Corporate Social Responsibility (CSR) sounds worthy, but is it worth it for your small business? We talk to CSR researcher Dr Martin Brueckner about the benefits and how to implement a successful program when you’re small.
CSR boasts more than its share of definitions but, at its core, it’s chiefly a means by which organisations can make a positive contribution to society. This could include efforts to ‘go green’, employ a diverse workforce, ‘give back’ to the community, and other ways a firm chooses to balance the pursuit of profit with a commitment to ethical conduct.
For small business, the term CSR is a bit of a misnomer – implying something costly, time consuming and, well, corporate. However, whether you’re a staff of 10 or a company of 100, becoming a socially responsible business is not just feasible, it’s increasingly important.
Staying ahead of the game
With greater awareness around how companies conduct themselves, consumers are becoming more selective about the brands they choose to support. According to Nielsen, one in two Australian consumers said, when buying a product or service, it’s very important to them that the company shows a high level of social or environmental responsibility.
When there’s a more direct interface between a business and its stakeholders – as is typically the case with small businesses – responsible business conduct becomes even more critical.
As Dr Martin Brueckner, a senior lecturer and CSR researcher at Murdoch University, explains: “SMEs are more on the frontline; their owners often live in the communities in which they work, the market being catered for is often the local market and there’s a shorter supply chain. Compared with large corporations, local opinion matters more and the actions you take can have a more immediate effect.”
Reaping the rewards
Just as poor practice will have a negative impact, there’s potentially much to gain from going the extra mile.
A strong CSR program can enhance your business’s reputation, build loyalty and lead to a host of other benefits. “These include boosting staff morale, greater staff retention and improved interfacing with customers,” says Dr Brueckner.
According to the Australian Institute for Corporate Responsibility (AICR), companies can also acquire better networks and greater knowledge of community needs through their CSR initiatives.
Of course, the end goal for all but the most altruistic of companies is increased sales and profitability, but what criteria should you consider to maximise your chances of CSR success?
The key ingredients
“Research would suggest that effective CSR programs are largely values driven,” says Dr Brueckner. “Where SMEs are concerned, this would typically be the business owner’s values.”
On this note, however, he stresses the importance of being authentic: “The authenticity of whatever form of CSR you pursue will largely depend on the authenticity of the values you espouse. Put your own house in order first and the effects can then radiate outwards to your staff, customers, suppliers and the wider community.”
Clear, consistent messaging is also key. “You need to walk the talk,” advises Dr Brueckner, because with increased awareness comes greater scrutiny. “There’s no point saying you’re an environmentally friendly company if some of the ingredients in your products are toxic.”
With more businesses publishing annual CSR reports, the same applies here. “It’s important for companies to communicate their achievements but not to overstate things – have a sense of humility and be factual,” he says.
Taking the first step
If the concept of CSR is new to you, a good place to start is simply to get more involved with your community. This could be by supporting a local event or charity that reflects your company values. Along with donating money, services and expertise, you can offer paid time off to employees, so they can volunteer.
From there the aim is to try and embed CSR more deeply in your overall business strategy. “It’s companies authentically engaging with their stakeholders and designing their businesses to have the biggest impact that will have the biggest success in the long term,” says Dr Brueckner.
It’s also worth remembering that, given small and medium businesses make up the bulk (more than nine in 10) of Australian businesses and employ over two-thirds of the workforce, the aggregate social and environmental impact of your CSR efforts is certainly not to be sniffed at.
This article was first published on the Optus Yes Business hub in March, 2018.
