Why bother with CSR? The Top 10 Benefits of Engaging in Corporate Social Responsibility: The Business Case Why bother with corporate social responsibility? Why go to such efforts to behave as a good corporate citizen and demonstrate that you can measure your activities and performance, in terms that mean something to your stakeholders? Corporate Social Responsibility is all about a company knowing, managing and improving |
its impact on the economy, the environment and society. Increasingly, people with a stake in that company, eg clients, suppliers, employees, funding organisations, advocacy groups, the community, (and more), expect a company to be doing this. They also, increasingly, ...view middle of the document...
* An 11-year Harvard University study found that "stakeholder-balanced" companies showed four times the growth rate and eight times the employment growth when compared to companies that are shareholder-only focused.
Access to capital Companies that are committed to CSR often have access to capital that would not otherwise be available, due to the increase in Socially Responsible Investment (SRI). A 2001 study showed that 12% of total investment in the USA was of a socially responsible nature. Likewise, there are were 313 green, social and ethical funds operating in Europe in June 2003, showing a 12% increase in the last eighteen months.
The Dow Jones Group Sustainability Index, the FTSE4Good Index, Morley Fund Management Sustainability Index, BitC Corporate Responsibility Index (and others) all
analyse companies' CSR activities. These indices are increasingly looked at by investors who want to determine a company's level of CSR engagement. Reduced operating costs/increased operational efficiency Contrary to widely-held opinion, improved environmental management systems do not automatically result in greater cost. Over time, they improve operational efficiency by reducing waste production and water usage, increasing energy efficiency and in some cases, selling recycled materials. There are also company specific ways of reducing operating costs e.g. Dow Chemical Co has set themselves a target of reducing |
production of 26 toxic chemicals which will save them 5.4 million Euros per year - 2.3 million Euros more than was spent on the initial investment to do so. By considering impacts, a company's actions can result in environmental, social and economic benefits. Construction firms, for example, reusing products on-site: reduces landfill, reduces community and noise disturbance of additional trucks bringing material to the site, reduces the environmental impact of damage caused by heavy truck wheels and reduces cost for the client of buying new material. Enhanced brand image and reputation A good reputation is often very hard to build - and yet can be destroyed in less than a day. So much of a company's reputation results from 'trust' by stakeholders. A strong reputation in environmental and social responsibility can help a company build this trust. However, it needs to result from real practices and policies and an integrity towards the companies responsibilities. Stakeholders are not stupid and can see through 'fluff'. Non Government Organisations (NGOs) and local communities are far more willing to not take action as a result of an environmentally-damaging incident if it is evident that the company has genuinely worked hard to prevent it happening in the first place, and has in place solid management practices for rectifying the situation - quickly - and for |
learning and improving to prevent an repeat occurrence. Increased sales and customer loyalty Research has shown that consumers not only want good and safe products, but...