We must make the business case – even if it’s a messy, tiresome taskApril 2010
John Elkington has been working with distinction in the corporate responsibility field for so long that he’s perhaps entitled to feel a little jaded with the continuing debate about how to assemble the business case for CSR.
Like most perceptive business people these days, Elkington is convinced that companies benefit from being socially responsible in all their operations. He would like us simply to take this as given and move on (see page five). But, in the real world, the business case for CSR will always have to be made – certainly as long as there is capitalism and probably beyond.
Business involves achieving ends by scarce means that have alternative uses, and that forbids making decisions on a whim. Its activities must be justified economically and financially; otherwise there is chaos. In product research and development or in striking out in new directions, companies might occasionally explore an idea just to see where it goes. But even then there has to be a business reason for it – potentially improving the bottom line, maintaining market share, reducing risk, enhancing sustainability.
Of course, the business case is more easily made in some areas than in others. It is relatively simple to show the benefit of cutting energy, water or paper consumption. It is less straightforward to demonstrate the tangible good coming from, say, an employee volunteering programme. But it can be done.
Worker morale, team spirit, pride in and loyalty to the firm, absenteeism, a company’s reputation among its customers and in the community – all this is open to being quantified, or at least estimated, and correlated in some way.
As Elkington says, goalposts do change, and we have to be careful about the assumptions that lie behind a business case. Upon further investigation, what looks beneficial today may turn out to have unintended negative consequences. Advances in the sciences are likely to bring new insights into all sorts of things. But we must proceed from the present state of the art and do our calculations based on what we know now. Having a bit of the Wright Brothers spirit, as Elkington urges, is one thing; pushing ahead with programmes lacking any numbers to support them is quite another.
A world where businesses just ‘do the right thing’ and get on with it may seem more attractive. But among the stakeholders in a company are also its shareholders – or the tax-payers, as the state of some of our banks reminds us. Projects without proper financial underpinning risk ultimately doing a disservice to the notion of CSR. Acting responsibly also means being prepared to put the necessary work into the business case – so that it becomes ever more robust.
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