Business Talk: Making corporate responsibility work for SMEs

8th June 2018
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How do you turn good intentions into corporate responsibility (CR)? For small businesses with a host of daily pressures to contend with, such an endeavour can be daunting. Here, sustainable business writer Katharine Earley explores some of the simple ways in which small companies can have a big impact on the world around them.

What is corporate responsibility?

The concept began gaining momentum in the 1960s and 70s, when the world’s corporations became the focal point for a growing wave of social and environmental activism. Until then, few had really given much thought to how business was conducted. Companies’ contribution to society was thought to be implicit in the products, services and employment they provided. But their growing impact on the world’s people, oceans, forests and climate undermined this perception. High profile disasters and controversies such as the Exxon Valdez oil spill in 1989 and the Nike human rights scandal in 1992 further exposed a fundamental lack of responsibility in business.

Today, large businesses are expected to take responsibility for everyone touched by their activities and every aspect of their environmental footprint. And implicit in this idea of far-reaching responsibility is the concept of doing well by doing good. Indeed, Unilever’s Sustainable Living Brands are growing 50% faster than the company’s standard brands, for example.

So ‘corporate responsibility’ can be defined as acting in a way that’s beneficial to the environment, society and business. And this has never been more important, as the world gears up to address major challenges including climate change, resource scarcity and social inequality.

What’s more, there’s a growing pressure from consumers and investors to get this right. People want to know how their products are made, who made them, and at what cost to the environment? 73% of millennials would spend more for a sustainable product, according to a Nielsen study. Meanwhile, investors reacted quickly to the Volkswagen emissions-cheating scandal in 2015, with the disgraced carmaker’s share price plummeting by nearly 20% overnight.

So why does this matter to small businesses?

Collectively, small businesses account for 99.3% of businesses in the UK, and generate more than half of all private sector turnover. In the same way, their collective impact on the environment cannot be ignored. And it’s only a matter of time until smaller players in the supply chain start to feel the pressure to act, as big companies begin to make sustainability a condition of doing business.

There are plenty of positives to come from embracing CR, too. Having solid social and environmental credentials gives you a chance to differentiate your business in the marketplace, attract investors and engage talented employees.

What can small businesses do?

Live your values – It all starts with values. What is it that defines your company? Is it integrity, customer service, creativity etc? Integrate your values into everything you do, from dealing with suppliers to maintaining a safe work environment. Encourage every employee to live your values. You could even consider a reward scheme for employees who demonstrate values-led behaviours, as nominated by their colleagues.

As Nick Ede, founder of East of Eden, a cause-led creative agency, and Alex Holder, a creative director, discuss in our video, CR initiatives work best when they are integral to your brand and your business. If it doesn’t fit with your story, it may seem insincere.

Create a diverse workforce – Diversity and inclusion is a major business issue today. But it’s not just about ‘doing the right thing’. A balanced male/female workforce is 15% more likely to outperform its competitors, and companies with a diverse mix of ethnic backgrounds are 35% more likely, according to McKinsey & Co. Draw up simple, concise policies to determine how you’ll recruit people from every walk of life, and ensure everyone benefits from equal opportunities for learning, development, recognition and promotion. Celebrate people’s differences.

Engage your employees – Your employees are your most important asset, and happy employees are 12% more productive. So do everything you can to nurture their talents and promote their wellbeing. Respect all health and safety laws, and make sure everyone takes an active role in identifying and resolving any potential safety risks. Make a team decision on realistic initiatives you could undertake, such as providing free fresh fruit, inviting speakers to discuss healthy living topics, participating in charity sports events, or even subsidising a gym membership.

Manage your impact on the environment – This is all about efficiency and cost saving. To track and demonstrate improvements, why not calculate your carbon footprint, before and after you take action? Order a smart meter and consider what improvements stand to deliver the greatest energy savings – motion-sensor lighting, LED bulbs? If installing solar panels isn’t an option, switch your energy contracts to green providers. Or, invest in a community-owned renewable energy project. Share best practice on using less electricity and water, and printing fewer documents with your team. Where possible, source sustainable products – FSC-certified paper, for example. Keep journeys to a minimum, prioritising telephone conferences or Skype. And set up a comprehensive scheme to manage waste, including food waste and recycling. Donate unwanted, usable materials or equipment to charity.

As a paperless, digital bank with no branch network to support, Starling keeps its carbon footprint to a minimum. Additionally, by providing its business customers with tools to manage their cashflow and stay on top of their payments, it frees them up to focus on the issues that really matter.

Give back to the community – To strengthen your impact, consider how your particular industry can make a difference. For example, if you work in the food industry, could you support a community farming project or lend your expertise to a food bank or surplus food café? Could you support a bakery providing work to underprivileged people? Choose a central theme and get everyone behind you, but give people the flexibility to support the causes they care about, too. Beyond donations, show your support through employee volunteering, mentoring or sitting on the board of a social enterprise.

Starling team

What help is out there?

Rolling up your sleeves and getting started is the best way forward. Training and advice are available via sustainability consultants and specialist entities such as the Ethical Trading Initiative and the Carbon Trust (which also runs a small business network). However, there are often costs attached. You could also seek recommendations from BCorp, the global certifying organisation for socially and environmentally focused companies. If you’re feeling ambitious, why not apply for BCorp status?

Best of luck, and remember, corporate responsibility is a journey. Persevere, know you’re making a difference, and communicate your progress.

Katharine Earley is a freelance writer specialising in sustainable business and corporate responsibility.

Further reading

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