Member Article

How technology can help manufacturers with their CSR

The realm of Corporate Social Responsibility (CSR) is one that is synonymous with constant regulatory change. Between the years 2000 and 2010, some 30-40 new industry and company standards have appeared, driving the need among companies to handle these changing requirements in an efficient manner.

While it’s common understanding that CSR relates to a company’s responsibility for its effects on the environment and impact on social welfare, for process manufacturing organisations in industries such as chemicals, food and beverage, and pharmaceuticals, CSR can have broader meaning.

Challenges and opportunities

The largest impact of CSR is probably in the chemicals industry where the focus is on a lifecycle view of emissions and pollution related to products. Raw materials will potentially contain substances that are harmful to the environment or to human beings. The manufacturing process as such may also cause emission of these substances.

The reduction of hazardous substances, therefore, is a critical issue. Chemicals manufacturing is a high energy-consuming business; the end-use of manufactured products will likely cause exposure of potentially harmful substances, and waste management and recycling are processes that need to be monitored and evaluated from a CSR perspective.

In the food and beverage industry, the challenges are different. Here it’s important to be able to guarantee that the raw materials – whether they’re coffee beans or carrots – have been produced in an ethical and sustainable manner. Internal manufacturing and distribution processes must be properly designed and solid enough to prevent mistakes that in the end might cause product recalls and, potentially, huge damage to the company’s credibility and brand reputation.

Whatever the industry, the importance of and awareness about CSR has increased dramatically over the last decade. This is largely down to new legislation such as REACH, with a massive impact on the chemical industry within the European Union, or standards such as ISO 26000 that provides guidance on how businesses and organisations can operate in a socially responsible way.

Another aspect of CSR is as a value creator. By innovating and promoting a sustainable business model, a company can raise its image as a responsible and ethical organisation to do business with, work for or invest in. This can create competitive advantage in the marketplace – important from an investor’s point of view. Successfully implemented CSR and sustainability efforts can have a positive impact on a company’s value and results and better integrate the business with the community.

Steps to follow when developing a CSR strategy

• Calculate and analyse the environmental impact of your entire supply chain
• Analyse the complete product lifecycle
• Increase transparency
• Comply with – and even anticipate – eco-legislation requirements
• Enhance your brand
• Mitigate risk
• Improve your bottom line

The above steps can all be done by using data that’s already available in your enterprise applications. Clearly, accurate and reliable CSR data will become increasingly important.

Companies are under pressure to document their CSR activities and integrate sustainability and financial reporting. Legislation, regulations, industry practice and customer demands all drive the need for process improvements, reporting and declarations related to CSR.

The problem for many companies is that either they have no system in place, face limitations in their current systems, or rely on third-party products or integration for CSR data collection and reporting. It’s therefore important to define a strategy for CSR and start to introduce solutions that support CSR and sustainability initiatives.

Putting IT to practice

One example of an organisation that has been able to improve its environmental compliance through its IT is Saab, the world-leading provider of solutions, products and services to the global defence and civil security market.

Saab routinely comes into contact with products and components whose contents are subject to restrictions and stringent legislation. In this industry, product lifecycles are typically very long - from concept development to decommissioning, system platforms may be around for as long as one hundred years. During this time, legislation and substance restrictions will be changed many times over, which means that the manufacturer or the supplier must have an open-ended tracking solution that can accommodate new substances and restrictions.

Saab implemented Eco-footprint Management software from IFS to improve the company’s environmental reporting and manage risk more efficiently on a global scale. Saab now has the ability to enter environmental data for each product at the source level of the product lifecycle, creating a central repository where all product data could be tracked, queried, and analysed.

The organisation will also be alerted of any potentially harmful substances built into the product, or any emissions caused in the manufacturing, transportation, end-use and decommission processes. This helps Saab comply with these more stringent regulations such as WEEE, RoHS and REACH, as well as quality assurance to support standards such as ISO 26000.

Planning for the future

It’s clear that legislation regulating environmental reporting and substance restrictions will grow increasingly rigorous for every passing year. In addition, industries will self-regulate as more and more companies are pressured into greener business processes by consumer and shareholder groups.

With the playing field in constant change and new regulations appearing, it’s vital that organisations have the right tools in place to manage risk and maximise efficiency across the entire supply chain.

This was posted in Bdaily's Members' News section by Antony Bourne .