Economy

PwC: Can business reconcile doing good with doing well?

David-Armstrong-PwC Dr. David Armstrong considers how staff and customer demand is making businesses rethink CSR.

On 13 September 1970, the New York Times quoted the economist, Milton Friedman, as claiming that “the social responsibility of business is to increase its profits.”

Some 40 years later and around 3,500 miles to the east, Brigade became Southwark’s newest restaurant – a London bistro, wine bar and cookery school, offering exclusive private dining. It wasn’t long before critical reviews propelled Brigade into one of Southwark’s ‘must dine’ eateries and Friedman’s law of responsible profitability was demonstrated yet again.

But there’s more. The entire operation at Brigade – in the previously derelict Fire Station, just yards from London Bridge – is underpinned by PwC and chef founder Simon Boyle’s Beyond Food Foundation, whose aim is to tackle homelessness in a pioneering three way partnership between the private, public and voluntary sectors (www.firestation.pwc.co.uk).

Less than two decades ago, students at the George Washington School of Business urged US companies to create corporate social responsibility (CSR) programmes as a useful marketing tool. Today, Brigade is one of a growing army of social enterprises merging the best of capitalism, community and public service by reinventing the philanthropic ideals of Andrew Carnegie for a 21st century economic reality.

Nevertheless, CSR remains an enigma. Google the phrase and you get around 4.6million hits in 0.12 seconds; ask a hundred people, and you might get as many answers. Little wonder then, that CSR remains a mystery to as many business leaders as it has become a way of life to others.

In media terms, CSR is often perceived as a business imperative. Companies embracing strong CSR values will become more popular, better supported and of course, more profitable. Those with poor CSR credentials will lose market advantage, shed popular appeal and be punished by consumers. For many observers, the conundrum of CSR is the seeming impossibility of reconciling the need to do well, with the need to do good.

But reconciled it can be, and for hundreds of companies in Northern Ireland that reconciliation is being driven as much by staff and workforce as by management and the board. Householders, used to recycling and energy and resource management in the home, now expect equally environmentally responsible behaviours from their employers. As family dynamics and working practices evolve, quality of life and work-life balance become policy challenges in the workplace.

A merging of environment and people issues creates a greater awareness of the community within which organisations operate where workers, customers and stakeholders live. Thus emerges a focus on a trio of corporate behaviours: Environment, People and Community. Combine these and real CSR policies emerge.

The experience of organisations like Business in the Community is that emerging CSR and sustainability issues drive even greater people, environment and community engagement. And that involves the organisation and staff in active interventions. These can range from setting recycling targets, reducing the corporate and personal carbon footprint to getting out into communities and making change happen.

Community intervention is perhaps the most visible of these CSR manifestations, with staff from companies throughout Northern Ireland adopting schools and charities or mentoring voluntary organisations and literacy and numeracy initiatives. Our own experience within PwC is that the more we recognise our place and responsibility as part of the wider community, the more staff want to participate in initiatives that improve community performance and outcomes.

Our Adopt a School initiative – intended, at first, to help a couple of primary schools in disadvantaged areas of Belfast – has now become a UK-wide programme, while the local initiative now embraces helping parents and the local community. Time to Read and Time to Count, also local schools initiatives, have expanded significantly, too. Not because we’ve thrown money or resources at them, but because more staff want to be part of the programme and more staff means more resources, and that means better outcomes.

The PwC social committee nominates a local charity and then invests a year working for it. Almost inevitably, the chosen charity or its cause has already touched the lives of some people within the firm. That experience reinforces the determination to make a difference and the level of engagement.

That engagement is tangible. It can be measured.

In regular internal engagement reviews, PwC staff rank how they adapt their personal working practices to reduce their impact on the environment and rank the extent to which PwC’s engagement with communities and social stakeholders is socially responsible. At our 2011 staff conference, 86% of our people said they believed they were more than just professional advisors. They knew they made an impact on their community and they wanted to celebrate and share that with colleagues. In the formal conference feedback, staff rated the CSR session the most informative session of the event.

On a purely commercial note, how organisations are perceived can determine the quality and calibre of their workforce. PwC’s recent 75-country survey, Millennials at Work, looked in detail at the so-called ‘millennial generation’ – those born between 1980 and 2000 and who are now entering the workplace for the first time – and found that reputation counts.

The Millennials at Work report concludes that despite making career compromises, a new generation of graduates wants more than ‘just a job’ from the employers they go to work for. PwC surveyed over 4,300 graduates across 75 countries and found that 72% of UK and RoI graduates had compromised career choice because of market pressures. But while recent graduates would compromise reward, sector and even location just to get a job, a potential employer’s reputation was not for sale.

The millennial graduates said that the reputation of their employers’ organisation was the second most influencing factor after the opportunity of personal development in accepting a position. That’s more important than pay, work location and the opportunity for long-term advancement.

Reputation pays and CSR works.

Even in the current economic climate, local firms and their workforces believe that CSR and sustainability are an investment. Despite the economic gloom, Business in the Community in Northern Ireland ended 2011 with its highest ever membership – 253 companies – 29 of which joined during the year (www.bitcni.org.uk).

This suggests that at least 253 businesses in Northern Ireland have no problem reconciling the need to do well with the need to do good.

pwc_master_logo_shortform Dr David Armstrong is a partner in PwC’s Research and Policy team. He is also the partner responsible for the firm’s CSR programme in Northern Ireland.

Contact him on 028 9024 5454 or david.m.armstrong@uk.pwc.com

Report sponsored by George Best Belfast City Airport

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