Since its launch in 2010, the IMPACT Project (“Impact Measurement and Performance Analysis of CSR”) has been the first systematic attempt to assess and measure the contribution of CSR to the social, economic and environmental goals of the European Union. Its consortium unites 16 leading universities, business schools, research institutes, think tanks, and membership network associations. IMPACT has been the first evidence-based assessment and analysis of CSR effects within companies, across industry sectors and regions, and at national and EU levels. In terms of its scope and duration, It has been the European Commission’s largest ever research and knowledge development initiative on CSR, supported by € 2.6 million. As such, it is hoped that the release of its findings, insights and recommendations will signal a watershed moment in our approach to CSR as traditionally framed in management, policy and scientific study
The IMPACT research suggests that companies regard CSR practice as a necessity. Yet the study also indicates that firms have a fairly uneven view of what CSR involves, and whether it plays a strategic function within the company (beyond the idea that there should be some evident commitment to CSR). It appears that the identification of individual CSR issues is highly dependent on their materiality to core business and strategy. In other words, once an issue is perceived as strategically important to a company, it may no longer be the responsibility of the CSR function to address and manage it.
There are no established and accepted methodologies to measure societal impacts from companies or their CSR/sustainability activities. In the absence of a widely deployed impact logic among companies and managers and no accepted impact measurement methodologies so the societal impacts of companies remain unclear and hidden from public scrutiny and policy.
While some companies are responsive to GRI and the Global Compact reporting guidelines, and are concerned about their position with rating agencies and sustainability indices, these schema pay no or little explicit attention to the impacts for society arising from CSR and sustainability practices (although GRI’s G4 Guidelines are seen as moving in this general direction).
In the case of sustainability indices it is rather curious that these do not seem to measure the sustainability of a company’s activities in terms of its positive and negative impacts on the environment. Unfortunately the scope of IMPACT did not allow for an in-depth study of this domain – and as such, there may well be examples and cases which challenge this finding.
Furthermore, where outcomes and impacts are measured, there is no convincing evidence that there are significant improvements over time large enough to create change and reach major policy goals.
For the IMPACT team, it is therefore obvious, that CSR alone cannot be ‘the’ single solution to environmental, economic or social problems. It can only contribute a small piece to a response which has to be broader, multi-faceted, well managed and more strategic for the firm (e.g. as part of a policy mix, or a company strategy shaped by impact thinking plus public policy objectives within a specific operating environment).
IMPACT also showed that the responsibility of companies needs to be analysed in terms of impacts – both within the firm and by key stakeholders. However, impact thinking is relatively poorly developed in business.
Impact thinking is a variant of the approach found in management systems – it seeks to trace and measure how activities lead to consequences, just as management systems seek to bring environmental or social information into decision making in a systematic way. Hence the evidence-based concern from the research that structured management systems and approaches to impact management are not widely deployed within companies and managerial teams.
The IMPACT analysis also shows that there is no practice in companies to discern effects stemming from voluntary activities (CSR in the sense of the former definition by the EU Commission) and other company activities (e.g. caused by regulation). The main obstacle is that data is not collected in ways that discern between different types of activities addressing the same issue, or different motivations for different activities.
And IMPACT does not recommend doing so in the future. The focus of corporate assessments and management should be on impacts and how they can be achieved. Whether impacts were achieved purely by voluntary activities, or in combination with activities or changes due to legal compliance, is not essential when it comes to the question of how to contribute most effectively towards sustainable development. In instances where companies do consider impacts, they are rarely informed by the policy goals and agenda of the EU in areas such as competition, environment and quality of jobs. While the EC combines these ideas in its agendas for Europe, they are rarely seen or understood that way by companies.
Indeed there is a relatively poor understanding of EC policy and especially the link made between growth, competitiveness, sustainability and social inclusion through innovation as developed in the four pillars of the Lisbon and Gothenburg Strategies. There is therefore a weak link between EU ‘policy’, EU policy on CSR, and company strategy and CSR practices across Europe.
In parallel, the study suggests that policy support for generic CSR – even when focused more on impacts – does not on its own replace classic policy instruments like command and control policies, economic instruments nor policies focused on specific target areas (e.g. REACH, WEE, ROHS). Depending on the issue, CSR can foster the implementation of such policies, can contribute to the development of better instruments, can help to manage issues strategically beyond mere compliance to law and it can stimulate innovation.
On the other hand, networks seem to have a capacity for influence. Where there are networks or clusters of companies and other actors active on CSR and sustainability at a local level, CSR practice seems to have the potential to be more explicit and strategic.
These networks and clusters play an important mediating role in company CSR and sustainability practices and seem to have a future role in the development and application of impact approach and logic in companies.