Corporate social responsibility means thinking about your community as well as your bottom line. To be socially responsible, you have to consider the effect your business practices have on society, your workers and the environment, and act to make those effects positive, even if it costs money. That may sound impractical, but champions of social responsibility say it can actually help your business become more competitive and profitable.
Definitions
Corporate social responsibility means considering the rights and health of your workers and your suppliers' workers. The British government's Business Link website says it also includes reducing pollution, using resources effectively and running your company in accordance with both law and business ethics. While many corporations use philanthropy to promote their image as good citizens, the way your company conducts its day-to-day operations can be important. Charitable donations may not compensate for negative reports that you mistreat your employees.
Reduced Risk
One big benefit of being socially responsible is that it reduces the risk of investigation, litigation and prosecution. If you don't use illegal child labor and refuse to deal with suppliers who do, you don't have to worry about the legal and PR consequences of the practice. If you avoid business scandal, governments have less reason to regulate what you do or pass legislation that makes it harder for you to run a profitable company.
Improved Reputation
Reports that you engage in toxic waste dumping or discriminate in hiring can ruin your business reputation. A commitment to social responsibility, on the other hand, can help you stand out from the pack; it can increase employee and customer loyalty, enhance the power of the company's brand and make you more attractive to investors. It's important to publicize your social-responsibility efforts so that the public and your stakeholders know about them, but to be really effective, your commitment has to be genuine, not just a publicity stunt.
Improved Efficiency
Part of social responsibility is running your business in a way that minimizes any damage to the environment. This can actually increase your profits, the Business Link website states; by using water and power more efficiently, you save money. Wasting less paper in the office also saves you money as well as reducing the amount of trash your company generates. Buying supplies or equipment locally reduces shipping and packaging costs and also strengthens your ties within the community.
