Making a business case for Corporate Social Responsibility

November 15th, 2011 by Focus HR Solutions Ltd

(Please click on logo to go to company website)

Corporate social responsibility (CSR) is about companies conducting their business in an ethical way, taking account of the impact of the business economically, socially, environmentally and in terms of human rights – a move which takes a company’s responsibilities beyond those of the traditional stakeholders such as shareholders and local suppliers.

CSR is not a new idea. In the past decade the concept has developed into a mainstream business activity adopted by household names the world over.

CSR is taught now in business schools, perhaps due to increasing concerns over the environment, particularly climate change, which led to the development of Environmental Reporting.

Businesses are already accountable for their activities in the various strands that come under the CSR umbrella e.g. human resources, environmental issues, sustainable development, waste management, health and safety practices through a wide range of guidelines at national, EU and global levels.

It is important to distinguish between these base-line standards and CSR activity which is entirely voluntary and often goes well beyond what is required by legislation.

So, should your organisation get on board if you haven’t already?

CSR has its believers and non-believers. Critics argue that CSR distracts from the economic roles of businesses (i.e. to maximise profits). Supporters argue that they make more long-term profits by operating with a perspective.

Placing importance on CRS within an organisation can attract customers. More often we choose choose brands and services that are environmentally safe or are provided by a socially responsible company due to our own ethical standards and views and also as a sort of ‘badge of honour’.

The fear of being found lacking after setting-up as an ethically-conducted business may have put some organisations off and so will the difficulty in demonstrating the value of these principles.

Research by Business in the Community shows that companies running their businesses according to responsible principles outperformed FTSE 350 on total shareholder returns between 2002 and 2007 by between 3.3% and 7.7%. Other benefits included improvements to a company’s reputation, increased trust from customers and increased employee engagement.

CSR can also strengthen corporate culture. Corporate Social Responsibility is one of the main reasons young graduates may lean toward a certain employer. The most desirable trainees want to work for the most desirable companies and that means being ethical and moral too. This follows through into future careers, with expectations of employing businesses being set higher and higher. The perception is that if an employer takes time and effort to look after its suppliers, its customers and the wider community, then it will adopt the same caring attitude towards its employees.

So, is CRS something that’s here to stay or is it just a passing trend?

Some argue that CSR is purely window-dressing and will soon pass and with much of the world now in recession, perhaps we can expect to see CSR slip down the corporate agenda.

However, it seems that The European Commission’s Vice President, Günter Verheugen, had it right when at the February launch of the commission’s latest European Competitiveness Report he said “socially responsible enterprises will find themselves in a better position than others, since they can rely on a lot of strengths, including their dedicated workforce. Our report demonstrates that CSR is good in good times, but an undeniable must to cope with bad times.”

Focus are taking our own advice on Corporate Social Responsibility by providing free payroll support for Headway Guernsey and hope that other businesses might be able to think of ways to help other worthwhile causes too.

Focus HR Solutions Ltd won the 'Bill Green Award 2011 for Entrepreneurial Spirit' and were shortlisted for Awards for Achievement 2010. Please click on the Award logo to go to the company website)

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