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Corporate Social Responsibility
07 March 2011
Socrates once said \"Virtue does not come from wealth, but wealth, and every other good thing which men have, comes from virtue.\"
In the 1987 movie Wall Street, Gordon Gekko's character famously said \"Greed is Good\"
In 2010, you would be excused for thinking the corporate world is likely to have more in common with Gordon Gekko, than a 400 BC philosopher.
But the continuing strength and focus on Corporate Social responsibility (CSR), by businesses across the globe, seems to indicate our modern age may just be on the path to a more virtuous one.
CSR is the notion that decision-making in corporations can and should take into account the impact of their actions on communities and the environment.
It's been around for several decades, and is also referred to often as the triple bottom line; people, planet, profits or more recently as Corporate Sustainability.
Whatever you call it, it has not really been until now that I've started to get the feeling CSR is finally going main-stream.
Businesses of all sizes are now making key investment & supplier decisions with an eye-out for the \"ethical street-cred\" of the action.
The cynics amongst us may think this is more about trying to manage corporate reputations in a highly inter-connected and wired world, than any genuine motivation to make the world a better place.
As an article in CCNMoney recently noted : \"in a world where disgruntled employees and unhappy customers can trash you globally in the time it takes to dash off a nasty blog..., it's becoming much harder to manage reputation...\"
But personally, I think CSR is taking hold because it works on many levels.
First,employees. It's easier to advocate for your company if you trust them, and its even easier if you are actually proud of them because of specific policies, programs or actions they take which contribute positively to society.
Happy employees work hard, stay with the company, advocate and innovate.
Second, customers. Businesses that damage the environment or the communities around them may loose customers. Conversely, those that take a more holistic approach can attract customers. Just look at the Ben & Jerry's Ice Cream story. The two-man, \"hippy\" ice cream business started in 1977 with strong values about the environment and the community. It sold in 2000 to Unilever for around $US 326m with thousands of existing customers all over the world.
Third, money. Let's be crass. Being ethical pays. If the Ben & Jerry's story didn't prove it, take the example of Marks & Spencer, the UK retailer. In 2007, M&S pledged over 200 million pounds over 5 years to their \"Plan A.... because there is no Plan B\" CSR strategy.
By 2009, M&S reported that the energy and waste cost savings alone had already made the plan cash positive. Importantly, according to research by the Reputation Institute, Plan A had also made M&S the most reputable brand in the UK.
So if happy, retained employees, new customers and cost-savings sounds like something you might be interested in, CSR might just be your thing.