What does it mean to be socially responsible corporation?
If a clear answer to this question eludes you, you’re in good company. It seems that every business leader has a different take on what corporate social responsibility means and how well her organisation meets the definition.
The “Must Dos” of Corporate Social Responsibility
For example, while it might seem common sense that legal responsibilities should come before all others; the news media is full of examples of companies which have failed to get that point. As a for instance, in 2013, one retail supermarket giant was being lauded for its place as one of the most charitable organisations in the world, while at the same time unlawfully threatening, punishing and firing its employees in no less than 14 states in the U.S.; a practice for which it later faced federal charges.
The moral of this story is that while investing time, money and effort in legal compliance doesn’t necessarily score many PR brownie points, it does keep your business in business and out of the bad-news press—for the simple reason that it’s an essential element of corporate social responsibility.
The “Highly Desirable” Elements of Corporate Social Responsibility
What I call the highly desirable elements of CSR would, but for the fact that they are not necessarily legal considerations, belong with the “must dos”. Environmental and ethical issues have far reaching implications for your company, especially if your supply chain operates globally, rather than purely within your country’s national borders. A number of renowned clothing retailers found that out to their cost after the Rana Plaza building collapse in Bangladesh.
The general perception of Joe Public today is that companies have a responsibility, not only toward local society, but also toward the communities from where goods and materials are sourced.
If anything, the reach of environmental responsibility extends even further, with a broader scope to boot. The legal onus to minimize environmental impact becomes greater year on year, but the pressure from consumers and society generally, is possibly an even more influential force driving corporations to be green.
The more your company does to reduce greenhouse gas emissions and support sustainability, the more it will appeal to an increasingly environmentally conscious customer/stakeholder population.
Of course this is totally right and understandable, regardless of your standpoint on what it takes to be a socially responsible company. The welfare of the environment affects everybody, everywhere, so there can really be no question as to the importance of reducing pressure on finite resources and preventing environmental deterioration.
The “Nice to Dos” of Corporate Social Responsibility
So where does a socially responsible corporation stand on the subject of giving?
Corporate philanthropy is a noble practice, helpful to those in need and worthy of the good impression it projects. In many cases it’s also something that’s easy to engage in and doesn’t need to involve donations of vast monetary sums.
Here at Logistics Bureau for example, we give to numerous worthy causes, through a global NGO called B1G1 (Buy One Give One), which operates such a simple and convenient model for giving, that our organization and customers can help those in need on a daily basis, with minimal distraction from the business of meeting professional obligations.
We do this primarily because our team believes in helping people on an altruistic, as well as a professional basis.
Professionally, we love to help our customers grow and improve their businesses. From an altruistic perspective, we love to donate a proportion of our earnings to causes that need assistance.
If your company does not engage in philanthropy though, is it any less likely to attract revenue from products or services, if they are of the quality and value that its market demands? Will society consider yours a less-than-responsible business if philanthropy is not on your CSR agenda?
Perhaps the ultimate test is this: Will prospective customers ask if you engage in corporate philanthropy before deciding whether to do business with you?
The reality is that you are more likely to be asked the following questions by existing and prospective customers:
• Does your company engage only suppliers with sound ethics?
• Can you supply evidence of compliance with legal codes?
• What green initiatives do you employ to reduce environmental impact?
Therefore, it’s safe to consider community aid programs, corporate philanthropy and other charitable ventures as “nice to dos”, while building your corporate social responsibility manifesto around legal compliance, environmentally friendly operation, positive working conditions and ethical procedures within all partner organizations as well as your own.
Prioritising Your Corporate Social Responsibilities
When working on a corporate social responsibility manifesto, a sensible order of prioritization might be as follows:
1) Start by considering all the laws, rules, regulations and professional codes that apply to your industry. Remember also that in some countries, there is something called a “chain of responsibility”. This means that your company can be held responsible for the transgression of another organisation, if that organisation is in any way acting on your behalf.
2) When you are confident that your company is legally compliant, your next consideration should be to ensure you act responsibly toward the following societal groups:
a) Your employees, by treating them ethically, fairly and providing them with good working conditions.
b) Your local community, by preventing any operational aspects of your business from having a deleterious impact on those with whom your business shares that community.
c) The communities and employees connected with your supply chain and other corporate partners.
3) Along with ethics, your company should take responsibility for its environmental impact, by continuously seeking initiatives to reduce emissions, minimize carbon footprint and utilize sustainable resources.
When the three points above are covered off or, at least, are being actively worked on, it should be safe for your company to claim that it’s a socially responsible organisation.
At that point, you may want to think about how your business can seek to actively benefit your local community, other communities, and society generally, by getting involved in philanthropy or other activities which may or may not relate to the nature of your business.
Keep an Eye on Your Triple Bottom Line
It can be argued that the primary responsibility of any commercial organisation is to generate profit for its shareholders and, indeed this is true. However it’s simply unacceptable to target profits without regard for the welfare of our planet and its people.
As the world becomes ever more connected and the impact of business is spread over a global expanse, your company has to focus more and more on not one, but three bottom lines—profit, planet and people. The most successful enterprises are those managing to attain a focused perspective on each and to strike an appropriate balance between all three.