No longer is the term 'Corporate Social Responsibility' a novel idea amongst businesses.
A 2011 sustainability study by MIT showed that sustainability, in the US at least, now plays a permanent part in 70% of corporate agendas. Organisations such as Unilever haven't simply been championing sustainable business as a form of corporate philanthropy. Since implementing their Sustainable Living Plan, they have increased growth and profits. Quite simply, doing good is good for business. How have Unilever achieved this growth? By being a responsible, sustainable business, they have saved money (energy, packaging etc.), won over consumers, fostered innovation and have managed to inspire and engage their people.
Benefits of corporate social responsibility
The Unilever success story is well publicised, but it can be hard to identify with a business of such size. However, the great news is that even the smallest of organisations benefit when putting Corporate Social Responsibility (CSR) at the heart of their business. Whilst profit may be the end goal for any business, responsible businesses have managed to attract more investors, reduced their risks and addressed stakeholder concerns. With there barely being a day in the news where a business hasn't made an embarrassing error of judgement, more interest is being show in business demonstrating Corporate Social Responsibility (CSR). The benefits from adopting CSR can be less obvious than say, helping the environment. For example, a survey from Net Impact found that 53% of workers said that "a job where I can make an impact" was important to their happiness. Interestingly, 35% would take a pay cut to work for a company committed to CSR.
Examples of corporate social responsibility
CSR isn't about giving money to charity, or just asking people not to print emails for the sake of Mother Earth! First and foremost, businesses exist to make profit, and this isn't meant to change as a goal. The reality is that no organisation operates in isolation; there is interaction with employees, customers, suppliers and stakeholders. CSR is about managing these relationships to produce an overall positive impact on society, whilst making money. So how do you put CSR into action? Below are a few examples of what businesses around the World are doing.
Making 'green' fashionable: The Body Shop
The Body Shop forged a reputation as a responsible business long before it became fashionable. They were one of the first companies to publish a full report on their CSR initiatives thanks to founder Anita Roddick's passionate beliefs of environmental protection, animal rights, community trade and human rights. The company has gone so far as to start The Body Shop Foundation, which supports fellow pioneers who would normally struggle to get funding. Over 20 years ago the company set up a fair trade programme, well before the term 'Fair Trade' started to become popular on supermarket shelves. Of course, The Body Shop is famous for its anti-animal testing stance. Whilst this makes testing their products more difficult, especially in markets such as the USA and Japan, their position has created a loyal customer base. The results? From opening her first store in 1976, 30 years later Annit Roddick's empire was taken over by L'Oreal for £652m, where it has continued to make annual profits of over £40m.
Putting the fun into CSR: Walt Disney
Moving beyond making cartoons, today the Walt Disney Company additionally owns the ESPN and ABC networks, holiday resorts and publishing businesses to name a few. The result is a lot of social and environmental impact, as well as the ability to influence a huge amount of people. Importantly, Disney recognised that you can't entertain a family on the one hand and then disregard the world and circumstances in which they live. Acting responsibly gives the company credibility and authenticity. Accordingly, they have set themselves strict environmental targets and disclose their figures in the Global Reporting Initiative which provides a comprehensive set of indicators covering the economic, environmental and ethical impacts of a company's performance
Setting ambitious financial targets together with environmental performance targets may sound like an oxymoron, but Disney has managed to do this with initiatives such as running Disneyland trains on biodiesel made with cooking oil from the resort's hotels. They also created the 'Green standard' to engage and motivate employees in reducing their environmental impact when working, having meetings, travelling and eating lunch. With more than 60,000 staff, the results are enormous when everyone is pulling in the same direction. A clear example of financially benefiting from reducing environmental impact is made with this simply statistic: a 10% reduction in the corporation's electricity use is enough to power the annual consumption of 3 of their theme parks. Whilst their CSR efforts may have taken a great deal of organisation, dedication and investment, 2012 was a record year for Disney's profits.
Haagen-Dazs and honeybees
This might sound odd at first, but honeybees are an important part of the global food chain as they pollinate one-third of all the food we eat! With numbers lower than ever, this is bad news for companies such as Haagen-Dazs and their all-natural ice creams. To raise awareness, they created a website, started a social media campaign and donated a portion of proceedings to research. As you can see, a campaign like works fantastically from a number of different angles. Not only is it helping society as a whole, in keeping with the company's CSR goals, it helps to show a human side to consumers, which can't hurt sales. In fact, research shows consumers are more likely to pay a premium for a product linked to a charity donation.
How can CSR translate to a smaller business? The issues are the same, just on a smaller scale. The key is to start by conducting a review of what impacts your business has. This could be from environmental issues (energy use, waste etc.), to how your employees are treated, your supply chain and the local community. Below is a look at some examples a small business would recognise, and could act on.
Even the smallest of office-based businesses can make big changes when it comes to the environment. When you consider an average office worker can use up to 11 sheets of paper a day, are you really reusing and recycling as much as you could? A common lapse is forgetting to turn off your PC's monitor come home time. Left on overnight, that is the equivalent of printing 800 A4 pages! Multiply that by the varying IT equipment in your office and you're looking at a lot of unnecessary energy use.
The above examples ideally illustrate how thinking sustainability isn't just good for the environment; it saves overheads and helps the bottom-line too.
For a smaller business, extravagances can be hard to justify. However, happier staff doesn't simply mean bonuses and pay rises. What employees value is participation: do they get a fair say? Keeping staff updated on the business and inviting opinions keeps them motivated and loyal. Investing in them with internal and external training helps them do a better job and helps in retraining them, too. Would you rather invest less and have a poor performing, unmotivated team with a high attrition rate instead?
You can incorporate your staff welfare plans with your aims to boost community relationships too. If you'd like to support a local charity, why not let your staff vote for their favourite? It's now common for businesses to allocate charity days where staff get hands-on with their chosen charity, the effects going far further than monetary donation. In uncertain financial times, employment rates are always an issue. Could your business offer part-time work or training to those in long-term employment, or students looking for their first work experience? Finally, there's the supply chain. Do you have a policy to purchase locally? With the internet opening up the world, it's surprising how far away some suppliers are. Not only could sourcing locally boost the local economy, you're helping the environment by avoiding unnecessary travel and consequent emissions.
It's surprising when you break down your organisation's activities to see how many people are affected by it. It's also clear that CSR isn't a cynical marketing ploy for big businesses; there are tangible benefits to be had by all. The key is not to treat CSR as an 'initiative', but to simply view it as the way you do business. Applying CSR is just redefining aspects of what you're already doing; it needn't be exotic or costly. Instead, start small and gain momentum.
Rob Fenn works at the British Assessment Bureau.
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