Roberto Adame
CSR Manager
CEMEFI
/
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Socially Responsible Companies Better Equipped to React to Crises

By Alejandro Ehrenberg | Tue, 10/06/2020 - 13:15

Q: How has the COVID-19 pandemic changed corporate social responsibility (CSR)?

A: CSR shifts according to the circumstances. COVID-19 has had a heavy impact on many different facets of life, so companies have had to adjust their CSR accordingly. Normally, CSR would apply to circumstances like poor security, environmental risk or lack of public services. But the pandemic was unexpected and the CSR response is less clear. What is clear is that socially responsible companies have been better at responding to the crisis than others. These companies are used to being assertive and engaging with destabilizing factors. CSR practices, for example, helped companies transition to home office more efficiently. Moreover, CSR helps companies become flexible. That is valuable in the current circumstances: If you are in a sector that has been hit by the crisis, you have to able to harness your skills and infrastructure and deploy it to new business arenas. CSR is useful in this regard.

On the other hand, CSR concerns have grown due to the pandemic. Health, for example, has gained a great deal of prominence, as well as the quality of life of employees. As a result of the pandemic, CSR projects have already changed considerably. We are seeking to produce impacts that were not even thought about before. Populations that were not on our radar will have to be addressed now.

Q: Why is CEMEFI’s CSR distinction relevant to the mining industry?

A: Our distinction is valuable because it helps companies get on the path to CSR. Many companies are not completely in tune with CSR as it is practiced today. Carrying out the due diligence required for achieving our distinction lets companies know where they stand and where they must go. For example, mining companies are often exclusively focused on the communities where the mine is located. Industry paradigms have pushed miners to focus on certain issues while losing sight of others. For example, the life-work balance of corporate personnel is important, too.

When engaging with their communities, it is imperative that miners not fall into mere corporate philanthropy, which is just helping through donations. Rather, CSR means getting socially involved, with the goal of achieving a return on the investment made. Engaging a community means becoming its development partner and including that community in the value chain. CSR also has to be aligned with each particular company’s business goals. It is a tool for empowering communities and strengthening businesses.

Additionally, miners are in a privileged position in regard to CSR because they are subject to high-impact risks and they have vast resources. They can create programs that are far-reaching. In Chihuahua, for example, a mining company participated in our Best Corporate Practices program. It was going to start working on a community’s land, so it bought the adjacent land parcel and reproduced the town so the people could comfortably be relocated, only with better urban planning.

Miners are at the center of public opinion. Civil society scrutinizes them closely. CSR is the key that allows them to present a positive image backed by real actions.

Q: Why is CSR sound business practice?

A: CSR needs to be practiced in such a way that it creates a win-win situation. Of course, there must be an ROI, but it does not have to come only in a pecuniary form. It can also come from intangible assets like reputation, brand presence or employee engagement. When that ROI is demonstrable, responsible investors will direct capital to these companies. This trend has grown a great deal recently and it has become very sophisticated. Stock exchanges and private equity operators, where economic logic is the determining factor, understand that CSR helps protect investments and reduces associated risks. Socially responsible investing seeks to consider both financial return and social good. Socially responsible investors encourage corporate practices that they believe promote environmental stewardship, consumer protection, human rights and racial or gender diversity.

But CSR distinctions like CEMEFI’s are not magic wands. Once you are certified, you have to follow up and continue doing things that are transcendental for the common good. Philanthropy, in and of itself, is vital in the face of emergencies like earthquakes or pandemics but it is not CSR. The latter is a conscious social and environmental engagement that seeks an ROI and is measured by KPIs. Companies may or may not be attracted to philanthropy but they should be attracted to CSR. Their standing in the financial markets is just one of the areas where ROI can be expected.

The Mexican Center for Philanthropy (CEMEFI), a civil association founded in 1988, is a private, nonprofit institution that promotes a culture of philanthropy and social responsibility in Mexico. Its goal is to strengthen the organized participation of society.

Alejandro Ehrenberg Alejandro Ehrenberg Journalist and Industry Analyst