Corporate Social Responsibility (CSR) stands for responsible and sustainable entrepreneurship. When a company practices CSR, it takes into account the “three P’s”: people, planet, profit. Making a profit is allowed and is actually a must, but not at the expense of the well-being of people and not at the expense of nature. That all sounds great, but in practice it seems too far out of reach for most companies. They see CSR mainly as a form of charity.
The perception is that “sustainability costs money”, that it goes at the expense of both turnover and profit. If the outside world expects you to do something in this regard, gesture politics and window dressing are quick solutions. Limiting the use of paper and setting up a code of conduct or appointing a confidant are often enough to create the illusion of sustainable and responsible entrepreneurship. Illusions won’t get us anywhere, though.
“Sustainable entrepreneurship doesn’t mean that you use your profits to finance sustainability, but that you use sustainability to make a profit. ”
It’s primarily the task of the supervisory board to put thinking about CSR on the agenda. This can be done by asking questions and making suggestions. It’s up to the board of directors to determine if and how they will implement them. All proposals that are made to the shareholder in this regard must be formulated by the board of directors.
But what about that charity? Which shareholder would choose to practice sustainable entrepreneurship out of compassion for the well-being of his fellow human beings? It doesn’t have to be out of compassion, though. It’s a misunderstanding to think that sustainable entrepreneurship costs money. As early as the 1990s, the American Michael Porter demonstrated how you can actually make a greater profit through sustainable entrepreneurship. To achieve this objective, companies must change their way of thinking. Sustainable entrepreneurship doesn’t mean that you use your profits to finance sustainability, but that you use sustainability to make a profit. To do so, you need to analyze precisely how the value chain of your production process can be optimized with regard to both sustainability and productivity. A standard example in Curaçao are the windmills of Aqualectra on Tera Kora. These windmills have recouped their costs many times over and have been generating large quantities of green electricity for years now. That’s profit and sustainability all in one!
Creative thinking also makes such positive developments possible at less technology-driven companies that mainly work with their human potential: banks, insurance companies, retailers, accountants, lawyers, etc.
Kate Raworth goes one step further. This English economist from Oxford University developed the notion of “Doughnut economics”. Raworth points out that the idea that we need to grow continuously (ever increasing sales and profits) is contrary to everything that we experience in our lives. All growth stops at some point, so why should the economy continue to grow? The point is to find the right balance at the right time, taking into account the natural limits. Exceeding those limits inevitably will lead to exhaustion. Respecting the limits will lead to a company’s sustained existence.
A good HR policy, including an effective integrity policy, can make an enormous contribution to the well-being of employees and thus to productivity and continuity. This requires more than simply setting up a whistleblowing scheme. At the very least it requires a thorough analysis of bottlenecks and possibilities for improvement of the human interaction within the company. This analysis should culminate in a plan that is actually implemented and regularly assessed for its effectiveness. In this regard, integrity is a priority. The key is to create a structural plan for making a profit through sustainability. This is something that society may also expect from the business community in Curaçao: corporate social responsibility.