What is CSR governance?

In this article, we will talk about the benefits of structuring good corporate CSR governance and the keys to doing so.

First, let's take the time to come back to the definition of CSR governance, its challenges, and the elements that constitute it, in particular 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 quickly recall what corporate governance is.

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

The idea is to ensure that the business operates in a manner transparent, ethics and efficient. Here are the key elements of governance:

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

These are elements that we will be able to find in CSR governance.

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What are the 3 pillars of CSR?

Now that we have defined what corporate governance is, let's go back to the definition of CSR.

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

• The Environmental Pillar: It's about the impact of the company 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 is about the well-being of employees and local communities. It's about ensuring that working conditions are safe and fair, encouraging diversity and inclusion, and contributing to community development.
• The Economic Pillar (or Governance): It aims at responsible and ethical management of the company, while ensuring its profitability. This pillar includes financial transparency, the fight against corruption, and accountability in the supply chain.

Be careful not to confuse CSR and ESG.

CSR is the driver of the strategic vision of sustainability and makes it possible to align operational objectives with ethical, 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 therefore brings together the structures and people who guide and supervise the CSR strategy.

These are mechanisms that allow a business to make decisions, set clear goals, and allocate resources (such as time, budget, or teams) to achieve those goals.

It is the framework that allows the company to manage its CSR initiatives effectively, in a structured and responsible manner.

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The challenges of good CSR governance

To achieve its CSR objectives, good governance of these subjects is essential!

It will help the company to be more efficient and take into account these challenges:

• Strengthen its credibility and the trust of stakeholders. Sustained CSR governance at the board level proves authentic commitment, and strengthens reputation among customers and investors.
• Ensure that actions are supported and supervised. This makes it possible to support CSR initiatives and to ensure that they are applied and maintained by the whole company.
• Aim for sustainable growth and reduce risks. By aligning financial goals and sustainability, CSR governance helps to anticipate risks and create sustainable value.

There are many other positive aspects of good CSR governance; overall, it is a question of maximizing the impact of the entire CSR strategy in order to achieve the objectives that the company has set for itself.

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The key elements of CSR governance

We share with you the key elements to set up effective and transparent CSR governance:

• Leadership and commitment: Committed management and a clear commitment from leadership (often from the CEO or board of directors) to establish a long-term CSR vision and goals.
• Clear and defined CSR strategy: The implementation of a CSR strategy that sets the company's priorities (environment, social, governance), by setting a dedicated budget, by aligning quantified and dated objectives with the values of the company and the expectations of the stakeholders.
• Structures and responsibilities: CSR governance requires dedicated structures: a CSR team, CSR managers in the various departments, and a governance committee or a CSR committee that oversees actions. This CSR committee must include management members to regularly monitor the progress of the CSR strategy.
  These structures ensure 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 the actions taken, the progress made and the results obtained, often in the form of an annual CSR report or regular press releases.
• Performance monitoring and evaluation: The establishment of key performance indicators (KPIs) to measure actions and their results. This makes it possible to monitor progress, identify discrepancies, and adjust strategies as needed.
• Stakeholder engagement: Actively involve all stakeholders (employees, customers, suppliers, suppliers, suppliers, suppliers, investors, local communities, etc.) in the decision-making processes and evaluation of CSR practices. You can undertake consultations, surveys, or workshops to gather feedback.
• Compliance and risk management: Ensure compliance with local and international CSR regulations (by aligning with international frameworks or standards such as ISO 26000), but also identify social, environmental and ethical risks, in order to manage them proactively.
• Continuous improvement: CSR governance should 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 allow the company to not only meet its commitments, but also to build a good reputation and create sustainable value.

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The 7 principles according to the ISO 26000 standard

The ISO 26,000 standard is one of the main sustainability standards, it makes it possible to integrate and structure the elements of good CSR governance.

ISO 26000 provides a framework for integrating CSR principles into corporate activities and decisions.

For good CSR governance, here are the 7 principles according to the ISO 26000 standard:

1. Adopting ethical governance: ensure transparency, fairness, and integrity in decisions.
2. Demonstrate Leadership: promote the goals of the organization while respecting the interests of stakeholders.
3. Define a clear governance framework: establish and maintain a governance framework that is aligned with the goals, values, and culture of the organization.
4. Be responsible: ensure that decisions are made in a responsible manner and that results are monitored and evaluated.
5. Assume your decisions: the company must be responsible for its actions, in particular for their impacts on the environment, society and its stakeholders. This means taking responsibility for the consequences of your decisions and activities.
6. Promoting equity: treat all stakeholders fairly and provide them with clear and honest information on CSR practices and results.
7. Be transparent: provide clear and honest information to stakeholders about its CSR practices and results.
8. Be resilient: be able to adapt its governance to all internal or external situations.

These 7 principles of ISO 26000, help businesses adopt a responsible governance, to have a positive societal and sustainable impact while being 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 several problems, including the lack of a coherent and sustained CSR strategy at all levels of the company.

So, if we had to imagine an ideal CSR governance model, using the elements mentioned above, here is a small overview of the result:

• CSR infused in all teams: Each function and each employee would be involved in the CSR approach. They would understand the CSR issues and impacts for their team.
• Integration into the board of directors: CSR would be part of strategic discussions at the highest level of the company.
• Relay by regional and local CSR teams: Local and regional teams would play a key role in adapting and implementing CSR actions according to local specificities.
• CSR performance included in the goals of managers: CSR results would be integrated into the objectives and performance evaluation of managers, thus guaranteeing their direct involvement.

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

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Final advice: measuring your impact & ensuring responsibilities

For good CSR governance, it is important to always measure its impact and ensure that responsibilities are well distributed and effective.

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

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

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Conclusion

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

It makes it possible to structure and manage CSR initiatives, by 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.