Why CSR Should be “Business as Usual” for SME’s?

The purpose of our blog & newsletter is not just to give our readers news about Green Den but also to educate and inform. One of the often neglected aspect of CSR is the impact it can have on small or medium sized enterprises (SMEs). The four pillars of CSR are responsibilities in the workplace, marketplace, community and environment; SMEs play a pivotal role in all four avenues. 90% of the world’s business comes from SMEs and they employ about 50% of the world’s population. The kind of change they are capable of is community-based, continued investment to uplift their key stakeholders. This is something that CSR models based on big companies can never hope to achieve. Change at the grass-root level is what every ethical business dreams of and this is where small enterprises stand to gain enormously.


Diverting away from the kitschy big-business idea of CSR, small business have the advantage of direct interaction with the community from out of which they operate. What they need to be convinced about is whether or not it makes business sense for them to be ‘socially responsible’. The answer is a resounding yes!


First of all it must be stressed that CSR is not just policy, it is a principle of doing business. It is not something that is done as an add-on, it is something that is incorporated into your way of doing business. In this scenario, it offers businesses many benefits in terms of better shareholder relationships and also acts as a powerful tool for word-of-mouth advertising.It offers SMEs added benefits in terms of strengthening their relationship within the community and acting as an example to make people’s lives better. The most important reason why small companies should engage in CSR activities is to improve their export markets. Acting as a part of the supply chain means that export products to a big company needs to meet certain standards all along the chain. This is the single more important competitive benefit that SMEs have by incorporating CSR into their business. It is especially important for small businesses in emerging economies supplying to companies with multiple supply chains.Secondly, mainstreaming CSR into any business is a challenge. By incorporating the principles of CSR in the early stages of growth, SMEs have another advantage over companies that have already reached a certain size. Forming principles, processes and structures becomes easier along with reporting and policy writing. Developing a culture of sustainability within the organization becomes more streamlined and employees know what it means to be sustainable.

Finally, it makes business sense. This is something that the larger companies are beginning to understand. When the small companies jump on this idea, the limits to green business has no bounds. In fact, the term might just become obsolete along with the term ‘business as usual’ because every business will be ethical, sustainable and profitable. This is a dream worth working towards…

Advertisements

Why CSR is Greater than the Sum of its Parts?

Combining the three parts of social equity, environmental responsibility and corporate profit, Corporate Social Responsibility (CSR) is an important concept in today’s business climate. These CSR elements are also known by the catchy phrases “people, planet, profit” or “triple bottom line.” Auditing these components and creating an integrated plan to improve and capitalize on them, brings tremendous marketplace gains for a business. Not only are these three pieces of the CSR puzzle inseparable, but with positive feedback mechanisms, they also create a sum benefit much greater than any one of the parts.

People

If customers and employees are treated as important partners in a mutually beneficial business relationship, business profitability becomes much more sustainable over the long-term. Healthy, satisfied customers are loyal customers that will continue to return to the business. A safe, healthy and environmentally friendly workplace for employees causes them to take fewer sick days and stay with the company longer, allowing fewer work delays and decreasing turnover and training costs. By organizing and participating in social charity work, a business enhances name recognition, positive reputation and essential public relations value.

Planet

Corporate environmental sensitivity ensures the health and safety of customers, employees and a sustainable supply of natural resources. For example, reducing toxins and petrochemicals may not only lower manufacturing costs but also reduce risk management and employee insurance costs. Increasing efficiency in terms of water, energy and material use directly impacts the environmental footprint of a business, which alone has great marketing value, but also allows for a reliable supply of resources or expanded operations based on the same resource flow. Ecological restoration projects can have significant marketable offset value and can sometimes even provide ecosystem services to business operations.

Profit

Ensuring social equity and environmental integrity impact present bottom line profits and maintain longevity of profits. Efficiency measures, resource use reduction, employee health and safety and CSR marketing initiatives can reduce costs and improve brand value. Long-term business stability is sustained by preserving customer and supply chain viability through natural resource protection, customer loyalty and positive brand management opportunities. In turn, a more profitable business is able to spend more capital on social and environmental programs, which cycles back into profitability.

The inseparable nature of CSR components creates positive and integrated feedback mechanisms that sustain global business, environment and society. A systemized approach to people, planet and profit is one of the most important tools that a business can use to succeed today.

The Cost of Un-Sustainability!

Does being green and sustainable always cost more?

There is a common misconception among many corporations, businesses and even consumers that being environmentally responsible always costs more. This could not be farther from the truth. There are instances when greener products or practices may cost more but businesses that incorporate social and environment safeguards actually improve efficiency, reduce waste and increase profits margins. Consumers who practice green living live more fulfilled and healthy lives. While supporting a sustainable environment, they are also ensuring they have a product or service to sell or enjoy tomorrow.

What’s closer to the truth is that being insensitive to the environment and social good will cost businesses heavily in the long run. Per the goodpurpose study, while choosing between two brands of equal quality and price, consumers worldwide value social purpose as the deciding factor over design, innovation and brand loyalty. We can safely say that without social and environmental responsibility, there is no long run!

Earth Day Message From the Trenches

This post originally appeared on Akhila’s blog.
As you know these days I have been busy with my new venture. We finally have a website up and running and you can check this out – would love to hear your thoughts.
I have re-emerged for this blog post on Earth Day as it seemed fitting to break my silence today. The Green Den has received overwhelmingly positive responses from the CSR community and I’ve been totally blown away.
We are now of course actively seeking clients, networking and getting our name out there. It’s been exciting so far but the real work starts now. We also have our blog up and running which you can check out here. While you’re at it, you can also sign up for our bi-monthly newsletter.
Last year in my Earth Day post I said that I wanted to make an expedition to a rainforest and grow my own organic vegetables. Happy to report that I have achieved one of those goals. My organic garden with its own compost is happy and thriving. I even got a bumper crop of tomatoes a couple weeks ago. I plan on adding more vegetables over the next month. The expedition is still in the works!
What has really changed in this year? On the onset, perhaps not much. The BP disaster has left many people still reeling – a year from that and the US congress still wants to push for offshore drilling. No real progress has been made in climate talks, new laws etc. In India, the environment ministry is finally waking up to the fact that there is an environment to protect. There was also a report of increasing tiger numbers but unfortunately, there were also stories of elephants encroaching on farm lands. Or is it the other way around?
There are many environmental challenges that are still solve and still many others to even acknowledge. One of the biggest new developments in India is the acknowledgment that corruption is so wide spread. Recent scandals have rocked businesses and made investing in Indian business a high-risk venture. This scenario needs to change because without a stable economy, we cannot talk about environmental protection and social progress. This year I have no goals, except to work really hard on GDC. I’m all geared up to change ‘business as usual’ because I believe the time has finally come to think about things differently.
We cannot solve problems by using the same kind of thinking we used when we created them
– Albert Einstein

Companies Can Save The World!

This post by Juan Villamayor originally appeared on his blog – A Touch of Green

The first goal of the United Nations Millennium Development program is to end poverty and hunger. This sounds like something that governments andNGOs are doing already (or should be doing). However, companies and citizens have an important role to play here too. In fact, businesses have tools to reach this goal in an efficient way, mainly through actions along their supply chain.

Both multinational corporations (MNC) and many small and medium entreprises (SMEs) are based in developing countries, or work with suppliers from these countries. What they do and how they do it has a tremendous impact on the lives of many people. Transforming their impact into something positive is not complex. Here are some simple ways how a company can contribute to end poverty and improve living conditions in developing countries:

  • MNC are often on the spotlight due to children labor controversy. Their responsibility is very high since they are also accountable for what their suppliers are doing. With suppliers mainly in India, Turkey and Bangladesh, the clothing retailer H&M knows this very well. This company has launched a program with UNICEF in order to protect the rights of children in cotton producing areas in southern India. Maybe that’s not enough, but it’s a step in the right direction.
  • Very often women are the ones who suffer most the consequences of poverty and exclusion, and most of the time it is due to discrimination and the lack of school education. NIKE supports “girl effect”, a program addressed to adolescent girls in developing countries aimed at improving their lives and giving them a chance for a better future. As NIKE states, “for girls in developing countries, the effects of poverty and lack of resources can often be seen through early marriage, childbirth and increased HIV infection rates. Such setbacks for women also impact their communities.”
  • Let’s take Coca-Cola. Reducing their water consumption is not only a question of sustainability but also a question of cost reduction. However, they are also aware of the fact that access to clean water is a big problem for many people. This problem affects health and complicates the lives of millions of Africans (mainly women), who have to go very long distances to get water for their daily consumption. Coca-Cola Company supports a project in Kenya to provide safe water to primary schools in Western Kenya.

These are examples of how companies can save the world and help eradicate poverty. Us, citizens and small businesses can do it too at our scale. Examples will follow soon.

You can save the world!


What have I learnt from my GRI training?

Juan Villamayor, our core consultant shares his views on the GRI training he attended in Barcelona.

This week I have attended a training on the Global Reporting Initiative (GRI) in Barcelona. The GRI is the most extended standard for sustainability reporting. Although I still need to study and go deeper in this issue, my first conclusions are the following:

What have I learnt from my GRI training?.