CSR Stories Can’t Be Created From Thin Air

CSR at Lanxess

German Chemical group, Lanxess, recently spun off from its Bayer heritage in 2004 in Singapore. The group’s core business comprises of the development and sale of plastics, rubber, specialty chemicals and intermediates. Strongly believing in sustainable development, the group also considers environmental compatibility and social responsibility to be of equal importance.

Lanxess’ Vice-President & Head Corporate Communications, Kaye Lim, who recently spoke about analyzing current Trends in sustainability and CSR at the CSR Global Summit 2009 in Singapore, talks about sustainable investment and development at Lanxess with the CSR Digest.

CSRD: How do you get away from the situation where people see CSR as a PR initiative?

KL: Maybe we could look at Lanxess’ three main pillars of corporate social responsibility. First of all, we talked about education, education and empowerment of youth. So we looked at areas on how we are involved. I think globally, we are very active in term of sponsoring — for example, the Chemistry Olympiad — because we do believe in grooming the youth so that when they graduate, there is an overall sustainable workforce in that area. So that’s education.

Then we have another pillar which supports the intercultural exchange, for example, the Young Euro Classic performance which is a social exchange bringing together young musicians from the People’s Republic of China and Germany to perform together as an orchestra. We supported this in 2007 and 2008.

So in many areas, I agree that corporate communications takes a lead because CSR has a major function under corporate communications.

But if you look at Lanxess’ last pillar, which is environmental sustainability, no amount of PR is able to give you the concrete results about CO2 emissions, or how you protect the environment. These are not things that corporate communications can take the driver’s seat. I think what we can do, from the perspective of PR, is we look at the communication story that people understand, that people embrace and know, what the company is doing for the environment, for example, Lanxess’ efforts in reducing laughing gas (Lanxess has two laughing gas reduction units – LARA in short). In the chemistry or semiconductor or IT industry, there is a lot of jargon. So what corporate communications can do is to look at the technicalities and make people understand, but we do not create the stories from thin air.

But I think what we are seeing now is really a shift towards engaging corporate sustainability beyond CSR. It is the time for us to continue to look at innovation as a means to create value to sustainability. So the case examples of LARA and Co Gen (Lanxess is building a cogeneration plant on its Brazilian site) are all examples of how we actually embrace CSR as a company. That’s why in a sense I feel it is important to point out that Lanxess is really learning and growing.

But it’s not that we started from a non-conformist situation to a sudden turnaround. It was really a gradual evolution for us.

CSRD: Do you have a lot of R&D, so that you have innovation in your products and processes?

KL: Yes, good question. Innovation now at Lanxess is a group function. What that means is that it becomes independent. Because the way we run our company is that we’re very business group focussed. Having an innovation business group, which is independent, gives it a lot of credibility to look into process innovation and product innovation.

Sometimes, it is not that you need to totally need to re-invent the wheel, or create a new invention, but really it just going through the whole value chain. So we’re really excited about what the innovation function will be able to bring forth for all of us in various business groups.

CSRD: So just to understand, innovation is a separate business unit but then it covers your whole entire business including IT to HR. But don’t they need to be part of a particular business group to be able to understand how to innovate within that business group?

KL: Good question. I think I should also explain that, all the while, innovation is within the company. So each business unit has already its own innovation R&D team, but we know there’s a need to create a special unit so that we are able to look at processes, so that they can be shared between different business units and to see those synergies.

CSRD: Do you think CSR is a trend?

KL: I don’t think it is a trend. I would say that it is a mega trend that will last. I think CSR is more of a philosophy, which should not go away.

CSRD: How can the business avoid the situation where public sees CSR activities as just PR?

KL: At the end of the day, I believe it boils down to the deliverables. I think there must be concrete evidence in terms of what that programme has contributed. I still do not believe that any amount of PR can really disguise any lack of concrete evidence.

CSRD: Do you think businesses should cut back on what they are doing in term of CSR during an economic downturn?

KL: I think we have to be pragmatic. As a company, employees are of course the most valuable resource. And if the company is not doing well, everything needs to be done to save jobs and the people. I think if you talk about other CSR activities, they need to be re-evaluated very closely. Any programmes you run will be secondary to what you need to do at the immediate level.

CSRD: How can businesses use the economic downturn to their advantage in term of CSR effort?

KL: From how we see things, during a downturn people’s livelihood are affected. So education is an area that we can be engaged in – like paying the tuition fees in India or cultivating talents with chemistry students. I think this should not go away, in fact, it should continue.

In term of sustainability, I think, it should continue whether there is a downturn or not. I think there are ways to continue the momentum. Perhaps during the downturn, there might be better opportunities, for example, lower cost of raw materials in a cogeneration plant.

CSRD: CSR have different faces in different region? What do you think is the face of CSR in Asia or South East Asia?

KL: I think we take a lot of cues from Western World. If we look at other initiative like consumer rights, again Asia Pacific will always look to the West because they are more developed in that area. Similar with CSR. Because the way in which we do business is more global in nature. So I think with this global borderless way of trading, we find these practices will find their way to Asia in a more seamless manner.

I think we still need to continue to take cues from the West, but I do believe that in longer term, CSR in Asia will take on its own colour and its own light, because CSR at the end of the day needs to be localised. I do believe Asia will be able to begin to develop its own practices that the West will be able to adopt. Even Confucius teaches us all about doing good and giving back to society, so that it is inherent with Asian cultures in the first place. I don’t think it is something new. It is just how we incorporate that in our practices. These values have always been inherent in Asia Pacific cultures.

CSRD: More and more charitable bodies o NGOs run their operations like businesses, while more and more businesses have giving or charitable arms. What do you think of this development?

KL: For me, in terms of how NGOs should be run, or how companies should be run, first and foremost, I think corporate governance is important because a company must be accountable, ethically not just economically, to your stakeholders. I think, NGOs should be as well, sometimes people may say even more so, because a lot of public give their funds to the organization. If you look at enough Singapore case studies, there’s growing sentiments that NGOs must really be accountable. I’ve no deep concern in the structure but I’d like to see transparency whether in an NGO or a company, especially whenever they deal with CSR.

CSRD: Any advice to students who want to work in CSR or in a social enterprise or NGO?

KL: I think any students who want to move into this area must understand that CSR is a very wide field. And each field is also very specialized. To have a core understanding is very crucial.

The choice of working with an NGO or corporate is down to a person’s passion because, no matter what, each organization has its own priority. It is important to be very clear.

To me, I went into a corporation that holds CSR close to its heart, not just something which is nice to have or a one-off initiative. I think that kind of work is more fulfilling because, then, we find that the company will look at it long-term and be valued by its stakeholders. It is a very crucial criterion to those who want to venture into this area.◊