Partner Article

Corporate social responsibility is a core business issue

Here’s a selection of recent big newspaper stories: ‘zero-hours’ contracts, depressed wages, executive pay, the horse burger scandal, the Rana Plaza garment factory fire in Bangladesh, bankers’ bonuses, the tax affairs of major corporations like Starbucks and Google, the impacts of shale gas ‘fracking’, ties, the covers of ‘lads mags’, ‘pay day loans’ and the sponsorship of certain football clubs by said pay day loan companies.

What do all these have in common? First of all, they’re all corporate social responsibility (CSR) issues, secondly they all present big reputational risks to the companies concerned, and, thirdly all of them sit at the core of company’s business models – they are not peripheral, easily fixed problems. Why then is CSR still seen by so many as a fluffy like-to-have, which can be delegated to middle management and forgotten?

This disconnect is the reason why big corporations are so often caught on the hop when scandal strikes. Business operates in the real world, not some economist’s supply and demand model. In the real world, business is part of society, which in turn exists in, and is dependent upon, the natural environment.

Damage those fundamental relationships and there will be repercussions – what goes around, comes around, as the old saying has it.

Companies which treat CSR as a business priority will avoid such problems before they occur by building their values into their business models. For example, in response to the recent furore over zero-hours contracts where employees aren’t guaranteed work until the last minute, Greggs chief executive Roger Whiteside said “The idea of having zero-hours contracts doesn’t fit in with [our values] at all. I can understand why it would be attractive but it’s not something we do.”

An increasing number of business leaders are becoming evangelical about helping create the world they would like to live in. Instead of taking a narrow view of what is good for the business, they are determined to be good for society.

As Paul Polman, CEO of Unilever, put it recently “If a business wants to be around for a long time, the best guarantee is to serve society. These notions have been lost in recent years, but we want to bring them back – for the greater good.”

But if you are a smaller business, do the same rules apply? Yes, because as big corporations such as Unilever, Walmart and Marks & Spencer drive CSR down through their supply chains, SMEs will be expected to up their game along with everybody else. Moreover, business opportunities will open up to provide greener and more ethical solutions to those big brands. And, lastly, but most importantly, do you not want to make the world a better place?

This was posted in Bdaily's Members' News section by Gareth Kane .