The importance of Corporate Social Responsibility in business
It does not matter whether you are operating in the public, private or 3rd Sector, CSR (Corporate Social Responsibility) is applicable to you. Millennial consumers, the largest generational cohort (born roughly between 1980 – 2000) have found their voice. They are digitally savvy and conscious capitalists (that is, they admire organisations that serve the interests of all their major stakeholders – customers, employees, investors, communities, suppliers, and the environment); a potent force when moved to action. In the public sector, the UK’s Public Services (Social Value) Act 2012 requires all public bodies in England and Wales, including Local Authorities, to consider how the services that they commission and procure might improve the socioeconomic and environmental well-being of an area.
Sounds a bit academic? Let me try to bring it to life for you by giving you three high profile examples. There has been a raft of reports highlighting a number of multinational firms with a UK presence apparently avoiding paying tax. The companies appear to have been operating legally, but nevertheless, there was a huge wave of negative opinion from the public, who were simultaneously facing austerity cuts in the face of the Great Recession.
Public trust in charities in England and Wales has fallen to the lowest recorded level since monitoring began in 2005, in the wake of a series of high-profile scandals. These have included: accusations of financial mis-management at Kid’s Company and the suicide of a pensioner experiencing heavy-handed fundraising tactics.
And finally the Deepwater Horizon oil spill events in the Gulf of Mexico, which cost BP in excess of $50bn, was not only a tragedy and environmental disaster but a disaster in the way the crisis was handled, including an apparent lack of empathy and compassion from senior management, lack of information about the situation and financial offers to those considering lawsuits for not bringing them.
In all cases, each of the organisations involved suffered significant damage to their reputation, but beyond this was a loss of business and worse still, a loss of life.
So what is CSR? CSR refers to any policies, practices or initiatives that an organisation commits to and which create shared value for both the organisation and society. In broad terms, these can be grouped under the headings of; Community, Governance, Workers, Environment and Customers. The terms are loose and can vary according to the system adopted, but in practice, many organisations, on adopting CSR find that a number of their policies, practices or initiatives can start to form the basis of a CSR strategy. Thus, to become a CSR led company does not necessarily require significant budgets but it does require commitment from senior leaders, a strategy to develop CSR and a real desire to embed it into the core of business operations to create shared value for the business and society.
Still not convinced? The perception and reality of an organisation's performance on social responsibility will significantly influence:
- Its ability to win and successfully deliver public authority contracts
- Its competitive advantage and brand loyalty
- Its reputation
- Its ability to attract and retain employees, suppliers and customers
- The maintenance of employees' morale, commitment and productivity
- The view of investors, owners, donors, sponsors and the financial community
- Its relationship with companies, governments, the media, suppliers, peers, customers and the communities in which it operates
Seetec has taken the view that we cannot afford to disregard CSR. We have undertaken a B Impact Assessment and become a certified B Corporation in order to lend weight to our commitment to CSR. During this process, we identified a number of gaps, honed our strategy and produced a five year action plan to further raise our game. We believe that this is invaluable to us and to all those who come into contact with us.