by Asha Owen-Adams, City Business Trainee in the Economic Development Office
Corporate Responsibility, CSR, Responsible business… Whatever you want to call it, these are terms that are becoming harder and harder to avoid, and so they should. There is increasing emphasis on businesses to be successful in their CSR programmes, as well as being financially successful. It seems that well-known responsible business trend setters like The Body Shop and Ben & Jerry’s are not alone in their quest for business to have “a responsibility to the community and environment”. The pressure is not only coming from the business appetite for competition but from increasingly conscious customers, who seek reassurance that the organisations they interact with are also interacting responsibly.
The term Corporate Responsibility can cover such an array of ideas including responsible procurement and SME engagement, responsible development, volunteering, diversity in the workforce and sustainability. It's not so clear- cut as it can first seem; the topic also raises questions: For instance, Can a business be considered responsible if it gives to charity, but the CEO gets a 10% pay rise whilst their workers get 2%? With the gap between executive pay for top corporates being 144 times the average Brit's, the topic is definitely up for debate. In actual fact, it can often come down to personal definition of what a responsible business is. Despite this, the current work put in place by many corporates shouldn't go unrecognised for example, BLP's employee gender split of 59.4% female and 40.6% male; Liberty Speciality Markets volunteering 27,000 hours in 2015; DWF reaching and maintaining it's 80% target for recycling, as these are all valid examples of Corporate Responsibility.
The main idea is for businesses to have a more positive impact on the community, moving away from the perception that business’ one duty is profit making. And with the apparent correlation between the loyalty a customer feels towards a business and how socially responsible it is, it seems a worthwhile investment, and it is evident that many organisations are realising its worth.
Furthermore, recent research by Business in the Community (BITC) provides evidence for the progression in corporate responsibility, as it shows that more businesses are taking responsibility by monitoring their social and global impact. 86% BITC’s Corporate Responsibility participants assess the risk of global pressures - 'megatrends' (such as population growth, social divisions and climate change) – up from 67% in 2014. The 19% increase in only 2 years demonstrates the speed at which businesses are changing their practice to become more socially responsible.
Great evidence of the growing prominence of responsible business is the phenomenon that is B Corp, a movement giving certification to member businesses (currently 1812) that meet certain social and environmental criteria, as well as standards of transparency. B Corp organisations are worth a total of $28bn, indicating that responsible business is no longer a small and isolated movement, due to its obvious financial success, rather it feels like a natural progression within business. Goldman Sachs was quoted in The B Corp Handbook reporting “more capital is now focussed on sustainable business models”, reaffirming the significance of responsible business practice.
Luckily, as well as the increasing pressure, there is also a greater level of access and information about how to get involved in CSR. The City of London’s input has programmes in place such as City Action, a volunteering brokerage, and Heart of the City (HotC), a charity and small business network which gives companies in London the tools, such as easily accessible knowledge on CSR, to improve society and demonstrate responsibility. With City Action, a programme managed by the CR Team, soon to be the Responsible Business Team, supporting businesses that do not have dedicated employee volunteering experience or resources, and HotC’s introduction of their mapping tool, which makes it easier for HotC’s members quickly detect local needs and charities they can partner with, it is really becoming harder and harder for business to claim being responsible is too challenging.
Whilst there are undeniably more steps to be taken to make corporate social responsibility the norm, not only in the City of London, but everywhere, it is important to acknowledge how much business culture has changed for the better in the past decade alone. With events in the city celebrating good CSR, Lord Mayor’s Dragon Awards and BITC’s Responsible business awards to name but a few, there is definitely enough motivation out there for maintaining good business practice.
Regarding the future of responsible business, like any other popular trend, the expectation is that it will continue to grow and develop, absorbing different businesses and encompassing broader sectors. And In short, this is down to the fact that progressively, the success of a business’ social and environmental programmes is a test on the business’ success overall.