Climate change is now something that the vast majority of us have come to terms with, so business should be more responsible about the way its operations impact the environment
Firstly, it is essential for any type of business whether State or private to generally understand the commercial (and morale) case for corporate social responsibility. The business case as we all know is very strong.
Consumers want to buy from, and people want to work for, companies that are socially and ethically responsible to society. Firms are often under pressure to deliver results in the short term, for example, delivering fab quarterly performance to keep shareholders and the market happy.
However, when it comes to corporate social responsibility, business needs to take a medium and long-term view. It is very clear after the global financial crisis that many business analysts had concerns that corporate social responsibility had only become a smokescreen for corporate greed. This is perhaps based on some of the scandals in the United States and even with some of the failed companies in Sri Lanka.
This is why it is imperative that any commercial enterprise operating in the commercial space understands the business case for corporate social responsibility and the need to be responsible for its activities and impact in their space.
This would therefore mean that, corporate social responsibility needs to be built into the strategy and culture of the organisation. Ultimately corporate social responsibility is about the bottom line and companies that do not see and make that connection could end up misallocating scare resources of the firm.
If a firm wants to attract and retain the best talent, if the firm want more and more customers to buy their products and services, and if they want to attract more ethical investors, then a company must be serious about corporate social responsibility.
All about culture
Therefore, corporate social responsibility cannot be a short-term objective. It’s all about culture (the specific collection of values and norms that are shared by people and groups in an organisation and the way they interact with each other and with people outside the organisation).
When we look at what’s gone wrong in some of the big scandals, the tone and culture at the top were often horribly wrong. A culture that understands integrity and responsibility towards its employees, consumers and communities is very essential.
When companies embrace responsibility for their actions and encourage a positive impact through its activities on the environment, consumers, employees, communities and all other members in the public space, it is the shareholders who stand to benefits over the medium long term by way of better returns.
This also includes sustainable business practices with regards to the environment and they way they engage with the community to preserve/protect the environment. We have seen some of the adverse impacts this can have in altering/challenging the nature’s own defences (as in the case with the BP oil spill).
Climate change is now something that the vast majority of us have come to terms with, so business should be more responsible about the way its operations impact the environment.
The consequences – as we’ve seen of not doing so – can and will be catastrophic for all companies operating around the world. Therefore, in the final analysis, the business case for CSR emphasises the benefits for better returns, to reputation, staff and consumer loyalty plus maintaining public goodwill.