CSR - Doing the right thing

For the past few years, corporate social responsibility has been a popular topic with insurers and brokers that have been keen to shout their environmental and charitable credentials from the rooftops. Yet, as the recession bites, CSR is no longer at the top of many corporate agendas. However, there is still the opportunity to reap benefits at a relatively low cost to brokers that implement well-considered campaigns.

The World Business Council for Sustainable Development estimates that good practice in energy consumption can reduce a company's greenhouse gas emissions by as much as 80%. The Empire State Building in Manhattan is receiving a radical $20m green makeover to cut greenhouse gas emissions and energy use by 40%, alterations that aim to generate annual savings of approximately $4.4m. While very few brokers are based in buildings that could make such dramatic savings, small changes to offices can save energy consumption at a relatively low cost.

Simple energy consumption wins can be achieved in the office, such as installing energy efficient light bulbs, closing windows, recycling waste and reviewing heating and air conditioning systems usage policies.

Since implementing energy saving measures in its offices in 2007, Allianz has made considerable savings. A 'switch off' campaign in 2008 saved an estimated £66,000 during the year and bin-less offices (where staff bins were replaced with sets of recycling bins in each area of the office) cut the amount of waste sent to landfill by half, therefore making savings on landfill tax. Next, Allianz plans to review its manager-level car policy, which is anticipated to save money on fuel and car tax.

Jane Owen, director of sustainability at Aon, believes that setting out to save money is an essential aspect of a successful CSR campaign. She says: "Initiatives adopted as part of a CSR strategy should either save money or make money, reduce risk or enhance reputation - all fundamental parts of running a business. Brokers run businesses, not charities."

Wide remit

It is not only environmental issues that provide enhanced-value CSR options. By championing charitable staff initiatives, brokers have the opportunity to make a significant difference to their local communities at relatively little cost.

Broker Independent Insurance Services is involved in charitable giving on a regular basis. The broker has held monthly dress-down days for a decade for which everyone donates £2; each member of staff then takes their turn in nominating a charity.

Ray Johnson, the proprietor of Independent, believes that small brokers without large charity budgets can often make a difference by offering benefits in kind, such as printing or helping charities find insurance for an event: "Little things like buying birthday and Christmas cards direct from charities can make a difference because then they receive 100% of the proceeds. Since 1991, we estimate that we have helped to raise around £750,000, which is a lot for a small business such as ourselves. Imagine what a difference we could make if every small company raised this kind of figure."

In 2006, Independent created a local half-marathon event with its local Rotary Club. The broker pays for postage, printing and participant registration for runners and also provides public relations support, with each staff member putting work into the event - often outside normal working hours. The half-marathon was such a success that it is now run every September and, in 2008, it raised £19,000 that was then distributed to local and international charities through the Rotary Club.

Groupama is involved in both local and national charity initiatives and corporate services director Paul Picknett highlights that these drives have incurred a very low cost to the insurer. Some of its more attention-grabbing efforts include a company triathlon, in which approximately 40 Groupama employees from the managing director to graduates participate every spring. The insurer recently set a challenge for the members of its graduate scheme: modeled on television show The Apprentice, the graduates were split into two teams and challenged to raise as much money for charity as they could with a budget of £100 for each group. The two teams raised over £6,000. Picknett says: "CSR has to touch on everything you do if you want to be really successful at minimal cost. It does not have to cost the business much when it is done properly."

Morale

Charitable and environmental campaigns can bring wider benefits to a broker than just fulfilling CSR requirements. A commonly acknowledged benefit of a well-run CSR campaign is its positive effect on staff morale. Lisa Ashford, head of commercialisation at carbon market specialist Eco Securities, has seen a large number of companies using CSR policies as a key tool in raising employee morale. As an example, Ashford notes that Aviva's staff has incentive packages that include CSR targets: "Employees really want to feel that the brand they work for stands for something."

Towergate founded its own charity, the Towergate Charitable Foundation, in 2005. Since then, the broker and its staff have raised over £2m for hospices and other good causes, of which £1,036,793 was donated in 2008. Paul Dyer, non-executive director at Towergate, says that the foundation has had a positive effect on staff morale: "In our experience, it is quite clear that involving staff in charitable work has been a success. This can be seen from the number of staff that have submitted their own stories to our website."

Stuart Reid, chief executive at Bluefin, believes that, during times of economic strife, CSR programmes play a more important role than ever in raising staff morale. Reid and his team at Bluefin are working on forming a company-wide CSR programme that will include pulling together the existing CSR initiatives from Bluefin's legacy companies and identifying ways in which the broker can move towards a robust, unified approach. He says: "In times of recession, it's important to retain and recruit the right people. It's key that people in a business feel that the company has a future, that it's not so focused on the present that it cannot see further than today."

As well as raising the staff morale, it is also possible to use strong CSR credentials as a tool to attract new talent to your business. Richard Foulerton, corporate social responsibility manager at Allianz, believes that job applicants now place a much higher value on CSR than in the past: "Since implementing a CSR policy, Allianz has seen a lot more interest from applicants. People become proactively involved straight away, especially on the charity side."

CSR campaigns can also help reinforce relationships with both current and potential new clients. Since the launch of the Towergate Charitable Foundation, Dyer has seen many Towergate clients showing an interest in the work that the broker does. He remarks: "A lot of our clients go on the website for our foundation. If they were not interested then they wouldn't have gone to the trouble of going onto the site to see what we are up to."

For many clients, especially those with strong CSR credentials themselves, such policies are becoming an important part of the tender process when choosing a broker. Foulerton notes that tender documents will often contain a specific CSR questionnaire, on which he comments: "Companies with good CSR policies want to work with other, similar-minded companies."

By working with charitable groups such as the Prince's Trust Insurance Leadership Group, brokers can not only have an impact on the community around them and their current clients but they can gain new clients too. As part of its work, the ILG offers business mentoring for disadvantaged young people to help them start businesses.

Jonathan Davey, a director at SSP, says that brokers are in a better position to offer this kind of support than most other insurance professionals: "Start-up businesses are much more likely to flourish with a little support, especially from brokers that have gone through the process of starting up small to medium-sized businesses themselves. Therefore, by working with groups such as the ILG to support these businesses in their local environments, brokers can develop longstanding relationships with these entrepreneurs that may be clients for many years to come. Insurance companies often do not have this opportunity because they are usually not as strong in the regions."

Starting a campaign

When implementing CSR policies such as bin-less offices, many will require all staff to 'buy-in' if the scheme is to be successful. Therefore, before bringing in CSR initiatives, managers need to make sure that their staff understands what the aim of the campaign is and what each staff member's role is within each initiative.

Dyer believes that, while establishing staff involvement from an early stage is important, it is equally necessary to develop champions within the management team in order to found a CSR policy successfully: "Most of us would agree that developing a CSR policy is a good thing but we all need the stimulus and demonstration to start it. Once these champions have everyone thinking about doing their part then it will become an organic process, with enthusiasm building month on month."

Davey agrees: "Much of what can be done, especially with environmental policies, is about changing habits. For example, staff members in smaller businesses often do not think of what can be recycled, such as toner cartridges. Employees need to understand that just because it is the way things have always been done, it does not make it right."

When implementing a CSR policy, one quick and easy place to start is by examining your energy consumption because there are many simple measures, such as switching to energy-efficient lightbulbs, that pay back almost immediately with only a slightly raised initial outlay. However, in order to cut energy consumption efficiently, you need to be able to measure where the most energy is being used.

Help available

There are many organisations that can help measure broker energy consumption; a range of services is on offer, such as carbon footprint analysis to systems for measuring and pinpointing energy use within a building. One company that offers carbon footprint analysis is Eco Securities. Ashford believes that, by calling in an energy-use auditor, brokers can pinpoint areas where it will be easy to save energy as well as provide good financial value in the process. She says: "Auditors can put together a carbon footprint and use the results to focus on key areas in which you can reduce emissions with little investment cost and many energy savings."

Charities themselves are also aware of the benefits that corporate relationships can bring so will regard contact with companies large and small favourably. They can often offer invaluable advice to managers looking to have their companies involved in charitable work. When Towergate founded the Towergate Charitable Foundation, it entered into formal partnership with a limited number of charities that were chosen by staff.

One of the charities Towegate has entered into partnership with is the National Society for the Prevention of Cruelty to Children. Charities such as this have dedicated corporate relationship managers to help companies commence with charitable giving. They give guidance on how to engage employees and offer fundraising ideas, help with communications - including public relations material - and also administrative support resources such as sponsorship forms. Alice Payne, head of corporate partnerships at the NSPCC, remarks: "We love to share our expertise with any businesses that ask. We know what has worked well with other corporate partners and can really help staff and managers understand what they can do to help locally and nationally by explaining exactly where their money will go. We realise that a company does not have to be huge in order to raise a lot of money for charity."

Software houses and other technology providers can also help. There are several options that, when implemented correctly, can help reduce the negative impact a broker business has on the environment. As a profession, broking uses a lot of paper. Therefore, by implementing a well-considered document management system, a broker can reduce the amount of printing and paper stored on site significantly. Davey believes that document management systems can be a good place for a broker to start when considering cutting its use of paper. He comments: "It takes a lot of getting used to but staff are more productive when they have the hang of it."

A lot of business is now transacted online but the fulfillment exercises are still usually paper based. Secure document exchange solutions can tell when electronically transferred documents have been received and opened and they add an audit trail to all information as well. This would reduce the need for printing while potentially improving customer service; many customers also prefer to store data electronically. However, these systems can be expensive to implement and maintain.

Another option that brokers can take, as an alternative to keeping information technology equipment in-house (which can use up significant quantities of energy), is to use fully managed services from software houses such as SSP and Fusion. There are also dedicated IT service providers that specialise in this area (see PB's Focus on outsourcing, Outside In, May 2009 pp.23-28). Davey says that outsourcing to fully managed IT solutions is becoming increasingly popular: "Over the last 12 months, the numbers of brokers using our fully hosted offering has grown by nearly 20%. Not only will this, in most cases, bring brokers' energy consumption down but it can also be cheaper than keeping expensive equipment in house."

There are several insurers that pride themselves on their years of experience with environmental and charity work and are they often willing to share their expertise with broker partners. Bluefin received help from parent insurer Axa in putting together its new CSR policy. Reid notes: "This is an area where having a large parent such as Axa is really beneficial. We can use some of its experience as well as the wealth of experience we have internally from the various businesses - and people - we have acquired."

Tony Cabot, director of global programmes at XL Insurance, believes that insurers also have a role to play in helping their broker partners launch CSR policies: "Insurers can help brokers in many ways. Co-development of sustainable products, for example the renewable energy field and carbon capture, is number one on the list. The brokers will look to the insurers to understand what part of the sustainability question is transferable. We have had discussions with brokers regarding the micro-insurance products that are available to mitigate catastrophic weather conditions such as drought, wind and flood. A CSR policy will be developed when management understands that not doing anything is not neutral but could be negative. Insurers can make these issues known to our brokers but they must take them on board."

SHOULD BROKERS ADVISE ON CORPORATE SOCIAL RESPONSIBILITY?

There is debate over whether or not advice on CSR falls beyond the limits of the professional relationship between brokers and their clients. Paul Dyer, non-executive director at Towergate, believes that brokers can offer CSR advice to their clients only where they have strong relationships in place: "CSR advice usually falls outside the parameters of a professional relationship but well within any personal relationships brokers may have with their long-term clients."

Jane Owen, director of sustainability at Aon, thinks that brokers with risk management offerings are in a good position to offer CSR advice to clients: "CSR is essentially part of risk management and so, as risk advisers, we should be able to advise, particularly with regard to climate change."

CASE STUDY: PETER MOODY, COLEMAN INSURANCE SERVICES

"Coleman is active in the charity and not-for-profit sector both through our insurance and community activities. We believe our role to be more than just seeking competitive quotes for our clients. Due to our own enthusiasm for charitable work, we like to think that Coleman understands the challenges charities face today and therefore we can find fresh approaches to insurance for these organisations. For example, we organise an annual charities seminar on topical subjects, which is always well attended.

"I am a trustee for a number of charities and a keen fundraiser and I try to instill a similar enthusiasm in our staff. Our staff supports charities by participating in fun-runs, swimming marathons, the Purbeck boat push, dress-down days and our annual golf day, to name but a few. It is our aim to encourage our client's insurers to participate in supporting charitable events and this has been a successful initiative."

ALLIANZ AND THE JUBILEE SAILING TRUST

Allianz Commercial is a corporate sponsor of the Jubilee Sailing Trust. As well as financial donations and working in partnership with the trust, the Voyage to Development scheme was launched in 2007 as part of Allianz's management development programme. Members of the management teams are sent on a 'voyage', on which they are paired with a disabled buddy. "Everyone that goes finds it hugely motivational and now we are offering business advice to the trust too," says Richard Foulerton, corporate social responsibility manager at Allianz.