Being a socially responsible business is not just about doing the right thing, it can be very good for your profits. Here’s how to make it work.
Corporate social responsibility is nothing new. It’s been with us for decades. Only now, though, does it seem to be taking its rightful place at the centre of corporate strategy. What’s more, what was once thought to be the domain of the big corporations is rapidly gaining ground with small and medium sized businesses.
Its resurgence is down to a number of factors. Climate change has gone from some far off, hypothetical threat for the future to something which is happening right in front of our eyes. Be it wildfires in California, droughts in Australia or floods in the UK, we’re seeing it play out every week on the news.
Meanwhile, ethical consumerism has gone from a niche concept to a multi-billion dollar industry. Most people say they now take social impact into account when making buying decisions. The trend is even moving into finance with ethical pensions and investment products becoming increasingly sought-after. When the big banks in Australia launched the country’s first ethical investment funds, they were very quickly over-subscribed.
Last but by no means least, the financial crisis demonstrated the dangers of poor corporate behaviour. Bad behaviour has gone from being an ethical concern to something which can affect bottom line performance. Companies are coming under pressure to upgrade their CSR approaches not just from campaigners or politicians, but from their own customers and shareholders. Meanwhile, research suggests that employees who take part in their company’s CSR activities such as volunteer days, tend to feel a greater sense of loyalty to their employers. People like to think they are part of an organisation which is having a positive impact on the world around it.
CSR, therefore, is not something which you should leave to the big boys. It’s something which can have a transformative impact no matter what your size. True, a small business might not be able to change the world, but it can have an impact on its local community.
So, if you are thinking of embracing the concept of CSR, here are a few tips.
- Be authentic
Whenever you mention CSR, there will be plenty of cynics who automatically role their eyes, and with good reason. History is littered with companies which talked the talk on CSR, but didn’t necessarily walk the walk. BP for example, historically made massive efforts to promote its efforts to become a more environmentally friendly business. It became a regular part of ethical investment portfolios and was even named sustainability partner for London 2012.
All that good work, though, was undone when a fire at its Deep Water Horizon rig caused billions of tonnes of oil to pump surge into the Gulf of Mexico. Wildlife and coastlines were devastated as the company struggled for weeks to clean up its mess. Investigations showed that BP had cut corners on safety and shown a disregard for environmental concerns – the very opposite from the values they claimed to hold dear.
The lesson from this episode is simple. CSR needs to be much more than good intentions. If you don’t follow up your words with actions, there’s a good chance you’ll be shown up in a very public way. Customers tend to react badly to companies which are the subject of a scandal at the best of times – even more so when it has made a big deal out of its commitment to social responsibility. CSR, then, needs to be about much more then words in a mission statement, it has to be baked into everything you do.
- Pick your impact
CSR can take many forms. It could be as simple as making a commitment to run day to day operations in the most sustainable way – such as using environmentally friendly packaging or adopting carbon offsetting initiatives. Many companies have pledged to mirror the world’s drive towards net zero with their own initiatives.
Others will choose to support local charities and community groups. This might take the form of regular donations, such as in the case of Innocent Drinks which made a commitment from its earliest days to donate a proportion of its profits to charity, or holding fund raising events. These can be a great way to raise awareness and funds for a cause, and they also serve to promote your business. Anything which shows your business in a positive light, will also help to drive sales, boost your profile and, hopefully, grow your profits.
You can also arrange volunteer days. For example, companies might include a number of volunteer days as part of each employees’ contract. This might be days set aside for community activities alongside their existing sick days and holiday allowance.
They could use this to engage in all sorts of activities be it conservation days with the local wildlife trusts or helping out at a community centre or food banks. Days such this can also double as team building events. Working together on worthwhile activities can build bonds which may shine through in their work when they get back to the office.
- Engage your employees
One area in which small businesses have an advantage over large corporations is that they can engage employees more closely in CSR decisions. They could have a say in which charities you support, or suggest other activities which they think might be worthwhile.
One good idea could be to think about how social activities can link to what you do as a company. Whatever your business is, you will have certain skills and areas of expertise which could be put to use for socially worthwhile projects. For example if you make shoes or clothing, you could donate product to the local homeless shelters. If you are a tech company you could perhaps run workshops teaching people IT skills such as coding.
- Be a CSR employer
The final point is possibly the most important but is often overlooked. CSR should shine through in everything you do, including how you work with your employees. At a time when wages are stagnating while the cost of living is going through the roof, companies which put thought into their employees’ wellbeing will be at a premium.
By offering help with mental health, ensuring a good living wage for everyone and going above and beyond in terms of the perks you offer, you be rewarded with a more loyal and productive workforce. Studies show that happier employees can be up to 13% more productive than those which are unhappy. Charles Dickens’ Scrooge wasn’t just being a bad employer, he was being a bad businessman shooting himself in the pocket by treating his workers badly.
