CSR, CSV and now ESG?

First it was CSR then it was CSV and now who's ESG? Let's breakdown these often-heard concepts that all relate to private sector's contribution to sustainable development.

Yes, first it was CSR. Corporate Social Responsibility, is essentially about taking resources from the business, and investing those resources in being a good corporate citizen. Companies, big or small, implement policy or practices with the broad goal of contributing to the well-being of communities and society.?Activities can range from strategic business management, to sponsorships and philanthropy.

Oftentimes, CSR activities?directly enhance the reputation of a company and strengthen its brand. I've seen CSR teams that are part and parcel of marketing and communications departments. Don't get me wrong, CSR activities can make a valuable contribution to poverty reduction and sustainability. But, more and more, businesses have been shifting to CSV for a better managed and profitable impact that goes beyond good press.

So what is Corporate Shared Value or CSV?

It is about aligning how the core business operates—strategy, structure, people, processes and rewards—in order to deliver triple bottom line (TBL) returns. Yikes! Another acronym. TBL is about a business aiming for three simultaneous goals: social, environmental and profit goals. Unlike CSR, competitive strategy is at the heart of CSV.

Why does CSV make sense in this day and age?

When companies are interested in the longterm success of the business, it can't be done without incorporating the social and environmental needs of the customers they serve. Charitable donations are important, but expanding engagement so that core business models improve the well being of people and the planet, can help companies reduce or eliminate negative externalities and earn a profit. Think about it. If you're a food company, doesn't it make sense to develop affordable, nutritious food today that brings people out poverty and sustains your customer base for generations to come?

How does this all come together under ESG?

Companies now know they need to focus on their TBL, but the next question is how to do it and do businesses ensure they are on the right track? ESG means using?Environmental, Social and Governance criteria to evaluate companies on sustainability. These standards are measured both externally relating to the impact they have on their customers and communities they operate in, as well as, internally regarding how they treat their employees and minimize the negative environmental impact of their operations. Recycle bins, solar panels, less corporate air travel, yes, all of the above!

Companies have been increasingly moving towards CSV and looking to the United Nations for collaboration on initiatives that meet the SDGs, Paris Agreement and Agenda 2030. Many are finding they can not be competitive or even attract investors without adopting ESG as part of their core business.

There are many things that can go terribly wrong as more companies enter the sustainable development sphere. I work on risk management and anti-corruption and do see the challenges. But, I am still unabashedly optimistic about what private sector can bring to the table. In my current role with UNDP I have seen some of the most innovative solutions to world challenges come out of private sector partnerships in agriculture, fintech, confectionary and more. So let's keep the ball rolling on CSV and ESG and get more corporates to flick the 'greenswitch' as SG Antonio Guterres says.