Corporate Social Responsibility – No Longer Optional

Julian Smith | November 2019 | Editorial

Corporate social responsibility (CSR) refers to the efforts made by a company to improve society and contribute towards sustainable development and ongoing operations. Also known as corporate conscience or (good) corporate citizenship, CSR describes initiatives run by a business to evaluate and take responsibility for their impact on issues ranging from human rights and workers’ welfare to the environment. CSR can often result in short-term costs which do not lead to immediate economic gain for the company. Instead, it supports and prioritizes social and environmental progress.

Corporate social responsibility is a self-regulatory business plan, with initiatives focusing on achieving economic, social and environmental benefits for all stakeholders involved (employees, consumers, investors and, most recently, global focus on the future of humanity itself). This is business that goes beyond what is deemed compulsory by law and ethical standards.

Sustainability is usually associated with environmental sustainability. However, sustainability can also apply to many other aspects of a business including procurement, economics, and hiring and investing in the company’s most important asset, the workforce.

There is a change of mindset emerging with millennials and Generation Z that directly conflicts withmany historic corporate goals. Business needs to adapt quickly because these are the people that will soon be leading suppliers and competitors, that will hold the balance of political power, and also control the purse strings that will define business success or failure going forward. Take a look at Greta Thunberg for a glimpse into the mindset of the younger generation and future customers.

Capitalism over the course of the last two centuries, but more specifically of the past 70 years has on balance been a force for good, creating a large global ‘middle class,’ dragging billions out of poverty and subsistence living. However, this has also been a double-edged sword. It has created the ‘comfortable’ conditions that have led to massive growth in the population and as a result led to unsustainable development and exploitation of natural resources.

This in turn has led to the now undeniable climactic changes that are taking place and that will change the lives of a significant proportion of the global population over the coming decades. Whatever some of the less motivated political forces at work currently may wish or believe, change is coming and those that cannot and do not adapt on a political and corporate level will not survive.

However loudly the media and climate activists may shout, the change will not be a tectonic shift (initially), but a gradual change in mindset and transition of corporate priorities. Everyone wants to do something to help, but people are not going to significantly change their way of life and the way of doing business overnight.

Environmental sustainability is an area where every individual can start making a difference immediately. It is about reducing, re-using, recycling and, most importantly, resetting personal and corporate philosophy to question how we can more efficiently utilize the resources available to us. How do we reduce waste, recycle rather than scrap, and extend the longevity of our assets if they can meet the business needs?

These are questions that only you as an individual can answer. However, there are solutions to the above with a burgeoning ‘sustainability’ industry developing to help with these problems. Also, there will be significant focus on how and whether your business is solving the issues? CSR is not only the right thing to do, it is also a tool to develop the business and, most importantly, going forward it is not optional. It will very likely be the yardstick by which your business is measured!

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