Business and Finance

Business models

green-globe CSR means different things for different sized business. Stephen Dineen reports.

Few if any companies will publicly state their opposition to CSR, yet academic arguments against it include the claim that a business’ job is to make money not re-distribute it. Governments’ role is to regulate, say some; corporations shouldn’t be responsible for the ethics of others on the supply chain.

As Tim Ambler of the Adam Smith Institute blogged in light of Davos debates on capitalism: “It’s actually quite simple: make money and do not be distracted by corporate responsibility. Making money makes everything else possible. The alternative is that we continue to decline.”

Yet CSR has burgeoned among corporations and SMEs. Whether it’s the company that manufactures crisps outlining how it has reduced its process’ carbon footprint, the retail chain selling fair trade goods or the local bakery giving money to a sports club, CSR is commonplace.

Among large corporations, ethical product branding is an example of the new approach. The rise of environmentalism, and consumer concern with related problems like climate change, has revolutionised branding. Ethical consumerism needs to be satisfied so information on a product’s carbon footprint or whether it was tested on animals is provided. Many large businesses proclaim themselves both sustainable procurers and providers of environmental solutions such as low-carbon technologies.

Educational philanthropy is often channelled into funding of and co-operation with universities. Businesses provide work and training opportunities for students, for example. Students gain experience. Businesses have a more skilled recruitment pool in the future.

For large businesses, however, forging close links with local communities can be difficult. During a panel debate at CBI’s annual conference last year, Director-General John Cridland said: “There is a danger that globalised businesses become disconnected from their communities and we have a responsibility to tackle these problems at source,” adding, “I’m not sure business structures are currently in place to help.”

Small businesses’ experience of CSR differs. “CSR activities are all too often seen as something that ‘only big businesses do’, or can afford to do,” Federation of Small Businesses (FSB) Policy Chairman Wilfred Mitchell told agendaNi. “We only have to open a newspaper or turn on the television and we are bombarded with images and sound bites from large multi-national companies reminding us of just how much they contribute to local ventures and international charities.”

Mitchell says most of the federation’s members are actively involved with their local communities. In December 2010, the FSB surveyed its members and found that two-thirds were engaged in some form of CSR, with a third donating goods or services to local charities and organisations. Three in ten were making charitable donations from company profits.

An example of CSR, says Mitchell, is “the plethora of volunteers” involved in amateur sporting clubs across Northern Ireland. He was awarded an OBE in 1996 for services to agriculture and the community.

Much of small business’ efforts are unnoticed, he claims, because “many small firms don’t have the additional resources or promotional facilities to highlight their commitments,” but he believes members’ CSR is demonstrated for “the purpose in itself” and is “part of their daily lives.”

In light of the global financial crisis, CSR’s focus may well be shifting to corporate governance and winning public confidence. In his keynote address at the annual conference, Cridland referred to a spectrum of people from those in the Occupy Wall Street movement to those watching in their sitting rooms with sympathy for the protestors’ views: “At its worst, the impression of business is one of greed or selfish indulgence. Some people feel wronged.” His speech’s theme was trust.

Report sponsored by George Best Belfast City Airport

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