The concept of CSR (Corporate Social Responsibility) appeared in the 1960s in the United States in a book by Howard R. Bowen: Social Responsibilities of the Businessman. This concept aims to evaluate the contribution of a company to sustainable development issues.
The European Commission then defined it as “the voluntary integration by companies of social and environmental concerns into their business activities and their relations with their stakeholders”.
What motivates companies to implement a CSR strategy?
According to the European Commission’s definition, the implementation of CSR initiatives is “voluntary”. So what has been driving companies to take these initiatives for the past thirty years?
We can distinguish two main axes:
- Consumer demand is evolving: consumption is nowadays ethical and responsible. The circular economy and the desire to consume locally and organically are good examples of this new era of consumption. The involvement of the company in a CSR approach becomes strategic and even constitutes a communication axis for the brand
- Since the 1990s, regulations have required companies to publish financial and extra-financial data (NRE laws) or an action framework to reduce greenhouse gas emissions (Grenelle laws). The latest law, the Pact law, reinforces the obligations of companies on the social aspect this time with, among other things, a better sharing of the value created with the employees.
Companies with more than 500 employees and more than 40 million in sales (listed companies) or 100 million (unlisted companies) are, moreover, subject to an obligation to publish a CSR report including the 3 environmental, social and governance criteria (ESG criteria) since Grenelle II in 2010.
- The environmental criteria measure the direct or indirect impact of the company on the environment. To do this, the company must study all of its production and distribution processes in order to rethink them in the direction of sustainable development.
- Social criteria measure the social impact of the company and its various partners (customers, suppliers, etc.). For example, the company must ensure that its external partners (suppliers and subcontractors) have good social working conditions.
- Governance criteria measure the way in which the company is managed, administered and controlled. This can range from the role of shareholders, feminization to the transparency of remuneration.
How does Process Mining fit into the CSR approach?
Process mining is a technology that allows, thanks to information logs, to collect data from different sources and to centralize it in order to render it in real time. This allows to visualize precisely the bottlenecks, the rework and the non-conformities of a process.
It allows a total transparency on the whole value chain: from the R&D of a company to the consumption through production, purchasing and distribution.
In this value chain, essential elements regarding ESG criteria can be measured and optimized to improve the environmental and social impacts of the company. Here are a few examples among many others:
Process mining allows for better inventory management. Indeed, by visualizing the history of flows and, thanks to AI and Machine Learning, by predicting the company’s future flows, this technology allows for the best possible adjustment of raw material purchases necessary for manufacturing, thus avoiding surpluses and possible losses of raw materials.
Process mining also allows for a better visualization of the products’ routes during distribution: to evaluate the routing times according to geography, product typology and suppliers, among other things, to optimize them. This optimization leads to a reduction of greenhouse effects through a more responsible management of the supply chain.
It also allows to better visualize the tasks that can be repetitive and without added value done by the production teams and to automate them. This provides more comfort and quality of life at work, which is also essential in a CSR approach.
The ESG reports of companies constitute a set of data related to the entire value chain. Process mining, by capturing and centralizing all of this data, is in itself a good way to produce these reports and to forecast their evolution.
In short, process mining is a tool that helps to audit the reality of a company and to reconstruct what is actually happening on the ground in a macro and micro way. Thanks to this hypervision, the company is able to launch optimization projects and gain in performance. These gains will be visible in many aspects of the company’s value chain, in an ethical and responsible manner.
It is certainly for this reason that France Strategie has observed an overall improvement in performance of around 13% in companies that have carried out CSR projects.