and structure, BSR is launching a short series of blogs on organizational design and internal branding issues associated with CSR. In the process, we will address deeper issues of corporate strategy and development, as well as where sustainability best fits with respect to compliance, planning, reporting, and the bottom line.
So let’s begin with that universal question posed by the rock group Talking Heads: “Well, how did I get here?” The answer for most CSR groups is not by design, but by a series of intermittent decisions. If sustainability was initially a PR issue, it was placed in the communications department. If it was largely a response to regulatory or shareholder pressure, it might be put in legal or corporate affairs. Production-based companies may find the function in facilities or their EHS department.
Each location is legitimate in its own right, and each positions CSR to influence a particular function. Yet, according to Eric Dziedzic, President of CRX Solutions and former Director of Corporate Responsibility at Merck, companies may be missing the larger point. CSR, by its very nature, plays a broad range of roles. From regulatory compliance to resource planning and from PR and branding to customer development, sustainability touches many parts of the business model. The point, therefore, is to put CSR in the best position to integrate and develop each of these areas. So, where is that?
Several organizations, from Merck to the Government of Singapore, have instituted strategic planning and management departments. Their mandate, as you might imagine, is to plan and execute critical programs with a longer term impact. As CSR affects resource management, supply chain coordination, branding, and market position, corporate planning could be a viable home. Moreover, as business leaders try to link sustainability to the bottom line, or even a "triple bottom line," greater integration with finance also makes sense.
In the next article, we draw on key research on strategic implementation to identify how CSR best fits the business structure. The discussion may not only help corporate leaders assess the business value of sustainability, but shift how CSR leaders view their own role in the organization.