Profit with a Conscience ; Corporate Social Responsibility Is Not Only Essential, It Pays off Too, Says Gareth Chadwick
Chadwick, Gareth, The Independent (London, England)
Corporate social responsibility (CSR) is nothing if not a mouthful. But the jargon disguises a very simple idea: that rather than being narrowly focused on the pursuit of profit at the expense of all else, businesses should behave responsibly in the course of their profit-making, taking into account their wider role and impact on society.
It is not a new idea. From philanthropic Victorian industrialists such as the Lever brothers, the Cadbury brothers and Titus Salt, to the Co- operative movement and recent innovators such as The Body Shop or Ben & Jerry's ice cream, businesses have tried to be forces for good in the community, not just exploiters of manpower. Ben & Jerry's, for example, contracted the Greystone Bakery in Yonkers, New York, to bake its brownies, a firm that used its profits to house the homeless and train them as bakers.
But whether it is building links with community groups, treating staff fairly and ethically, implementing waste minimisation policies or sourcing environmentally friendly suppliers, modern CSR, or CR (corporate responsibility) as it is often shortened to, has moved far beyond philanthropy.
Today, the case is focused on the practical, tangible benefits of businesses behaving in a more responsible way. "Businesses are much more aware of the broader impact of what they do. They increasingly realise that it is a false economy not to consider the social aspect, including environmental issues. If you do ignore it, it will eventually come back and bite you and there are likely to be financial consequences in that," says Erik Bichard of the National Centre for Business and Sustainability.
Clearly, there is still a strong moral case for businesses to try to have a beneficial impact on society. But that has always been the situation and with one or two high profile exceptions, there has been very little to show for it.
But the business case has become harder to ignore. One issue is recruitment. An undergraduate survey in 2003 conducted across the world's 20 largest economies found that three in five undergraduates would choose to work for a company that could demonstrate its ethical values and positive impact on society, while in the UK 80 per cent said they were more likely to stay in their jobs if their employer adopted a responsible approach to the work-life balance.
A second benefit is in terms of the new ideas and innovation that a close connection with the community can engender. Businesses don't operate in isolation from the rest of society and a stronger link between the two facilitates a better understanding of the market, of who the customers are and how best to service their needs.
The third element is reputation and branding. Over 85 per cent of consumers have a more positive image of companies that are seen to be pursuing more responsible business practices and over half of European consumers say they are prepared to pay more for environmentally responsible products.
It is a figure which is borne out by the rapid growth in the market for fair trade products. Sales of fair trade products grew by more than 50 per cent in the UK in 2004, with shoppers spending pounds 140m on them.
CSR can also provide a competitive edge for smaller companies. As consumer choice increasingly takes ethical considerations into account, so larger organisations are exercising similar discretion when sourcing suppliers.
The CSR element can be a key differentiator. Businesses want to work with other businesses that reflect their own values and attitudes - and those of their customers. "If as a business you are behaving in a way which doesn't accord with the way your customers thinks you should be behaving, it can withdraw your license to operate. Look at Andersen. It was tainted by the actions of its client Enron and disowned by the market. It never recovered," …
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Publication information: Article title: Profit with a Conscience ; Corporate Social Responsibility Is Not Only Essential, It Pays off Too, Says Gareth Chadwick. Contributors: Chadwick, Gareth - Author. Newspaper title: The Independent (London, England). Publication date: March 21, 2005. Page number: 6,7. © 2009 The Independent - London. Provided by ProQuest LLC. All Rights Reserved.
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