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…
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.
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.
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.
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.
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!
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!
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: