Responsible business is good business

When talking about sustainability and responsible business “that’s all very well but what are the benefits to my business?” is a common response. Generally people understand that it is something that would be good for the environment and wider society but question what it means for the viability of the business. Thankfully, it isn’t an either/or issue and a new report  from Business in the Community, highlights that ‘responsibility’ can bring real opportunity.

The BITC work, from the Doughty Centre for Corporate Responsibility, involved a literature review and examination of submissions to the BITC CR index and the Awards for excellence Big Ticks. From this we can look at what matters for SMEs?

The most cited benefit is improving brand value and reputation, although it appears to be getting less important – maybe because it is a vague concept and businesses are recognizing the specific things that are contributing to the stated benefit. Next is employees and future workforce, observing that motivation for people is far more complex than salary and bonuses – a sense of being part of something positive, where individual values match organizational values, and where employees are well-treated and valued is crucial. The idea of improvements in business practice and processes in recognized in operational effectiveness, with better stakeholder relationships, and investment in resource efficiency being key. Unsurprisingly direct financial impact, through cost savings, less fines, and better access to capital is a crucial factor and often seems to the most important to people as it is more tangible. The last two areas cited by SMEs are organizational growth, the idea that growth will follow as a result of embracing responsibility, and business opportunity, with new markets opened up, new products developed, for example. This latter benefit is not always recognized but can be incredibly important as reflected by a client who said “I believe that we won a £4 million+ contract because of ISO14001, the help we received and our wider Corporate Responsibility aims”.

The Canadian Institute of Chartered Accountants (CICA), echoes these attributes of sustainability in a different report, finding that companies that embraced sustainability “improve profitability, generate greater loyalty and commitment and cement relationships with customers and suppliers”. The message seems to be getting through as in the CICA survey 33% of SMEs said they had defined a sustainability strategy and a further 23% intended to do so over the next 2 years.

So the potential business benefits are there, it is just a question of taking the action needed to grasp them.