A staggering four out of five consumers would rather buy from socially and environmentally responsible companies, says a 2003 Social Market Foundation study. It would appear that Corporate Social Responsibility (CSR) is no longer just desirable, it’s essential to business growth.
The Confederation of British Industry defines CSR as an acknowledgment by companies that they’re ‘responsible not only for their financial performance, but for the impact of their activities on society and/or the environment’. This includes responsible sourcing of products and services, as well as respecting all stakeholders’ needs, not just shareholder profits. Alison Garner, communications manager for CSR at BT, says the company’s main challenges are sustainable economic growth, wider inclusion of all sections of society and tackling climate change.
Clear conscience, healthy bottom line
Having a CSR-orientated approach could also secure more new business. Garner confirms this: ‘In recent years around £3bn worth of potential business has asked to see our CSR credentials.’
It’s certainly a hot topic, thanks to extensive media coverage, intensive lobbying by non-government agencies such as Greenpeace, and recent financial scandals such as Enron. The pressure on policy makers is such that politicians’ in-trays are overflowing with CSR-related issues, resulting in myriad new laws that call for an increasing level of corporate commitment to CSR. Which is why it is vital for all businesses, both large and small, to embrace CSR.
Take the environmental footprint of UK businesses – the British government is aiming for a 60 per cent reduction in UK carbon emissions by 2050. By switching to greener policies, firms could see an impact on their bottom line too. For instance, lowering your company’s energy consumption will reduce your fuel bills and improve your brand image.
Moreover, with brand image often the only thing setting companies apart, an impressive CSR policy could be the decisive factor in the minds of potential clients. Swedish-owned packaging giant, Tetra Pak, recently announced that it aims to reduce its CO2 emissions by 10 per cent over the next five years and that it will purchase only green energy for its German production sites. Others will follow suit.
Not a luxury but a necessity
The business case for CSR is equally compelling. Research shows that investors consider the ethics of companies they are funding, so much so that the Accountability Rating, now in its third year, will appear in the November issue of Fortune magazine. ‘It looks closely at how companies integrate responsible business practices into their core processes, and whether they are able to develop a corporate strategy that responds to stakeholders’ expectations,’ says Mark Line, director of UK CSR consultancy, CSR network.
The key issue for investors today is how a company manages environmental, social and ethical risks as well as opportunities to preserve and develop shareholder value. In short, CSR is not just about philanthropy and ticking the right boxes, it provides a competitive edge. It’s good for the soul and the company balance sheets too.
BT: Doing the right thing
CSR has always been on BT’s agenda. The company was striving to bring about social inclusion long before the phrase was coined, through developments such as the launch of a telephone for its hearing-impaired customers in 1936. Today BT has several initiatives that have seen it recognised on an international scale.
* The Everybody Online initiative aims to span the digital divide by introducing people in disadvantaged communities to the benefits of the internet.
* By having around 11,000 flexible workers, BT not only helps the environment but offers job opportunities to people with disabilities and young families.
* Since 1996 BT has reduced its CO2 emissions by 60 per cent, helped by the company’s use of video and telephone conferencing where possible.
* The Percent Club measures corporate giving. As a member, BT donates at least one per cent of pre-tax profits in funding and in-kind support to good causes every year.
* In 2007 BT’s community contribution was £21.8m. It has been ranked the number one telecoms company in the Dow Jones Sustainability Index for the last seven years running.
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