Boost your business by being responsible
Isn’t corporate social responsibility just for big companies? Our latest article explores how being responsible can benefit businesses of all sizes.
Responsible business means acting commercially whilst also respecting ethical values, communities, people and the environment.
From international corporations to entrepreneurs starting out on their business journey, there are countless organisations embracing a more responsible way of doing business – and making a profit too.
The rise in corporate social responsibility isn’t just a fad, it’s a consumer driven trend. 51% of the UK public states that they’ve opted for a product or service because of its responsible reputation (source: Better Business Journey, Federation of Small Business).
Implementing commercial responsibility in your business – or even just talking about what you already do more openly – can help you build success. Research from the Institute of Business Ethics states that companies that embrace this can reap benefits across their whole business, ultimately improving their financial position.
Aim for the highest standards
If you want to aim for the best for your business, you could do a lot worse than following in the footsteps of the 2,000+ companies with a B Corporation certification.
These highly successful companies – which include the likes of innocent and Ben & Jerrys – are committed to their overall social and environmental performance through an international certification.
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Being responsible in business can give you a competitive advantage
It’s not just large corporations that can reap the benefits of acting responsibly. In many ways it’s quicker and easier for smaller businesses to make changes. There are a number of gains from acting responsibly which can help you to grow a successful business more quickly:
1. Improved brand reputation – Being transparent with your approach to the environment, the community and people can hugely benefit your reputation by building trust with stakeholders. That can in turn attract more customers as more and more B2B and B2C consumers seek more responsible brands to buy from.
2. Improved productivity – Looking after the people in your business can mean fewer sick days, resulting in a more engaged and motivated workforce with consequently lower staff turnover. This can mean your staff are more productive – and it can also keep recruitment time and fees low.
3. Attracting investors – At the Business Finance Guide we regularly speak with business owners about their funding experiences. We’ve seen that businesses with a responsible agenda tend to attract more interest from investors.
Investors know that being responsible in business is a smart strategy, and one that could reap financial rewards over time, so they are more likely to invest in such business propositions.
From a passionate owner to an engaged team, another important factor for investors is the people within the company, so if you’re able to talk about a motivated workforce, that’s likely to sit well with potential investors.
4. Increased shareholder value – Being responsible in business can enable cost savings (for example with reductions in direct costs), improve operating performance, and boost sales opportunities – leading to stronger financial performance and increased shareholder value.
Being responsible in business can boost the UK economy
As well as benefitting your own business, the changes you make to build a more responsible business can also have a big impact on the UK economy.
The UK’s 5.7 million private sector businesses contribute to UK GDP, they pay taxes and create employment opportunities.
When a business boosts its own performance – and this is collectively done by other small businesses too – there can be a ripple effect that contributes to a stronger economy.
Tips for easily incorporating responsibility into your business
Responsible business will mean something different for one business to the next, and the nature of what a business does will determine key focus points where making changes can have a significant impact.
We’ve outlined three key areas that every business could consider when thinking about their environmental and social impact.
Some businesses offer environmentally friendly products or services, but regardless of what your business does there are ways to consider your impact on the environment.
There are financial gains to be made through greater respect for the environment too: a bakery in Barnsley was able to reduce waste charges by 20% (source: Better Business Journey, Federation of Small Business).
You can create competitive advantage and publicity for your business by telling people when you make a change that you know they are interested in, for example a pub or restaurant that stops using plastic straws.
Some of the positive changes businesses can make include:
- reducing your carbon footprint
- reducing your water and energy consumption
- using more eco-friendly suppliers
- recycling more
- limiting single-use materials such as plastics.
Giving back to the community is a good idea that often returns the favour to the business. It can be a good source of labour, intelligence, and goodwill – and it can produce useful connections. This is especially beneficial if you have a business that’s formed around local trade, such as a beauty salon, a construction business, or an accountancy firm.
The ways businesses can give back to the community can vary. Here are a few things that businesses can do that can have a positive impact for both your business and community:
- giving a percentage of profits to a good cause
- offering your employees payroll giving
- offering up some of your employees’ work time to volunteer for local charities
- partnering with a local charity or an organisation whose mission is aligned with your customer base.
Giving back to the community can also mean adding value to local communities through employment, education and training, or work placement schemes, for example amongst students and unemployed people.
One engineering firm we spoke to at the Business Finance Guide explained how the team often goes into schools to talk to students and teachers about the benefits of a career in science, technology, engineering and mathematics (STEM).
As well as helping the local community, the company has found it beneficial for the business, as they’re starting to see more people in their area considering a STEM career.
Respect for people is the third pillar of responsible business. It drives goodwill amongst all your business’ stakeholders, leading to motivated workforces, satisfied customers, and supportive suppliers, all of which can result in business benefits for your company.
It usually means going above and beyond your legal responsibility for employees and other stakeholders on matters such as:
- promoting a good work-life balance
- offering training and development opportunities
- protecting their health and wellbeing
- creating opportunities for a diverse workforce
- treating your suppliers fairly, for instance paying them in good time or early
- protecting your customers’ rights in terms of refunds, warranties, and their data.
Some social enterprises are dedicated to providing job opportunities to people from disadvantaged backgrounds – like this award-winning chocolate company.
Did you know that 88% of millennials say they want to work for a company whose values reflect their own? (source: Workforce of the Future, PwC)
Wherever you are on your business journey
Wherever you are on your business journey, you can take realistic and attainable steps towards being responsible that will make a huge difference to your business.
Some activities take more time and money to implement, so it’s sensible to look at the opportunity cost to your business before making any drastic changes overnight.
But in many cases, being responsible doesn’t need to take a huge amount of additional resource. The reality is that many small businesses are already doing a number of responsible activities all the time, but just don’t label them as such.
The Federation of Small Business has produced the Better Business Journey guide, which outlines lots of top tips for your business as well as inspiring case studies.