Corporate social responsibility really is an area that the financial services sector and re/insurers in particular need to improve. According to the Reputation Institutes’ 2017 CSR report, there are no re/insurance companies in the top 100 companies globally, and the finance industry receives a special mention in the report saying that it is falling behind all other sectors with respect to CSR.

It would be easy to think that Bermuda, being a smaller community than New York or London, for example, is different. But firms having a sense of social responsibility is essential no matter where in the world your business is based and in smaller communities, it is perhaps more critical than in the larger ones.

So, what is CSR and why should companies be spending time, effort and money on it?

CSR initiatives and programmes take many different forms, but the essential aim is that companies are “giving back” in some way. This will typically include one of four areas: the environment, the community, the workplace or the marketplace. CSR initiatives will look at ways of making improvements in those areas that align with the company’s ethos and values; this might include actions such as improving sustainability, improving diversity, reducing poverty.

With the rise of CSR, companies have looked at ways of improving their approach, often applying the same processes of continual improvement and efficiency improvement that good company will be using to enhance other parts of their business, to ensure that their CSR dollar has a more significant impact. But not all companies can start from this point, and there are some simple steps that firms can take, which can make all the difference.

Nothing embeds a corporate value into an organisation quicker than making it part of its processes. This may seem like an unusual approach when talking about CSR; this is, however, precisely what some of the biggest and most successful companies in the world today (Google, Lego, Disney, BMW) have done to transition their CSR from being piecemeal to effective and just part of the way they work.

Finance and corporate reporting may seem like a strange area to start when talking about CSR transition and improvement; it is, however, vital particularly for organisations that are focused on metrics such as shareholder value. Many companies now use the Triple Bottom Line accounting framework to measure the organisation against its impact on people and social equity, planet and its effect on the environment and profit, the traditional economic measures.

As the management guru Peter Drucker said, if you can’t measure it, you can’t improve it. Making the change to TBL accounting is something which has for many companies given them the ability to measure and improve their CSR against their values and the impact that they want it to have. With many financial services firms presently looking at their financial reporting as part of their IFRS16 or IFRS17 requirements, it may be an ideal opportunity to look at how your finance and corporate reporting can help make CSR part of business as usual.

Project governance and project management is another area that firms need to change and improve to meet their CSR goals. This process starts right at the very beginning of a project when the business case is being established and presented for funding approval. Traditional business cases have focused on how the plan will save money or earn more money — the typical financial metrics.

Adding the organisation’s CSR values into the business case builds additional dimensions allowing the broader impact and benefits of the project to be considered.

For example, historically a project that would increase profits or reduce costs by 10 per cent may have been a desirable proposition and likely to gain approval. However, if that same project is seen to have a negative impact on the environment or some other CSR value, the organisation will need to look at the approach, perhaps looking for a way to achieve the outcomes without the adverse effect on the environment.

An example of this is where firms implementing a new data centre have decided to opt for a different supplier who offered the option of green energy, or that had a recycling programme that benefited the local community.

Having embedded CSR values at such an early stage of a project makes it easier to measure and maintain CSR alignment through the life span of the project, but it does not make it automatic. Issues and challenges are part of day-to-day life for project managers who will always be working with the project team to find the best solutions while keeping the project on track.

In a world where CSR values — particularly in today’s world of social media — are essential to an organisation, the judgment of what is the best answer needs to consider and be measured against those values.

As a project reaches its closing stages, attention will start to change to look at the benefits realisation; this process will differ for organisations whose processes are aligned with their CSRs to ensure that all benefits (be they, people, planet or profit orientated) are being realised in accordance with the approved project and governance plan.

The last area (at least for the first stages of transition) that firms can improve to be more CSR aligned that is particularly topical for re/insurers at the moment is merger and acquisition activity. We are already seeing organisations adapting their investment approach to be more ethically aligned (this is part of a CSR value alignment).

In the conversations that I’m having, firms are starting to adjust the criteria that they use to select, shortlist and rank target businesses based on CSR alignment and CSR improvement. An extreme example of this might be where an organisation that is looking to improve its environmental CSRs may prefer to acquire a business that has already taken these steps.

Businesses that are looking to make changes should see a CSR transition to help them break the cycle of having regular CSR initiatives. It is time to start making CSR part of the business as usual way of working.

Darren Wray is the CEO of Fifth Step Ltd. For more information, visit linkedin.com/in/DarrenWray or fifthstep.com