Corporate social responsibility (CSR) is defined as a self-regulating business model that helps a company be socially accountable—to itself, its stakeholders and the public. By practicing corporate social responsibility, also called corporate citizenship, companies can be conscious of the kind of impact they’re having on all aspects of society, from economic and social to environmental and more.
In the years to come, IMARK members and their contractor customers will no doubt engage with a growing number of companies (suppliers and customers) that strive to be better “corporate citizens.”
Following, experts from Legrand and Siemens discuss their dedication to and unique demonstrations of corporate social responsibility as well as their expectations of suppliers—all critical insights for distributors who want to better understand and align with these and other socially-conscious manufacturers.
Legrand: An Agent of Positive Change
“Legrand’s current ‘Corporate Social Responsibility Roadmap’ has three focal areas—People, Business Ecosystem and the Environment,” shared Susan Rochford, West Hartford, Connecticut-based vice president of energy efficiency, sustainability and public policy at Legrand North America and Central America.
“Encompassed within the People focal area are priorities pertaining to human rights, community engagement, health, safety and wellbeing, development of employees’ skills, equal opportunity and diversity, while the Business Ecosystem focal area addresses supplier sustainability, ethics and compliance, business partnerships promoting innovation and assurance of product safety,” she said. “The Environment focal area addresses Legrand’s commitment to reducing greenhouse gases (both in its own operational footprint as well as through the provision of products and systems that help to mitigate carbon emissions in buildings), diversion of waste from landfills, and pollution prevention.”
Among the ambitious social goals Legrand hopes to achieve by 2030, “80% of the company’s revenue will be derived from the sale of eco-designed solutions, we’ll achieve male to female parity and one-third of top management positions will be held by women, and we’ll reduce our greenhouse gas emissions by 30%,” Rochford said.
A number of factors influenced Legrand’s decision to begin embracing these corporate social responsibility (CSR) goals more than a decade ago. Specifically, “there’s a strong and growing desire among employees, customers, governments and shareholders for companies to operate in a socially and environmentally responsible manner,” Rochford said. “There’s also ample evidence that employees prefer to work for, consumers prefer to buy from, and shareholders view as more attractive those companies that demonstrate a strong CSR commitment. Today, CSR is integral to our business strategy and company purpose of improving lives.”
Legrand’s commitment to social responsibility has been manifested in many ways. Among them, “we’ve donated more than $600,000 to building-related charitable organizations, disaster relief organizations and local schools and have also logged thousands of volunteer hours improving homes for those in need and developing sustainability-related partnerships and projects for local schools,” Rochford said. “We’ve also driven innovation across our business and have worked with suppliers to drive improvements in their own sustainability performance. On the Environment front, our eco-designed products feature reduced carbon emissions and removal of chemicals of concern, and we’ve also reduced our own energy consumption, diverted more than 90% of our waste from reaching landfills and achieved LEED certification for our century-old manufacturing facility and corporate headquarters in West Hartford, Connecticut.”
For companies interested in the benefits that accrue from a dedication to corporate social responsibility, “research reveals that companies committed to CSR enjoy a positive reputation and the ability to attract talent, earn and retain customer loyalty, enhance their productivity, and better manage operational risks,” Rochford said. “A company’s brand can also be enhanced when it earns recognition from leading institutions. For example, Legrand has been recognized multiple times by the U.S. Department of Energy for our achievements in reducing energy consumption and, globally, we’ve earned status on the FTSE4Good London Stock Exchange.”
At the same time, she said, challenges that may confront companies that go down this path involve the time it takes to educate colleagues on the merits of CSR initiatives and build greater awareness/understanding. “The commitments themselves are also challenging,” she said. “Integrating the principles of sustainability into how we do business—from sourcing, designing and manufacturing to recruiting, providing for a safe and healthy workplace, investing in our communities and more—takes perseverance, but we know it’s worth it.”
Among other positives, she said, “we find that more customers are aware of and interested in Legrand’s CSR/Sustainability commitment all the time, especially those who have made their own sustainability performance commitments.” She noted that customers request sustainability-related data on manufacturers like Legrand through the “Architecture & Design Materials Pledge,” which involves more than 115 signatories and shares transparency-inspired performance data on manufacturers committed to designing products for high-performance buildings.
According to Rochford, suppliers play a central role in Legrand’s ability to achieve its sustainability targets. “Two key sustainability-related areas where we work with our suppliers are those of transparency and carbon,” she said. “With respect to transparency, we rely on our suppliers to disclose information on the substances that make up the materials and components we purchase—not only so that we can stay ahead of ever-evolving environmental product regulations, but also so that we can publish transparency documentation such as Health Product Declarations (HPDs) and Declare Labels.” With respect to carbon, “we’ll need strong efforts from our suppliers to drive down their own carbon emissions and identify lower carbon materials (such as those with high percentages of post-consumer recycled content) so that we can hit our ambitious 2030 goals,” Rochford said. She noted that this will additionally help Legrand positively contribute to a desirable “circular economy” where waste and chemicals of concern are designed out, products/materials are kept in use for as long as possible and natural systems are regenerated.
Ultimately, “our industry serves the built environment and there’s much potential to bring forward innovative solutions that not only reduce the environmental footprint of buildings but also greatly improve the experience of the occupant,” Rochford concluded. “Legrand’s hope and expectation is to be an agent of positive change.”
Siemens: Sustainable by Design
Over 170 years ago, Siemens AG Founder Werner von Siemens pledged that “I will not sell the future for instant profit!” His words are still a key pillar of the renowned company’s mission.
“In light of the greatest challenges facing the world today—globalization, urbanization, demographic change, climate change and digital transformation—sustainability is an integral part of our mission at Siemens and an essential aspect of successfully implementing our ‘Vision 2020+’ strategy,” shared Valentin Dinkelbach, corporate account manager, IMELCO at Siemens AG in Nuremberg, Germany. “We define sustainable development as the means to achieve profitable and long-term growth and are committed to thinking and acting in the interests of future generations by striking a balance between people, planet and profit.”
A number of goals are currently part of Siemens’ mission to help solve the world’s biggest challenges, improve the lives of people globally and leave the planet stronger than they found it. Among them, “we’re proud to have been the first global industrial company to commit to 100% carbon neutrality by 2030 and have already reduced our carbon footprint by 54% as of 2020,” Dinkelbach said. “In addition, we strive to uphold the highest ethical standards in our conduct and ensure transparency in our partnerships and supply chain.” Operating in 200 countries and territories, Siemens also prizes a diverse supply chain, spending nearly $1 billion annually with businesses owned by women, people of color, veterans and other diversely-owned suppliers to help level the playing field, tap into the needs of different populations and open up to new innovations and perspectives.
“Another of our corporate social responsibility goals involves resource efficiency,” he said. “From decentralized power generation, deep electrification and the creation of resilient microgrids to making buildings and owners/managers smarter about long-term operating costs, we’re committed to doing our part to lead and advocate for sustainable and equitable policies that drive innovation while also combating climate change.”
In terms of Siemens’ workforce, “we strive for inclusive and equitable policies, practices, attitudes and cultural messages that foster equity and reinforce the importance of diversity,” Dinkelbach said. “In addition to earning a 100% rating on both the 2020 and 2021 Corporate Equality Index, The Siemens Foundation has invested nearly $130 million to advance equitable workforce programs and STEM education and we’re also working to ensure that 30% of our top-level managers are women by 2025 and to expand access to employee share plans.” The company has further invested more than $37 million annually in workforce training for U.S. employees to ensure that they have the skills needed to succeed in the advanced and increasingly digital manufacturing arena that will define industry and infrastructure for decades to come.
Tom Gilbert, Siemens’ Alpharetta, Georgia-based national account manager, said that the company’s corporate social responsibility commitment is driven by close ties to its markets and customers. “We engage in critical dialogue with our customers as well as our global network of consultants, distributors, integrators, technical procurement experts, construction companies and machine builders so that we can better understand all of our stakeholders’ expectations and take appropriate measures to strengthen these partnerships while maintaining and enhancing trust,” Gilbert said.
According to Gilbert, some 65,000 suppliers have already committed to the Siemens Group Code of Conduct for Suppliers and Third-Party Intermediaries. “In 2020, we performed 269 external sustainability audits to ensure the high standards we expect from our supply chains,” he said. “We’ve set ambitious targets to reduce our supply chain emissions by 20% by 2030 and we aim to achieve an emission-free supply chain by 2050. As a first step in this journey, we’re initiating a dialogue with our direct suppliers through our ‘Carbon Reduction @ Suppliers’ program, which is designed to support our suppliers in their target-setting and action plans for reducing their carbon footprints.” He noted that Siemens has also instituted a number of key performance indicators tied to their drive for a circular economy and its underlying principles of ‘Reduce, Reuse, Recycle and Recover.’ Another way Siemens ensures that it takes potential environmental and social risks into account earlier and more comprehensively is through the company’s unique ‘ESG Due Diligence Tool,’ which is used internally to review environmental, social and corporate governance (ESG) criteria for projects and help identify, assess, mitigate and monitor environmental and social risks.
Overall, Dinkelbach and Gilbert said that sustainable business growth goes hand-in-hand with the value Siemens creates for people and the planet. “We’ll continue to raise the bar to create more value for all of our stakeholders,” concluded Dinkelbach, who confirmed that at Siemens, sustainability isn’t an option, but a business imperative and a long-standing part of the company’s DNA.