Growing a socially responsible business

By Nicky Amos
CSR Director
Corporate Culture

What is it all about?

At the heart of effective giving is the core purpose of your company and the difference you make through your core products and services. As Fred Goodwin, Chief Executive of RBS Group says, for them "the real nature of our responsibilities…stem from the impact financial services have on people's lives." In other words, values create value.

Corporate social responsibility (CSR) or corporate responsibility is about managing your business to achieve both commercial and social benefit. In essence it's about managing your social, community and environmental impacts to help you improve results, reduce risks and enhance your reputation. It is also about growing your business in a way that has value for everyone connected to it.

Don't be put off by the term 'corporate'. CSR applies to small- and medium-sized private companies as much as it does to public and not-for-profit organisations. In fact, it applies to any organisation that fulfils a role in society. Given that 99% of all business in the UK today is conducted in small- to medium-sized enterprises (SMEs), the impact of family-owned and other smaller companies is particularly influential in our daily lives.

If you own or manage a business or enterprise, the way you run your company will almost certainly be shaped by your own personal values and principles, along with a good measure of common sense. The chances are you will already have examples of good CSR practice in your company - perhaps in the way you look after your staff or suppliers, or through your involvement in local community programmes.

So, what is different about your approach and that of other companies who advocate CSR? Probably very little. One difference may be that others are beginning to approach corporate responsibility in a more formalised way. This does not necessarily mean changing what you do. Neither should it be complex, time-consuming or bureaucratic. It is simply about being clear about the commercial and social benefits you are seeking, ensuring that your ambitions are commercially realistic, and taking your employees and other people connected with your company along with you.

In determining whether CSR has a role in your company, consider the following questions:

What social benefit am I seeking?

A growing area of interest is how to create philanthropic strategies for people who have made it in life. Giving adds meaning. We predict a growth in the professionalism in which individuals and family business owners give, with a focus on identifying social causes and campaigns that leave a lasting legacy.

A number of business owners mistakenly believe that social responsibility is about "giving something back" to society. Many philanthropic efforts, whilst honourable, fail to make a connection between a nominated social cause (such as supporting cancer research) and a company's core product or service. Yet most companies exist to create products or services that people value.

Social responsibility is about recognising the difference your company can or does make. Linking your philanthropic efforts to your core product or service will help you define a fit for purpose approach that aligns with your business aims and delivers a clear social benefit.

What commercial benefits am I seeking?

Like most companies, you are probably seeking one or more of the following benefits from a CSR programme:

• Helping to meet regulatory and legislative requirements;

• Improving your company's reputation;

• Improving relationships with people who are important to your company;

• Managing the risks your company faces;

• Achieving better results through innovation and/or efficiency gains;

• Meeting the 'CSR' standards expected of you by your corporate customers.

More than anything, CSR is about earning the trust of customers and employees. A robust approach to managing your organisation responsibly and communicating what you do and how you do it will earn trust. And trust wins customer and employee loyalty.

How do I manage my business for commercial and social benefit?

Being clear about the social and commercial benefits you are seeking will help you focus on turning your 'principles' into practice.

CSR practices will vary from company to company. Typically, though, they focus on four key areas: Environment - Workplace - Community - Marketplace.

To give you a feel for the types of activity you might focus on, here are a few examples under each heading:

Environment

• responsible purchasing (ie low energy, recycled or ecologically sustainable materials)

• energy efficiency

• minimal packaging

• waste management

Workplace

• health and safety

• fair pay

• skills development

• team building

• equal opportunities

• diversity

Community

• employee volunteering

• charity partnerships

• fund-raising

• give as you earn

• sponsorships

• gifts in kind

Marketplace

• fair pricing

• access to people with disabilities

• marketing with a cause

Who do I need to involve?

Having established a direction for your CSR approach and understood what areas you might focus on, you will then need to engage the key groups of people connected with your business - your 'stakeholders'.

Typically they will include:

• Employees;

• Local communities;

• Customers;

• Suppliers.

Engaging with them on CSR means sharing what you are doing; listening to what they have to say; and using their views to shape your thinking going forward. One final word on CSR: it is about being on a journey. You won't reach your destination overnight, but, if properly thought through, you will soon begin to realise the benefit of your approach, as the case studies of HMG Paints and Noel Chadwick illustrate.

Case studies

HMG Paints Ltd

HMG Paints Ltd is a family-owned business employing up to 200 people in the North West of England. HMG Paint's commitment to social responsibility comes from the top, with its owners feeling strongly about giving something back to society.

Almost 85% of the workforce lives within a five-mile radius of the company. Community initiatives include in-kind giving of paints and other materials to local facilities, the provision of outdoor classrooms and work experience opportunities, and the creation of a community woodland and wildlife centre used by schools and local people.

The company believes that any investment made to community initiatives feeds back to the company with greater motivation from employees and enhanced understanding amongst the local community of what HMG Paints does. Such initiatives also improve HMG Paints' prospects for employing any future workforce as well as enhancing its current reputation both locally and further afield.

Noel Chadwick Ltd

Marketing itself as a "farm-to-fork" food retailer, this family-owned business employing 55 staff prepares and sells locally sourced meat via its on-site abattoir, food hall, and fully licensed restaurant. Specialising in locally sourced produce, the business successfully competes in a highly challenging marketplace. It also has established itself as a good neighbour in the local community. Since 2001, Noel Chadwick has employed young people with learning difficulties and donates food and financial assistance to several small charities and local events.

Since 1999, sales turnover has increased by over 300% to £2.25m. The company's strong local links also mean that it remains close to its customers and is able to respond quickly to their changing needs and demands. As a result, a new product line of ready meals and cooked pies has recently been introduced.

The business has received a huge amount of publicity from its success, particularly since being awarded the Federation of Small Businesses' "Small Business Champions Award" in 2004. The company is currently working towards achieving Business in the Community's 'CommunityMark' standard.

General CSR Resources:

• Business in the Community (BitC) is a movement of 700 member companies committed to continually improving their positive impact on society. The BitC website has a section dedicated to its Cause Related Marketing Campaign where you can find detailed guidelines on principles and processes for good practice. For more details, visit www.bitc.org.uk or www.crm.org.uk.
  

• Arts and Business helps arts organisations and businesses to work together. For more details, visit www.aandb.org.uk.
  

• Most regions have an organisation dedicated to helping companies become involved in local causes. Check with your Chamber of Commerce or other business advice services for local contacts. To find your local chamber, visit www.chamberonline.co.uk.
  

• The Small Business Consortium was established in March 2002 in response to feedback from SME owner-managers who asked for a collaborative approach to corporate social responsibility by the main SME stakeholder organisations. The Consortium is open to any SME stakeholder organisation that wants to engage in CSR. For more details, visit www.smallbusinessjourney.com.
  

• Charities Aid Foundation (CAF) is a registered charity committed to increasing the flow of resources to the voluntary sector. CAF works in partnership with organisations by providing a range of services including payroll giving through Give As You Earn, matched giving programmes, charity accounts, personal charitable trusts and corporate trusts/foundations. For more details, visit www.CAFonline.org/companies.
  

• The Business Community Connections is a not-for-profit organisation dedicated to helping charities obtain more support from small- and medium-sized companies. For more details, visit www.bcconnections.org.uk.

Corporate Culture combines marketing communications skills and advice on corporate responsibility to help public and privately-owned companies, charities and non-governmental organisations achieve social and business benefits. For more information, visit www.cc-plc.com.