Small business owners often ask two simple questions on this subject. First, what is Corporate Social Responsibility (CSR) and, second, what, if anything, do we need to
do about it?
What is CSR?
A recent international survey asked privately owned businesses across the world what corporate social responsibility initiatives they had undertaken in the past year. The results give an indication of what people mean by the term CSR:
71% Actively promoted workforce health and well-being
67% Provided apprentices/work experience
65% Donated to community causes/charities
64% Actively promoted diversity/equality at work
62% Allowed flexible working
59% Improved waste management
57% Improved energy efficiency
55% Participated in community activities
41% Changed products/services
35% Helped other businesses improve performance
32% Sourced local or ethical products/services
Now that we have a basic idea about what CSR might mean, we can move on to the second question…
What do small companies need to do about CSR?
The experts tell us that CSR is no longer the territory of the big multi nationals and corporates. The consensus seems to be that CSR cannot be ignored by any business seeking to survive or even grow in the current tough economic climate. It is rapidly emerging as a commercial necessity rather than a choice for small businesses. The evidence suggests that businesses which adopt responsible ethical business practices are more likely to survive. Businesses that fail to do so will find it increasingly difficult to recruit and retain people. As the pressure to adopt good CSR practices and to do business responsibly continues to grow along the supply chain, companies failing to adopt good practices will also find it increasingly difficult to win contracts from bigger companies and from the public sector. On the other hand, businesses which are innovative and respond proactively and quickly to this challenge will emerge stronger and more competitive, as well as doing their bit to save the planet!
The London Academy’s Colin Gilfillan recently attended a workshop on CSR in Brussels. Organised by the European Commission, the workshop brought together all sorts of organisations, many of them representing Small and Medium Enterprises. It explored CSR in the context of the contributions which businesses, especially smaller businesses, can make to local employment development, especially in these turbulent times. We will post a link to the webcast of the workshop when it is available.
The government has said that ‘appropriate language and small business examples’ are what is really needed to help small businesses on this issue. Research suggests that small and medium sized businesses, with some notable exceptions, lag way behind large businesses in this field. Is this because smaller businesses have failed to engage with CSR? Or is this more to do with a failure of CSR to engage with smaller businesses?
What do you think? What is your experience of CSR? What are you doing about it? What do you think needs to be done about it? Is CSR an important issue or is it really just a red herring?
We would welcome your views, especially if you own a business, work for a small business, or are working with businesses.
 Grant Thornton: Corporate Social Responsibility: a necessity not a choice. International Business Report 2008