Good CSR becoming increasingly good for businessNovember 2014
Sustainability is undoubtedly a buzzword at the moment, writes Paul Raleigh. Whether business leader or consumer, we cannot escape from being told to consider the long-term implications of our actions or spending decisions. When they are rational and focused, I welcome these arguments. Evidence shows that exhausting scarce resources now will reduce the opportunities available for future generations.
But what of the role of businesses – often unfairly typecast as faceless, profit-grabbing corporations who would do anything to sell more stuff today, with no concern for the consequences tomorrow? As Barack Obama recently said: “The business community (has) broader responsibilities to the system as a whole… (although) the general view today is that the only responsibility that a corporate CEO has is to his shareholders.”
In reality, businesses across the world are engaged in a whole host of environmentally and socially responsible activities. We know this through our work with our clients but it also shines through in Corporate Social Responsibility: Beyond Financials, the latest publication from our International Business Report. More than two-thirds of the 2,500 mid-sized businesses we interviewed told us they gave either time or money to a local cause over the last 12 months. Two in three said they improved waste management or energy efficiency. More than half gave away products or services to charity, while the overwhelming majority said they are involved in CSR activity of one type or another.
That said, businesses do of course have a responsibility to investors, shareholders and also indirectly to the people they employ to turn a profit. Strong social and environmental credentials can also create customer loyalty and enhance reputations, something which has become increasingly important with the rise of social media. But increasingly business leaders are realising that commercial drivers and CSR drivers are becoming ever more aligned. Two thirds of those we surveyed cite cost management as a key driver in implementing socially and ethically responsible measures, up from just over half when we last surveyed this topic in 2011.
Improving energy efficiency is a great example of a cost-saving action with wider environmental and potentially social benefits. Take Ben and Jerry’s. The ice-cream giants recently converted one of their European factories so that the electricity it uses is generated by the by-products of the ice-cream making process. Not only will it cut down on their energy bills, it’s a great story through which they can demonstrate their green credentials. It’s compelling evidence that businesses now understand the commercial benefits of being sustainable.
At the same time, however, nearly two in three businesses also said they are operating more sustainably because it’s the ‘right thing to do’. This may seem a fairly nebulous concept in the world of business, but it highlights what is at the heart of any corporation: people. At Grant Thornton, our own CSR programme focuses on how we can get the skills of our people out into local communities, both for their own development and for the wider positive impact.
As with many ubiquitous phrases, Corporate Social Responsibility invariably means different things to different people. But for me as a business leader, good CSR is so much more than simply writing a cheque. In an ever more crowded and competitive marketplace, it means differentiating yourself to unlock the potential for growth in your people and in your communities. It means developing and evolving, but not at the expense of the natural environment or society. It means growth that considers longer-term implications. It means acting as responsible global citizens.
The good news coming out of our research is that the vast majority of mid-sized businesses feel exactly the same.
Paul Raleigh is global leader – strategic development and growth at Grant Thornton
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