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May 22, 2023
Is sustainable certification a proof of commitment to social responsibility?
As companies increasingly focus on their environmental and social impact, sustainable certification has emerged as a key tool for demonstrating their commitment to sustainability. However, is sustainable certification alone enough to ensure that a company is truly socially responsible? In this article, we will explore how companies can connect sustainable certification with corporate social responsibility from a realistic perspective
Akinboade P. Lydia

Sustainable certification is a process that evaluates a company's operations and products against environmental, social, and economic criteria. It is one aspect of corporate social responsibility (CSR), which encompasses a company's social, environmental, and economic impact.

CSR is a business approach that aims to make a positive impact on society. It can help to eradicate global poverty and promote sustainable development. CSR is also a business practice that considers the impact of a company's operations on its stakeholders and the environment. It can help businesses to improve their financial well-being and contribute to the overall prosperity of society.

CSR:A competitive advantage for businesses

CSR can help businesses to create value, attract customers and employees, and build trust with communities. Additionally, it nurtures trust within communities and provides businesses with a competitive advantage in attracting high-caliber clients and talented employees.

Communities are crucial stakeholders for businesses. Smart business leaders understand that building positive relationships with diverse individuals, organizations, and groups is vital for long-term success. They recognize that thriving commercial environments depend on stable societies in social, environmental, and governance aspects. Moreover, consumers  expects responsible behavior from the private sector, seeking high-quality and ethically sustainable products and services. Investors also prioritize financial performance that incorporates environmental and social considerations, acknowledging associated opportunities and risks.

Organizations have a social responsibility to consider the impact of their decisions and actions on people and the environment. This responsibility is upheld through transparency, ethical behavior, and a commitment to the well-being of society and sustainable development.

CSR is a business approach that integrates social, environmental, and economic considerations into core values, culture, decision-making, and operations. It aims to improve business practices, generate sustainable profits, and contribute to society. The significance of how the business sector addresses challenges related to sustainable development is increasing, and this aspect is becoming an integral part of CSR initiatives.

Elements of CSR

CSR typically includes “beyond law” commitments and activities pertaining to:

•corporate governance and ethics;

•health and safety;

•environmental stewardship;

•human rights (including core labour rights);

•sustainable development;

•conditions of work (including safety and health, hours of work, wages);

•industrial relations;

•community involvement, development and investment;

•involvement of and respect for diverse cultures and disadvantaged peoples;

•corporate philanthropy and employee volunteering;

•customer satisfaction and adherence to principles of fair competition;

•anti-bribery and anti-corruption measures;

•accountability, transparency and performance reporting; and

•supplier relations, for both domestic and international supply chains

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CSR:A win-win for businesses and society

CSR is driven by both public policy and business considerations, as public policy seeks to enhance the positive impact of businesses, while businesses can benefit from CSR through enhanced brand value and sustainability.

Corporate Social Responsibility (CSR) is crucial in management as businesses play a vital role in optimizing resource utilization, creating wealth, and generating employment. It allows businesses to manage risks, seize opportunities, and enhance their reputation through active engagement with diverse stakeholders. These stakeholders include shareholders, employees, consumers, communities, suppliers, governments, non-governmental organizations, and international organizations.

Factors and influences of the rising focus on corporate social responsibility.

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Sustainable development is a pressing issue highlighted by the UN and other sources, emphasizing the depletion of natural resources faster than they can be replenished. This unsustainable trend poses a significant threat, potentially leading to resource scarcity for future generations. It becomes evident that current development practices are not viable, both practically and ethically. Moreover, poverty alleviation and upholding human rights are closely linked to these concerns. Corporate Social Responsibility(CSR) provides an entry point to understand and address sustainable development issues, offering businesses a way to integrate them into their strategic approaches.

Globalization: The increase in economic globalization, including cross-border trade, multinational corporations, and global supply chains, has raised significant concerns about Corporate Social Responsibility (CSR). These concerns encompass areas like human resource management, environmental protection, and health and safety. CSR is essential in understanding the impact businesses have on labor conditions, local communities, and economies, and in identifying measures that promote public well-being. This is particularly important for export-oriented companies operating in emerging economies.

Ethics: Numerous significant and well-known instances of corporate ethical violations have caused harm to employees, shareholders, communities, the environment, and even stock prices. These incidents have led to a heightened level of public distrust towards corporations. Adopting a Corporate Social Responsibility (CSR)approach can effectively enhance corporate governance, transparency, accountability, and ethical standards, thereby addressing these concerns.

Benefits of implementing CSR

Improved reputation management: In the context of Corporate Social Responsibility (CSR), companies that demonstrate positive actions can bolster their reputation, whereas those that exhibit poor CSR practices run the risk of tarnishing their brand and overall company value. The attributes of trust, trustworthiness, dependability, quality, and consistency form the bedrock of reputation, often referred to as brand equity. Even for companies without direct retail presence or brand exposure, the significance of their supply chain partners' reputation in addressing CSR concerns cannot be overstated.

Improved capacity to recruit, develop and retain staff: This outcome can be attributed to the implementation of enhanced human resources practices, such as "family-friendly" policies, or it may stem from a company's strong commitment to its products and methodologies. It can also be a by product of initiatives and activities that foster employee loyalty and morale. Employees become advocates for a company they take pride in working for and serve as valuable sources of suggestions for enhancing overall performance.

Improved innovation, competitiveness and market positioning: Corporate Social Responsibility (CSR) encompasses seizing opportunities and mitigating risks. Engaging with diverse stakeholders offers valuable insights to generate innovative ideas for new markets, processes, and products, giving businesses a competitive advantage. For example, a company may seek environmental and ethical certification to supply targeted stores. Adapting to trends, fostering innovation, and responding to market demands have always been key elements of successful businesses. The promotion of environmentally and socially beneficial products is increasingly emphasized in mainstream advertising, evident in campaigns for hybrid cars, unleaded fuel, fairly traded coffee, wind turbines, and more.

A catalyst for responsible consumption: Transitioning from unsustainable consumption patterns is widely recognized as crucial for achieving sustainable development. Businesses play a pivotal role in shaping sustainable consumption habits and lifestyles through their offerings and delivery methods. The notion of "responsible consumerism" extends beyond changing consumer preferences. It encompasses considerations such as the products available in the market, their alignment with consumer rights and sustainability concerns, and the regulatory frameworks governing the producer-consumer exchange. These factors collectively influence the trajectory towards sustainable consumption practices.

To connect sustainable certification with corporate social responsibility, companies need to take a holistic approach. This means that they need to consider the social, environmental, and economic impact of their operations and products. Companies that are truly socially responsible go beyond sustainable certification and take a proactive approach to sustainability. Technology also has an important role to play in this and this would be discussed further below.

Connecting Sustainable certification with Corporate social responsibility: The Role  Technology.

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Technology can play a key role in connecting sustainable certification with corporate social responsibility. For example, companies can use technology to track their environmental impact, monitor their supply chain, and engage with stakeholders. An example is FarmGrid, an application developed by FutuX Agri-consult Limited aimed at at digitizing the Agricultural Extension delivery in Africa. It further aims to monitor the activities of extension agents, tracking and managing farmer’s production activities as well as capture and manage agricultural data.  Technology can also help companies to reduce their environmental footprint, improve their social impact, and create long-term value for their stakeholders.

Inconclusion, the question of whether sustainable certification alone is sufficient to demonstrate a company's commitment to social responsibility raises important considerations and this would be addressed in our upcoming Nigeria Sustainable Agriculture Conference (2023). Achieving a balance between profit motives and responsibility to the environment and society is a whole lot of challenge. It requires companies to adopt innovative strategies that align financial success with sustainable practices. The pursuit of both sustainable certification and profitability is possible, but it demands a proactive commitment to integrating sustainability into all aspects of the business.