Corporate Responsibility (CR) aka Corporate Social Responsibility (CSR) aka environmental, social and corporate governance (ESG) is essentially the concept that a business should both self-regulate itself (PROVE that you are reputable and worthy of investment) and benefit its community (GIVE back or JUST GIVE to the local/global community). CR is a BIG deal. Don’t believe me? Just check out the website of the major players in any industry and you’ll find a whole glossy section dedicated to that company’s CR policy. It seems that it is NO LONGER enough to sell a good product or provide a good service. Clients, investors and employees EXPECT to see your business’s CONSCIENCE.
So how did CR come about?
CR was arguably cultivated in response to scandalous corporate practices and errors such as environmental accidents (BP oil spill), corruption (Enron – fraud, Lance Armstrong and the Livestrong Foundation – doping) or accusations of child labour in supply chains (H&M, Nike and Walmart). It appears more and more now that a company’s long-term financial SUCCESS goes hand in hand with its RECORD on social responsibility, environmental stewardship and corporate ethics. The Companies Act 2006 added to those pressures by requiring directors of UK companies to have regard to community and environmental issues when considering their duty to promote the success of their company. CR doesn’t stop at companies either, last year the UK government issued a consultation paper inviting the public to help it improve its CR policy!
What does CR involve?
Well this is highly dependent on the nature of your business. The important thing about CR is that it should be sustainable and therefore it should emanate naturally from the industry within which your business operates. For example:
- if you are in the food industry you can demonstrate CR by sourcing your ingredients from fair trade farms, cooking meals for local hostels and going GREEN (reducing waste and recycling);
- If you are in the fashion industry you can make a point of using ethically sourced materials and er… no child labour or labourers that are paid a fair wage;
- If you are in the tech industry (gaming, social media etc.) you can hook up with local schools and teach kids how to code (coding is the future) or team up with a charity that aims to get computers in schools; and
- If you are in the life coaching industry you can set up a mentoring programme for young professionals or ex-convicts.
There is so much that you can do! There isn’t a limit and there isn’t a checklist. Your business can decide.
What are the benefits of CR?
Well truth be told, it’s publicity, GOOD publicity for your business. It encourages trust from future clients/customers and also investors. However it also makes YOU and YOUR business a lot happier mentally and even financially.
Let’s look at a real example from a heavy weight. Google Green is a corporate effort to use resources efficiently and support renewable power. However recycling and turning off the lights does more for Google than lower costs. Google has seen an overall drop in power requirements for their data centres by an average of 50 percent resulting in savings that can then be redirected to other areas of the business or to investors.
Here’s another example from a familiar business. SurveyMonkey is best known for its easy-to-use survey creation software, but the company’s nationwide survey service, Audience, was created as a way to give back to deserving causes across the country. Instead of offering cash and prizes to survey takers, SurveyMonkey donates 50 cents per survey completion to the taker’s charity of choice. In 2013, the company donated more than $1 million to organisations such as the Humane Society, Boys & Girls Club of America, and Teach for America.
To summarise, maintaining a comprehensive CR policy for your business, however small, can encourage the following:
- Win new business;
- Increase customer retention;
- Develop and enhance relationships with customers, suppliers and networks;
- Attract, retain and maintain a happy workforce making you an Employer of Choice;
- Save money on energy and operating costs;
- Manage risk;
- Differentiate yourself from your competitors;
- Generate innovation and enhance your influence;
- Improve your business reputation;
- Provide access to investment and funding opportunities; and
- Generate positive publicity and media opportunities due to media interest in ethical business activities.
So there you have it, CR. Go and get started and remember that CHARITY BEGINS AT HOME – start from your employees – are you training them? Are they empowered? Then expand to your local community in which your business operates – do you have a presence? Are you helping?
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2 thoughts on “Let’s talk about Corporate Responsibility…”
Agreed it is publicity but very good publicity especially if a potential client sees that you are supporting a charity for example thats close to their heart too. Very good examples in this article!
Yes it goes towards reputation building. CR says “we’re trust worthy”. Thanks for your comment!