What is CSR governance?

In this article, we'll be talking about the benefits of structuring good corporate CSR governance and the keys to achieving it.

First, let's take a moment to review the definition of CSR governance, its challenges and the elements that make it up, particularly in relation to ISO 26000.

Then we'll share a successful CSR governance model to inspire you and help you integrate it into your business.

What is CSR governance?

What is corporate governance?

To understand what CSR governance is, let's take a quick look at what corporate governance is.

Corporate governance is the set of rules, practices and processes that dictate how a company is run and controlled. It determines who makes important decisions, how decisions are supervised and who is responsible for what.

The idea is to ensure that the company operates transparently, ethically and efficiently. Here are the key elements of corporate governance:

• Set up a board of directors,
• Define responsibilities,
• Guaranteeing ethics and compliance,
• Be transparent and communicate.

These are all elements that can be found in CSR governance.

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What are the 3 pillars of CSR?

Now that we've defined what corporate governance is, let's return to the definition of CSR.

CSR (Corporate Social Responsibility) is based on three main pillars:

• The Environmental pillar: This refers to the company's impact on the planet. This includes efforts to reduce CO₂ emissions, limit energy and water consumption, manage waste, and adopt and promote sustainable production practices.
• The Social pillar: This pillar concerns the well-being of employees and local communities. It involves ensuring that working conditions are safe and fair, encouraging diversity and inclusion, and contributing to community development.
• The Economic (or Governance) pillar: This aims to ensure responsible and ethical management of the company, while guaranteeing its profitability. This pillar includes financial transparency, anti-corruption and supply chain responsibility.

Be careful not to confuse CSR with ESG. 

CSR drives the strategic vision of sustainability, aligning operational objectives with ethical and environmental imperatives and societal benefits. 

ESG refers to a set of criteria used to measure a company's performance on environmental, social and governance factors.

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What is CSR governance?

CSR governance brings together the structures and people who guide and oversee CSR strategy. 

These are mechanisms that enable the company to make decisions, define clear objectives and allocate resources (such as time, budget or teams) to achieve these objectives.

This is the framework that enables the company to manage its CSR initiatives effectively, in a structured and responsible way.

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The challenges of good CSR governance

To achieve your CSR objectives, good governance of these issues is essential! 

It will help the company to improve its performance and take these issues into account: 

• Strengthen credibility and stakeholder confidence. Sustained CSR governance at board level demonstrates genuine commitment, and strengthens reputation with customers and investors.
• Ensuring that actions are supported and monitored. This supports CSR initiatives and ensures that they are applied and maintained throughout the company.
• Target sustainable growth and reduce risks. By aligning financial objectives and sustainability, CSR governance helps to anticipate risks and create sustainable value.

There are many other positive aspects to good CSR governance. Overall, it's about maximizing the impact of the entire CSR strategy to achieve the goals the company has set itself.

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Key elements of CSR governance

We share with you the key elements for effective and transparent CSR governance: 

• Leadership and commitment: Committed management and a clear commitment from leadership (often the CEO or Board of Directors) to establish a long-term CSR vision and objectives.
• Clear, defined CSR strategy: The implementation of a CSR strategy that sets the company's priorities (environmental, social, governance), sets a dedicated budget, and aligns quantified, time-bound objectives with the company's values and stakeholders' expectations.
• Structures and responsibilities: CSR governance requires dedicated structures: a CSR team, CSR managers in the various departments, and a governance committee or CSR committee to oversee actions. This CSR committee must include members of management to regularly monitor the progress of the CSR strategy.
  These structures guarantee the responsibility and involvement of all levels of the company, and the integration of CSR objectives into operational practices.
• Transparency and communication: Transparency is key to good CSR governance. We advise you to publish CSR reports detailing actions taken, progress made and results achieved, often in the form of an annual CSR report or regular communiqués.
• Performance monitoring and evaluation: Setting up key performance indicators (KPIs) to measure actions and their results. This makes it possible to track progress, identify gaps and adjust strategies if necessary.
• Stakeholder engagement: Actively involve all stakeholders (employees, customers, suppliers, investors, local communities, etc.) in the decision-making and evaluation processes for CSR practices. You can undertake consultations, surveys or workshops to gather feedback.
• Compliance and risk management: Ensuring compliance with local and international CSR regulations (by aligning with international frameworks or standards such as ISO 26 000), but also identifying social, environmental and ethical risks, in order to manage them proactively.
• Continuous improvement: CSR governance must encourage a culture of continuous improvement, adapting practices and seeking new opportunities to make the company more responsible, sustainable and ethical over time.

These key elements enable the company not only to meet its commitments, but also to build a fine reputation and create sustainable value.

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The 7 principles of ISO 26000

ISO 26 000 is one of the main standards for sustainability, integrating and structuring the elements of good CSR governance.

ISO 26 000 provides a framework for integrating CSR principles into corporate activities and decisions. 

For good CSR governance, here are the 7 principles of the ISO 26 000 standard: 

1. Adopt ethical governance: ensure transparency, fairness and integrity in decision-making.
2. Demonstrate leadership: promote the organization's objectives while respecting the interests of stakeholders.
3. Define a clear governance framework: establish and maintain a governance framework that aligns with the organization's objectives, values and culture.
4. Being accountable: ensuring that decisions are taken responsibly and that results are monitored and evaluated.
5. Assuming responsibility for its decisions: the company must be accountable for its actions, and in particular for their impact on the environment, society and its stakeholders. This means assuming responsibility for the consequences of its decisions and activities.
6. Promoting fairness: treating all stakeholders fairly and providing them with clear, honest information on CSR practices and results.
7. Transparency: providing clear and honest information to stakeholders about our CSR practices and results.
8. Being resilient: being able to adapt your governance to any internal or external situation.

These 7 principles of ISO 26 000 help companies to adopt responsible corporate governance, in order to have a positive and sustainable impact on society, while remaining profitable.

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Example of good CSR governance

In many companies, the CSR department is isolated from other functions and is not always integrated into decision-making bodies. This poses a number of problems, not least the absence of a coherent CSR strategy supported at all levels of the company.

So, if we were to imagine an ideal CSR governance model, using the elements mentioned above, here's a small glimpse of the result:

• CSR infused into all teams: Every function and every employee would be involved in the CSR approach. They would understand the CSR stakes and impacts for their team.
• Board integration: CSR would be part of strategic discussions at the highest corporate level.
• Regional and local CSR teams: Local and regional teams play a key role in adapting and implementing CSR actions to local conditions.
• CSR performance included in managers' objectives: CSR results would be integrated into managers' objectives and performance appraisals, ensuring their direct involvement.

For a complete example, we invite you to discover Schneider Electric's CSR governance. 

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Final word of advice: measure your impact & take responsibility

For good CSR governance, it's important to always measure its impact and ensure that responsibilities are properly allocated and effective.

Measuring the impact of CSR initiatives guarantees their relevance, effectiveness and ability to produce measurable results.

And to achieve these objectives, responsibilities must be clearly allocated so that sustainable projects are well coordinated and help to strengthen the commitment of all internal and external players.

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Conclusion 

Good CSR governance is essential to ensure that the company's social and environmental commitments are embedded in all its actions. 

It helps to structure and manage CSR initiatives, aligning decisions with ethical and sustainable values. 

By ensuring transparency, stakeholder engagement and continuous improvement, CSR governance becomes a powerful lever for strengthening corporate credibility and generating sustainable value, both for society and for the company itself.