Corporate Social Responsibility
Corporate Social Responsibility (CSR) is how business accounts for the economic, social and environmental impacts in its operation – thereby maximising the benefits and minimising the downsides.
Specifically, CSR entails the voluntary actions that business can take, over and above compliance with minimum legal requirements, to address both its own competitive interests and the interests of wider society.
But why should a company commit to responsible business?
Because CSR isn’t just about doing the right thing. It also offers direct business benefits.
The European Commission study entitled ‘Opportunity and Responsibility : How to help small businesses integrate social and environmental issues into what they do’ Directorate General for Enterprise and Industry), refers to the report of the “SME Roundtable” of the EU Multi-Stakeholder Forum on CSR which contains a list of business-related motivations for CSR in SME’s,
This is a useful checklist of the ways in which CSR could help organisations to become more competitive:
- Attracting and retaining motivated and committed employees – especially because the speed of market and technology change increases the need for flexible and engaged staff. Good working conditions achieved by responsible business practices and a participatory management style usually have positive effects on staff morale and lead to a higher job satisfaction and commitment to the firm. CSR may become an increasingly important distinguishing factor for enterprises that face growing competition to attract the best, high-skilled workers.
- Developing and training staff. For instance, the staff or managers of an enterprise can acquire new skills and competences through voluntary engagement with the local community, and this can also result in knowledge transfer and access to new information that benefits the enterprise.
- Winning and retaining consumers and business customers (supply chain pressures and opportunities), especially because economic stagnation means SMEs need to find new markets / revenue streams.
- Being a good neighbour – maintaining a license to operate from the local community.
- Responding to new demands and requirements from banks, insurers and also investors. The strength of this as a motivation for SME’s to engage in CSR is crucially dependent on the extent to which the financial community takes real account of the risks and opportunities that CSR issues represent.
- Reputation – enhanced standing with internal and external stakeholders.
- Changing perceptions of the role of business in society (not only as a source of profit), through the media, education, and actions by stakeholders.
- Cost and efficiencies savings. For example, reduced insurance and landfill costs.
- Networking opportunities enhancement.
- Product / market innovation, differentiation, and competitive edge; and the need for more sources of creativity and innovation in business.
- Anticipating future legislation, so getting practical experience and helping to ease the burden of compliance.
Weave Consulting can assist organizations to achieve these objectives through its innovative, creative and cost-effective strategies. Feel free to get in contact with us