NiSource: Addressing Social Issues

NiSource is one of few corporations that publish sustainability reports. The company’s 2012 sustainability report details the current year’s sustainability success highlights, environmental stewardship, shareholder value, etc. The list of NiSource’s 2012 Sustainability Success Highlights can be viewed to the right. This list allows several things to be concluded about NiSource:

It promotes sustainability;

It attempts to fulfill moral obligation;

It has the license to operate;It has a good reputation.

NiSource’s actions clearly display a prioritization of social issues as well as setting the company’s objectives with social expectations.

Generic Social Issues

Like most corporations, NiSource contributes to its communities through philanthropy and donations. Some of the issues they address do not necessarily pertain to their line of work and are not significantly affected by the company’s operations. Some of their 2012 activities geared toward supporting strong, growing communities included:

$25,000 Donated to Ohio Department of Natural Resources to support state forest conservation and education programs;
$50,000 allocated to “friends” of the park to extend the Little Beaver Creek Greenway Project
Donated nearly $7 million to non-profit organizations
Over $1,000,000 and volunteer hours donated to the Boys and Girls Clubs of NWI to promote a positive environment for children’s learning and development from fundraising
Held a toy drive for Toys for TotsDonated more than $690,000 and volunteer hours for United Way
Donated $320,000 and volunteer hours to organizations that provide basic human needs, educate children, emergency responders (police, fire, etc.), and celebrate diversity in communities.
Cleaned a Michigan City beach with a total trash collections of 3500 pounds of debris

These are all to support social issues that are important to society but aren’t affected by NiSource’s general operations. The concerns are not related to NiSource’s value chain activities and strategies. Also, these do not influence the corporation’s long-term competitiveness. Other industries’ operations impact these social concerns that NiSource is in-part taking responsibility for, such as paper manufacturers. This is why these actions are considered CSR; however, they are not strategic CSR sine they do not coincide with the direct operations of the company. These good-intended actions were a response to miscellaneous social issues within the community that NiSource operated, but they have the least long-term effect of the three levels of social issues.

Value Chain Social Impacts & Inside-Out Linkages

NiSource’s operations have many effects on the environment. Fortunately, they have continuously monitored and predicted environmental hazards in which they could react sooner than later. This has resulted in a strategy that creates shared value for the company and society, which further yields that NiSource has actively participated in CSR. A “sustainability strategy” was developed that focuses on five aspects:

Environmental stewardship to further reduce emissions,
Strong, growing communities to create jobs while focusing on modernization, reliability, and safety,
Customer-focused energy solutions that ensure affordability and access while introducing modern efficiency programs,
Safe, skilled, and engaged teams that further embed inclusion and diversity into the NiSource culture,
Shareholder value through earnings and ethical practices.

see the strategy through, NiSource established actions that could be taken and measured. Some of their actions that fulfill the strategy include:

Investing more than $850 million in their facilities to reduce emissions
Implemented a Climate Change Policy in 2009 that reduced carbon intensity by 7% within 2 years for greenhouse gas reduction
Currently has a comprehensive mercury pollution prevention and minimization plan that has reduced mercury discharges in water at its coal-fired generating stations and is building a $25 million wastewater treatment plan with advanced mercury controls
Implemented programs that helped over 3.8 million customers save over $4.2 million collectively (gas only) through energy use managementCreated a paperless billing option that has over 390,000 customers enrolled
Promoting employee safety by creating a safety rewards program, safety sites on the NiSource intranet, and contractor safety team
Increased shareholder value through initiatives designed to strengthen their energy infrastructure, improve customer service, and enhance environmental sustainability as well as investing in more than $1.6 billion in infrastructure modernization while remaining on of the World’s most ethical companies

Society is significantly affected by these activities in many different ways. The primary focus may be sustainability, but NiSource does not limit its contributions to just sustainability. By transitioning normal operations to produce such social benefits, NiSource is participating in strategic CSR.

Impact of Efforts

NiSource’s participation in CSR has gone farther than merely Responsive CSR; it has managed to indulge in the creation of strategic CSR. It has established a shared value strategy for operations that simultaneously promotes a better business and society in the long-run.

It has contributed to things such as improving air quality, increasing employment, preparing the future workforce, etc. There are many stakeholders that are affected by NiSource’s decisions to improve society and the corporation, including (but not limited to) employees, customers, local residents, perspective employees, and shareholders. Each decision affects each group in a different way and to a different extent, but NiSource tries to ensure the quality of its decisions so that they provide the biggest benefits to both the corporation and society. Their sustainability driven decisions promote longer living for those in its current and future communities while enhancing the quality of the corporation’s reputation and revenues, which results in pleased shareholders.

2010 - present

Social Dimensions of Competitive Context & Outside-In Linkages

There are many different factors in the external environment that affect the drivers of competitiveness in the areas that NiSource operates. These particular factors serve as motivation for NiSource to act; their responses to the environment include things such as:

More than 1900 people participated in NiSource’s Leadership Development programsPartnered with Ivy Tech Community College in Indiana to provide students with the skills and knowledge they need to obtain long-term employment in the industry through the curriculum
NiSource conducted a third-party assessment of their Code of Business Conduct that revealed them to have the best practices (ranking in the top 9% of 3300 codes), and they will revise their code based on feedback from the review
NiSource focuses on inclusion and diversity (I&D) to promote a stronger company that respects and values everyone’s contributions through employees participating in I&D education, training, diversity councils, employee affinity groups, mentoring programs, and community events

Things such as strengthening the future and current workforce as well as stakeholders’ demand for businesses to go beyond complying with regulatory requirements are external factors that motivate NiSource to do things such as previously listed. These things are considered CSR because they create a shared value between society and the corporation. It is evident that NiSource seeks to better the external factors that affect drivers of the quantity and quality of available business inputs, regulatory policies and incentives, and local availability of supporting industries in their operation location.

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Strategic CSR & Social Accounting