17 Jun 3 Essentials Corporate Social Responsibility KPIs for SMBs
Key Performance Indicators all SMBs should look at
There is no question that sustainability management, also known as Corporate Social Responsibility (CSR), is now a mainstream discipline in large businesses. Research shows that the vast majority of the fortune 500 companies now disclose a CSR report. Of course, reporting on CSR practices does not always mean successful sustainability management, but this is an excellent starting point.
How about the SMBs (Small and Medium Size Businesses)? Do they share the same enthusiasm for achieving a triple bottom line (aka as the 3Ps: People, Planet, Profit) and what should they report on? Considering the significant number of SMBs, this is a crucial question. Without entering into complicated math, it is evident that the existing millions of SMB (defined as organizations with less than 500 employees) have a far more significant impact on environmental and social matters than the “SMB” acronym could lead us to think: There is nothing “small” once multiplied by millions of instances.
Dealing with sustainability practices is not always easy for SMBs for many reasons. At a start, they have to define what sustainability KPIs (Key Performance Indicators) they should focus on. While the decision is very much driven by the kind of business they are running, there are some fundamentals that all of them should consider, let’s call them the common core:
First, Carbon Footprint: Carbon emissions are well understood to impact the climate through the greenhouse effect. As such, SMBs must find ways to calculate their carbon footprint, which is the sum of carbon emissions (such as business travels, material transportation, hydro usage….) minus the possible carbon offsets SMBs either acquire or create, such as tree planting, solar panel installations and many other types of carbon “negative” projects (aka as Carbon Offset, see a definition here). Carbon footprint is a primary environmental KPI and also one that is relatively easy to calculate considering the support of many available tools.
The second KPI is paper usage. While paper recycling has been in mind, and practices, of many SMBs for decades, deforestation remains a primary sustainability concerns. While trees are considered renewable resources and energy, paper recycling processes must be augmented with a focus on limiting the use of inappropriate paper sources, known as uncontrolled sources – where forests are not appropriately replanted. Generally speaking, many SMBs have paperless aspirations or see the benefits of limiting wild deforestation, making this KPI both relevant and practical to them.
A third fundamental KPI is community contribution. As a KPI, it focuses on measuring how much help a firm is to the community through donation of employee’s time and monetary contributions. Encouraging and sponsoring employees to participate in community activities is excellent for both the firm’s brand and the community. As such community contribution is the KPI that addresses the People side of the 3Ps.
There are obviously many other KPIs that could be considered primary KPIs candidates for SMBs, including water and air pollution, but also many others. SMBs who are implementing CSR programs quickly learn to augment the list of social responsibility KPIs that matters to them and their stakeholders. Profit is clearly one of those KPIs and research clearly shows that profit is better when employees are engaged into a CSR program.
Tracking fundamental CSR KPIs has proven to be a great driver for the triple bottom line of firms of all sizes. The future will say if SMBs will outperform larger organizations in their adoption of sustainable practices.