Impact that lasts Moving from CSR to sustainability

Here is a rewritten version of the blog post in 50,000 words

What Impact That Lasts Moving from CSR to Sustainability

Corporate Social Responsibility (CSR) has long been a staple of corporate practice, often expressed through charity drives, donations, employee volunteerism, or environmental initiatives. While these efforts are welcome and increase goodwill, they typically exist on the periphery of business operations and are among the first to be sacrificed when corporate belts need to be tightened.

However, as businesses face increasingly stringent regulations, rising stakeholder expectations, and growing threats from the climate crisis, the imperative to move beyond CSR is growing.

Sustainability A Strategic Imperative

Sustainability, in contrast to CSR, is a broader and more strategic concept. It seeks to embed environmental, social, and governance (ESG) factors into the very core of a company's operations, strategy, and decision-making. While CSR initiatives can be part of a sustainability strategy, they are not sufficient on their own.

True sustainability requires aligning business models with long-term environmental and social goals, ensuring companies meet present needs in a responsible manner. A strategic framework is essential for this shift.

A Strategic Framework

When CSR is treated as an ad hoc add-on, companies miss the opportunity to leverage their core competencies. However, when firms integrate sustainability into what they already do well – such as logistics, risk management, or product design – they create both business value and societal and environmental good.

The first step in moving from CSR to sustainability is to ask What are we truly good at? How can this expertise be applied to create impact? A company must determine how it can align its CSR initiatives with its core business strengths.

Deloitte's Sustainability Value Framework

At Deloitte, we use a sustainability value framework that helps organizations assess potential initiatives against their business strengths and performance. This framework revolves around three drivers that executives already understand revenue growth, cost reduction, and risk mitigation.

This model prioritizes projects that open new markets or allow for premium pricing that creates revenue growth, reduce resource use and so reduce costs, or improve social and environmental due diligence and governance mechanisms to mitigate risk.

Operationalizing Sustainability

From our work with local clients, we have seen and designed various means by which companies are moving beyond CSR toward operationalizing sustainability. Manufacturing companies can look at improving their resource use and ensuring labor rights are upheld across supply chains.

This may be done through conducting energy and human rights due diligence audits to identify points of energy efficiency as well as ensure fair trade and ethical labor practices are upheld by vendors. Businesses that have done so have improved their compliance with global standards, reduced utility costs, and strengthened their competitiveness in export markets.

Financial Institutions A Key Role

Financial institutions can leverage their expertise in risk management and capital allocation for sustainability. In line with the Bangko Sentral ng Pilipinas' sustainable finance framework and directives, banks have begun rolling out environmental and social risk management systems. This enables them to integrate environmental and social risks into their credit and risk management systems, resulting in more climate-resilient portfolios.

Banks can also develop loan products that incentivize clients to engage in sustainability projects, increase capital and/or debt financing for medium, small, and micro enterprises, and provide banking options for the currently unbanked. In doing so, they can fund the transition to a greener and more inclusive economy, meet regulatory expectations, and appeal to an increasing pool of investors and international partners keen on sustainable finance.

Consumer Goods Businesses Designing for Sustainability

Consumer goods businesses can design programs to recover the plastic packaging they use. This enables them to comply with the Extended Producer Responsibility Act of 2022, which mandates large enterprises to take accountability for the entire lifecycle of their plastic products while also improving resource use, regulatory compliance, and stakeholder engagement.

Building Impact that Lasts

The path from CSR to sustainability is a journey. When an organization aligns initiatives with what it already does best, a strong foundation for long-term growth is built, while addressing urgent social and environmental needs. The companies that succeed in this transition are those that go beyond seeing CSR or sustainability as an add-on and instead align them with their core business.

Conclusion

In the Philippines, where sustainability has become a business imperative, businesses that make this shift will produce win-win scenarios for both the country and the business. Ma. Celina Anonuevo is the sustainability and emerging assurance team lead at Deloitte Philippines, a member firm of the Deloitte network. Shawntel Nicole Nieto is a senior consultant with the sustainability and emerging assurance practice of Deloitte Philippines. For comments or questions, email [email protected].

Keywords Sustainability, CSR, environmental responsibility, social responsibility, governance, strategic framework, business value, societal good, operationalizing sustainability

Edward Lance Arellano Lorilla

CEO / Co-Founder

Enjoy the little things in life. For one day, you may look back and realize they were the big things. Many of life's failures are people who did not realize how close they were to success when they gave up.