The Role of CSR in Smart Cities

When we think of cities, we often think of job opportunities in stunning skyscrapers and the ability to further advance our careers at successful companies. These assumptions take root in the significant role corporations play in the big cities. Corporations and big firms have always gravitated towards the big cities and historically, have had a tremendous effect on how cities were built and designed. Today, they continue to have an impact not only on the physical appearance of cities but on the ways of life for the cities residents, the rising populations drawn to opportunities and the quality of life. Although the quality of life depends on many things, one key element that plays a significant role in the life of a city’s residents is the amount of dedication to sustainability. 

Climate change, global warming and high levels of greenhouse gases are some of the most pressing issues in current times. It is not a secret that the Earth has suffered serious damage. There is a need to actively work to preserve the environment and reverse some of that damage instead of continuing to operate in the same ways that got the planet in the state it is now, which needs to be done on a global scale. Cities are responding by recreating themselves as smart cities, and corporations are responding with CSR strategies. Let’s discuss how these two courses of action are related and how they’re both parts of the solution.

Key Highlights

  • Corporate Social Responsibility (CSR) is the commitment of businesses to be sustainable and ethical in their practices. 
  • Implementing CSR into a corporation has benefits for both the planet and the business itself. 
  • From a business standpoint, these benefits include rebranding, employee engagement, increased brand awareness, more customers and more partners. 
  • Smart cities are ecosystems of innovation and technological solutions that highlight the importance of sustainability. 
  • Sustainability is at the core of smart cities and CSR, making them both part of the solution. 
  • By committing to sustainable and ethical practices alongside the city in which they operate, a business is demonstrating its dedication to the cause even further.
  • The EU has launched a Non-financial Reporting Directive aimed at large companies that focuses on ensuring transparency on matters other than their finances, such as sustainable practices and human rights policies.

What is CSR?

CSR stands for Corporate Social Responsibility, and it is the commitment of businesses to be sustainable and ethical in their practices by integrating environmental, cultural and social goals into all levels of their company. This means being aware of the impact the company has and ensuring that their impact is a positive one, particularly in regards to human rights and the environment. The way in which CSR is implemented is dependent on the type and the size of the business but branding a business with CSR means playing a part in the sustainable development of the community they are in.

Key features of CSR, as outlined by the United Nations Industrial Development Organisation (UNIDO), are: 

  • Responsible sourcing of materials, 
  • Preservation of resources, 
  • Anti-corruption measures, 
  • Upholding labour standards and good working conditions, 
  • Eco-efficiency, 
  • Protection of the environment, 
  • Gender balance and social equity, 
  • Human rights.

Examples of companies who do CSR

  • Levi Strauss & Co. has proved their commitment to CSR and sustainability through numerous initiatives which include their Worker Well-Being initiative, which focuses on protecting the rights of workers and providing them with health education, family welfare programs and financial empowerment, and Levi’s® WellThread™ products that are created with rain-fed Cottonized Hemp, Water<Less® technologies and recycled materials. They are also making their puffer jackets with recycled plastic bottles and waste and have saved more than 4.2 billion litres of water from the finishing process since introducing their Water<Less® technologies in 2011. 
  • LEGO also commits to sustainability practices and has even been named a World Wildlife Fund Climate Savers Partner. Their energy consumption is 100% balanced with renewable energy, and their sustainability goals include having all LEGO packaging be made from renewable or recycled materials.
  • Microsoft is a tech giant with many initiatives, and one of them is an innovative one called AI for Earth that uses AI to directly address sustainability challenges all over the world. This initiative includes AI for Earth grants, which provides sustainability projects with financial resources, partnering with organisations and aiding them with cloud computing services, and developing technical tools that support sustainability, including APIs, data, infrastructure, open-source code and research.

Why is CSR important?

Implementing CSR into a corporation has benefits for both the planet and the business itself. 

A report published by the CDP revealed that the distribution of greenhouse gas emissions is concentrated, and the 100 companies they tested have been responsible for 71% of all global industrial greenhouse gas emissions. This report isn’t the only one that focuses on the negative environmental effects corporations have had, but rather there is plenty of data that proves this. 

Corporations, large and small, attempt to reverse this damage and turn their negative impact into a positive one by rebranding and committing to CSR. Each year, more and more companies are implementing CSR strategies into their operations, which will have a positive effect on the environment and the planet. In 2020, CDP compiled their ‘A List’ of environmental leaders, and a total of 313 companies ended up on this list, which was a 45% increase from 2019. 

From a business standpoint, CSR benefits the company in multiple ways. 

Rebranding. CSR can be used by a business to rebrand itself as environmentally and socially conscious, which will improve its image as a whole. That is because CSR is not just philanthropy, but it involves a much deeper commitment to these sustainable and ethical values. Although philanthropy is often one of the initiatives in a company’s CSR strategy, particularly when it comes to smaller companies, CSR represents an entire system of beliefs and values that are meant to be ingrained into the company’s culture to an extent in which it is present at all levels of a company. CSR is a sign that the company is taking sustainability seriously. 

Employee Engagement. When employees feel valued and seen, they perform their duties better and are more likely to stay with the company for a longer period of time. CSR is an effective strategy to accomplish this and to create a work culture of appreciation and growth. As can be seen from the Levi Strauss & Co. CSR example, CSR also carries over to the way employees are treated at work and the benefits they receive, ensuring that there are ethical work conditions in place. Additionally, with a good brand image thanks to CSR, employees will feel better and prouder to be part of their company, and a larger number of candidates will want to join the company. 

Increased Brand Awareness. When a company commits to sustainable and ethical practices and actively participates in and launches initiatives that are in line with these beliefs, there will be an increased awareness of the company. Small businesses active in their communities will be increasingly popular, and larger businesses have the opportunity to have their initiatives on the news. These sustainable and ethical practices also make for great content on social media which further expands the exposure. 

More customers. Customers want to buy services from companies they feel proud to give their business to. When a company implements sustainability strategies into the way they produce their product and provides their employees with ethical work conditions, customers will feel better about their purchase and will be more likely to make more purchases in the future. Additionally, having transparency builds trust which results in long-term and stable customer relationships with the brand.

More partners. Similarly, as with customers, companies want to work with companies that have a good image and are appreciated in the communities in which they operate. Branding a business as sustainable and ethical makes it more attractive for prospective partners and also makes it stand out from its competitors.

What are smart cities?

Smart cities are ecosystems of innovation and technological solutions that highlight the importance of sustainability. A smart city is a city that takes advantage of technological advances and inventions such as IoT (Internet-of-Things) and shapes them into citywide solutions that improve the quality of life and have a positive impact on the planet. These solutions are responses to existing challenges and can be seen in various components of a city including public transportation, energy distribution, water and waste management, infrastructure, security and healthcare. 

To read more about smart cities, visit our blog post where we go more in-depth into this topic.

What does CSR have to do with smart cities?

As ecosystems of innovation and sustainability, smart cities facilitate the development of these types of strategies throughout their communities, and their awareness also often has a global reach. The more smart city initiatives and projects an urban area undertakes, the more it encourages organisations to do the same. That also works the other way around, as thriving organisations allow cities to grow and improve alongside the businesses in their communities. 

Just like smart cities are environments that drive the active involvement of residents, businesses and visitors, CSR also creates this type of engagement which starts with them and their employees and then spreads further to other businesses, their communities and their customers. When smart cities and CSR come together, their engagement efforts are combined and grow at a more rapid pace, achieving better results. 

Sustainability is at the core of both smart cities and CSR, and they are both parts of the solution. Therefore, their sustainability strategies will be more effective when they are integrated and when businesses and cities work together to achieve their set goals. This type of integration will drive more engagement from the community and attract more attention and awareness to the organisations as well as the issues at hand. In addition to this, smart cities and businesses can combine their resources and create smarter and better solutions. 

The EU recognises the significant impact companies have on the life of residents and on the city and has launched a Non-financial Reporting Directive as part of the EU Green Deal and their goal to be climate-neutral by 2050. Non-financial Reporting is primarily aimed at large companies and creates transparency on how the company operates. Under this directive, companies must disclose non-financial information, such as their treatment of employees, diversity at the company, policies on human rights, anti-corruption and business models. 

For businesses implementing CSR, being an active part of a smart city will further improve the benefits of CSR, such as rebranding, employee engagement, increased brand awareness, more customers and more partners. By committing to sustainable and ethical practices alongside the city in which they operate, a business is demonstrating its dedication to the cause even further, which will improve its image even more and drive an increased number of customers and partners their way. 

Here at NaviParking, we have a parking solution that combines the concepts of smart cities and CSR. As a whole, we create technological solutions which are elements of smart cities, and one of our solutions is aimed at corporations that implement CSR. NaviParking Enterprise is a parking solution for corporations that enables parking optimisation and monetisation. By simplifying the parking process, it shortens the driving time needed to find parking and even offers navigation to available parking spaces, lowering the amount of greenhouse gas emissions by the employees of the company when they’re accessing company parking. Learn more about NPE here. 

Klaudia Żychowska

Klaudia Żychowska is a Polish native who grew up in Chicago. After completing a Bachelor’s Degree in English with a double concentration in Creative Writing and Professional Writing at the University of Illinois at Chicago, she decided to move back to Poland to reconnect with her roots. She is fascinated by smart cities and innovative technologies and is responsible for content strategy at NaviParking.

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