Corporate social responsibility. It's certainly worthy, but is it worth it for small businesses?
Don't be put off by the terminology and the impression that you need to achieve the impossible – setting up and running a healthy business is hard enough without worrying about your conscience.
And those companies that have been very big on CSR, like, say, Enron, haven't always been the most virtuous of companies, treating social responsibility as a sort of corporate window dressing. Having a CSR policy and being ethical are not one and the same thing.
But while small and micro businesses aren't subject to the same sort of regulatory scrutiny as larger companies, that doesn't mean you should ignore CSR. Potential business partners, employees and customers pay a great deal of attention to a company's ethical credentials.
The business case for CSR
Too often, CSR is seen as an aside to the business, something that gets in the way of real work. But it's not just a feel-good activity; there is a strong business case to be made for CSR. Principles and profit needn't be rivals.
- Up your reputation. Let your customers and stakeholders know about your CSR activities. That's not to say you should be smug, but don't be coy either. It's an excellent way to boost your reputation and a cheap and effective way to differentiate yourself from your rivals.
- Reduce overheads. Allowing flexible working (thus reducing office space and power consumption), switching to energy-efficient lightbulbs and generally being more aware of your energy usage can lead to long-term savings.
- Recruit and retain talent. CSR is an excellent way to both attract and keep hold of top talent. Your green and charitable credentials may well be the deciding factor for a job applicant, and employees are more likely to stick with a company that they feel aligns with their own values.
- Win more business. CSR can be an integral part of your business development strategy. And, increasingly, companies only work with other businesses that are doing their bit.
- Develop employees. Employees who volunteer or engage in a charitable project may well learn new skills – fundraising, project management, public speaking, etc – that they can bring back to work.
Size doesn't matter
You don't need deep pockets or large, flashy projects to make a difference and reap the benefits.
Indeed, every pound and hour matters to the lean business so there's no sense in spreading yourself too thin or taking a 'spray and pray' approach to CSR. It's much more effective to focus on supporting a few causes rather than flirting with dozens.
Establish a brief, simple strategy for your charitable activities and perhaps ring-fence some money for the purpose. That way you can keep track of what you do and control how much time and money you spend on CSR initiatives.
Anyway, you may already be doing more than you realise: paying a fair wage, encouraging the development of your employees, allowing flexible working, recycling and dealing honestly with your customers and suppliers is all worthy stuff.
Start small: CSR ideas for small business
If you want to do more than the minimum though and you're stuck for ideas, here are a few to get the ball rolling.
- Make small loans to individuals through microlending sites like Kiva. You might lend individually, or you could set up a company portfolio to give your loans more oomph.
- If you want to give to charity but don't want your money to be spent on salaries, admin costs and fancy offices, try GiveDirectly.org, which use mobile technology to transfer money direct to the world's extreme poor.
- Match donations that your employees raise for their own charitable activities.
- If you don't fancy establishing your own CSR project, collaborate with a business that already has one up and running.
- Try to source your office supplies and energy from green suppliers, like The Green Office and Good Energy.
- Encourage your staff to save energy in small ways – switching off the lights, not over filling the kettle, printing less, turning the thermostat down, switching off electrical equipment rather than leaving it on standby and so on.
- Go paperless.
- Form a company pot and buy into an ethical investment fund – a perfect blend of profit and principle. These can be more volatile than other funds, however, given their limited exposure to oil, gas and commodities, and their weighting toward smaller companies.
So CSR doesn't have to be all fireworks and world-changing initiatives. Just give a little and you could get a lot more back.
(Updated December 18th 2018 by Callum Sharp.)