A CSR audit is a term that is being used more and more frequently, as societal needs and expectations grow ever more pressing. But what does it mean? How do you get started? Above all, what will it do for my organization's performance?
1. An audit that takes into account all aspects of CSR
CSR, as identified by economists in the 20th century, takes into account respect for 3 pillars: human, environmental and economic. The notion of economic responsibility was later redirected to the idea of governance by financial institutions, which were concerned about the depletion of planetary resources and social stability in their notion of economic growth.
For these financial institutions, the DNA is not the harmonious distribution of wealth, but the enrichment of risk-taking investors. In recent decades, the economic pillar of CSR has been redirected towards the notion of governance.
A good CSR audit therefore requires consideration of social, environmental, economic and governance indicators.
2. Measure CSR indicators based on a solid reference
One of the obligations in France for companies with more than 50 employees is the BDESE, which must be made available to the CSE. If you don't know what this is, we've put the link here. The Social and Environmental Data Bank will provide you with a series of criteria to be taken into consideration at both salary and environmental levels:
- How are women and men represented in my company?
- What are the pay gaps?
- What percentage of employees are disabled?
- How many training courses have been given to my employees?
- Etc.
The BDESE provides a clear framework for the markers that are important to keep in mind in the company's development and decision-making. Starting to list these indicators will help identify areas of weakness. Diversity, for example, is a particularly important criterion for a company's creative and innovative potential. According to the World Economic Forum, citing a study by the Boston Consulting Group, companies with a management that is more diverse in terms of origin generate 19% more revenue, in particular because of their innovative potential.
Similarly, excessive wage differentials can lead to internal tensions and lower productivity, while a lack of training can result in a decline in skills.
Environmental and economic criteria are also detailed in the BDESE methodology, which provides a good basis for a CSR inventory. Calculating carbon emissions, material consumption and impact on the ecosystem is a good basis, and many websites provide a basic methodology for doing so.
Nevertheless, the BDESE has its limits. Not least because it only considers the company from the perspective of its employees. But a company lives in an ecosystem, and is interdependent with it.
A CSR audit, and in particular in the context of a CSRD audit, must include all stakeholders. In other words, all those who are directly or indirectly affected by the company's activities. These include direct stakeholders: customers, employees, investors and subcontractors, as well as indirect stakeholders: governments, associations, local communities, etc.
3. Consult stakeholders on indicators in a spirit of trust
For an effective CSR audit, it is essential to consult stakeholders. Among the 7 pillars of CSR, there are several key concepts:
- Working conditions
- Respect for human rights
- Good business practices
- Communities and local development
- Consumer protection
But how can we guarantee these principles without asking the key stakeholders? The company may respect the principles of the BDESE, particularly in terms of gender equality, but if women feel themselves to be the daily victims of remarks or denigration, what is the value of this indicator? The principle of CSR is to create a company that performs well over time, and an ecosystem based on trust. A CSR audit with and without stakeholder feedback can completely change the risks and opportunities identified. By including your stakeholders in this audit, the indicators you identify will be much more qualitative for your CSR strategy.
When consulting stakeholders, we strongly recommend using a trusted third party. Indeed, it is important that stakeholders can express themselves freely without fear of reprisal. Finally, it is common to see audits carried out internally and to see completely different results depending on whether these figures are compiled by managers or by company unions, as shown by the two contrasting results on the Carrefour Group's policy during the Covid.
4. Improving performance with a comprehensible CSR audit
The principle of CSR as imagined by the Anglo-Saxons is "win-win". I shouldn't see respect for the living world and considerations of sustainability as a punishment, but as a means of gaining flexibility and new opportunities.
The European regulatory aspect of CSR is culturally distracting from this basic objective. The game seems more oriented towards a laborious liar's poker of administrative and financial documents, rather than creating emulation to innovate and create new wealth, whether tangible or intangible.
An effective CSR audit therefore measures indicators relating to the 3 pillars of CSR, and must encourage stakeholder participation. The audit announcement and procedure must also remain transparent, clear and motivating, in order to provide reliable indicators. In the words of Boileau, "what is well conceived is clearly stated, and the words to say it come easily". An opaque methodology and unclear phrases will tend to demotivate and lead to more incorrect responses. Not to mention the suspicion of greenwashing that this type of approach arouses, particularly among the new generations trained in CSR, who are used to simple, sincere discourse.
The form of the audit is therefore just as important as the content, in order to gather as much usable data as possible. In 99% of cases, this data, clearly formulated, collected and supervised by CSR experts, makes it possible to identify strengths, weaknesses, threats and opportunities (SWOT) from a sustainable development perspective, and, like any SWOT, to innovate towards new, high-performance solutions. Stakeholder participation allows us to multiply this creativity, bring out "win-win" strategies and, thanks to this involvement, move much faster in implementing your action plan.
Not to mention the indisputable benefits in terms of commitment, loyalty and reputation.
Did you know?
It's easier to transform a pragmatic CSR action plan into an accounting verbatim for the CSRD than to start from an accounting and legal discourse and transform it into a CSR strategy.
