Simon Nurse reflects on the role corporate social responsibility in business.
The main focus of the Cardiff Innovation Network’s latest event was Corporate Social Responsibility (CSR). Or, to put it more plainly, business benefits from contributing towards society. Guest speakers were provided by Cardiff University’s Centre for Business Relationships, Accountability, Sustainability and Society (BRASS), and Broomfield Alexander, a Welsh accountancy and consultancy firm. CSR they told us was good. It marks you out as different. It delivers great PR, increases your customer base and bolsters your bottom line. It gives you a lovely warm feeling inside. CSR in short, is a smart thing to do.
If that’s the case however, why do we see so few companies with CSR at the heart of its values? CSR is barely on the SME agenda (according to BRASS 99 per cent of all businesses in Wales are SMEs) and glossed over in the policies of many larger businesses. The answer I believe lies in deeply entrenched views that cling on to outmoded business practises – views that have more in keeping with 19th century cotton mills than 21st Century agenda setters.
Maybe that’s too harsh. Perhaps the business benefits of more socially responsible policies are not immediately obvious. Up to a point I would have some sympathy with that. Businesses exist to make profits and with twenty years in industry behind me I am well aware of the pressures to perform. Jaded business leaders shake their heads at the inability to put the finger precisely on the pounds, shillings and pence that CSR can add to bottom line financial results, despite the suggested benefits. But so what? Should it really be just about that? Do we want to live in a world where extra profit is the only motivation for doing a little bit of good?
Well to prove that exercising social responsibility can give you a little more than a warm fuzzy, the Guardian recently reported (28th Jan) that the chocolate maker Green & Blacks will be switching their entire worldwide beverage range to fair-trade by the end of a next year, the first major company to do so. This commitment is about much more than being charitable. There is money to be earned and Green & Blacks are both exploiting the opportunity (they are not a charity) and sharing the benefit. They are proving it’s possible to have the penny and the organic bun – a fine high profile example of wearing CSR on your sleeve and using it to drive the business forward.
The Green & Blacks initiative will go part of the way to raising fair-trade commerce from £660m in 2009 to an estimated £1 billion in 2010. On top of this the Co-op, arguably the UK’s best example of responsible business, reports that:
“Like-for-like sales (including VAT and excluding fuel) increased by 5.0 per cent in the three-week festive trading period to 2 January, and by 4.8 per cent in the 12 weeks to 2 January. This is the sixteenth consecutive quarter of like-for-like sales growth. In the same 12 weeks, total year-on-year sales (inc. VAT, exc. fuel) grew by 66 per cent, boosted by the acquisition of Somerfield”.
Growth for 16 consecutive quarters would be pretty exceptional even outside of the recent economic turbulence.
Businesses always have and always will exist to make profit. Few would dispute or disagree with that. But rather than pursue relentless growth at all costs – a situation that very nearly delivered financial apocalypse – it is right for companies to work on all aspects of their triple bottom line: human capital, natural capital, and business profit. What I hope to see is a business landscape populated increasingly by organisations that decouple profit at all costs from core management principles and help to drive improvements in our society. After the events of the last few years, a 21st Century mantra of people, profit, planet is perhaps not a bad one.