CSR

01/12/2020

Business and social sustainability

The importance of corporate social responsibility during the Covid-19 pandemic

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Social sustainability: the cornerstone of economic and environmental sustainability

The Covid-19 emergency has forced us to engage with an unexpected situation and to adjust our lifestyles accordingly. In limiting our external interactions, the lockdown has encouraged us to examine ourselves and our psychophysical well-being inextricably linked to that of the wider community. As the quality of an individual’s life is also primarily the result of their engagement with social structures and physical environments rather than who they interact with daily, the importance of companies has to be factored in and the issue of social sustainability has thus gained prominence like never before.

By committing to being socially responsible, companies become drivers of social change

Social sustainability is the heart and cornerstone of economic and environmental sustainability, which cannot be achieved without social cohesion. A company’s success is measured by its ability to ensure conditions of human well-being that go beyond the concepts of class and gender and are equally distributed.

The benefits of a socially responsible company

In an increasingly globalised and competitive company, corporate social responsibility (CSR) is not merely the ethical choice but is essential for growth. The European Commission reiterated this concept in a document issued in 2011: “A strategic approach to corporate social responsibility with competition at its core, offering benefits in terms of risk management, lower costs, access to capital, customer relations, HR management and innovative capacity”.

A “happy” employee is more productive

CSR is often confused with virtuous behaviour, which the individual is expected to transpose from their private to their professional lives. This is limiting because sustainability is an actual strategy. A company is sustainable when it achieves competitive stability, i.e., it is competitive with fixed returns over time. To achieve this, it must engage with its stakeholders, that is all those parties with which it interacts such as customers, suppliers, employees and institutions. Its relationship with its stakeholders is essential: they must be engaged in creating and sharing value over time. Companies should also consider the medium to long term: for example, curtailing training costs and employee career paths may initially offer savings but the end result may be an unmotivated, ill-prepared team lacking in loyalty to the company. Similarly, speculative product policies that are not very transparent will affect customer retention rates. In short, a sustainable strategy considers the economic and other effects that business decisions have on each stakeholder.

CSR brings benefits that go beyond the economic aspects, the main ones being:

- a better workplace environment, which then attracts more skilled and productive employees;

- lasting relationships with customers, based on their trust in the quality of the product/service on offer and, hence, in the company’s credibility;

- an improved brand image and brand reputation;

- the development of external relations based on trust and the mutual satisfaction of needs;

- a competitive edge as the company is able to create value not just for itself but also for its owners and stakeholders.

Employee welfare during the crisis

Recent events are changing our understanding of the importance of employee health and safety. Companies are increasingly aware of the importance of employee welfare and all those goods and services made available to permanent employees.
Generali’s 2020 Welfare Index PMI Report shows that investments in corporate welfare have grown: more than 50% of Italian SMEs offer benefits and of these 79% have confirmed their existing employee welfare initiatives and 28% have extended them or introduced new ones.

Focusing on employees strengthens their loyalty and attracts new talents

There has been a more widespread move towards employee welfare plans tailored in response to the specific needs of the historical and cultural context. For example, the Covid-19 pandemic has led to a greater focus on healthcare assistance. Many companies have taken out specific insurance policies to cover Covid-19 infection risks with healthcare products that provide an allowance for daily hospitalisation and post-hospitalisation home care. The latter may include requests for home help, babysitting services and home deliveries. Other companies have taken steps to provide their employees who work from home with suitable conditions such as flexible work hours, suitable equipment, shifts and, in some cases, free psychological support when required.

The public health emergency and socially responsible companies

Many companies have raised their social responsibility bar during this crisis period, introducing measures to assist their employees, customers and the community as a whole. For example, numerous companies have taken action to make up for the lack of medical equipment in hospitals. Armani Group converted its Italian facilities to produce disposable gowns and donated €1 million to the Civil Protection Service and Italian hospitals. Gucci and Prada started producing face masks and medical gowns for the Tuscany Region.
Dallara Group, renowned for sports vehicles, and the Parma Hospital contributed to the development of ventilators, made by converting Decathlon snorkelling masks and creating a valve using a 3D printer. Dallara also made available CAD designs and instructions to allow anyone with a 3D printer to produce the valves and help produce ventilators.

A pandemic is a systemic change that requires a systemic response

Beyond the hospital walls, companies have continued to help with other projects. ABInBev, a beer company with over 500 brands around the world, launched a platform to enable customers support their local bars at this difficult time. Customers can buy a gift card on the salvailtuobar.it website for a beer to be consumed when the bars can re-open.
These are just a few examples of social responsibility while a glance at the Italia non profit platform (a non-profit company that maps and provides information about support initiatives) shows the numerous other contributions. In Italy, 975 social support initiatives have been registered with 722 donors and donations and funds of more than €783 million.

Companies in the post-Coronavirus world

Entrepreneurs, managers and company leaders have been asked to take important decisions in a difficult situation. The examples described above show that the key to dealing with an emergency is to look outward while valuing your employees, introducing initiatives that will protect them and allow them to work as best as possible. Human resources should not merely be viewed as a cost but as offering value thanks to their specialist expertise and knowledge as well as being the representatives of your company. The characteristics of your workforce and their knowledge of the company are vital elements to ensuring business continuity.

Human capital is everything that facilities personal, social and financial well-being

Advancing corporate values ​​and protecting the quality of a company’s engagement with its stakeholders is not an afterthought but the only way to guarantee continuity, especially in a crisis situation. Companies should continue to prioritise this approach, even after the emergency has been resolved, together with the greater deployment of digital tools and better communication skills. The third 2020 Censis report on employee welfare is encouraging in this respect: 95% of the companies surveyed believe it is important to maintain and/or strengthen the current benefits, opportunities and safeguards in the future.