In Western countries, the investor community has long expected that companies in which they invest act responsibly and integrate “CSR” policies into their business models. Implementing ideas when industry competitors are only starting to consider them is a beautiful way to differentiate yourself from the competition and attract investors, consumers, and skilled employees. Those who wait until the last minute risk falling far behind.
Corporate social responsibility is not unique and has progressed in recent years. Companies were formerly limited to participating in charity activities for the benefit of society and thought that this was adequate. Today, we have a much broader understanding of this concept. In terms of practicality, where do you begin? The ideal place to start is to identify the organization’s significant stakeholders (those who are interested in the outcomes of its actions, such as customers, employees, shareholders, suppliers, business owners, and the local community) and then consider their basic needs. What is most important to your firm (apart from profit), and what makes it distinctive, given the location?
It makes no distinction whether we are talking about a tiny or medium-sized business or a giant corporation; you can always start doing something, and there are many ways to accomplish so. Take the attitude toward employees, for example. Primarily, you may aid in the improvement of the health and well-being of your employees by offering them more flexible working conditions and a more appealing work-life balance. According to last year’s research by the International Federation of Accountants (IFAC), the youngest generation, Z, prioritizes stable career development over income levels when choosing a workplace. Salary and bonuses are in second place, but the perfect balance of work and personal life is right behind them, in the top three crucial variables.
There are also many other options for improving working conditions in the company, such as providing different opportunities for people with various needs, providing training or internships for those who are just starting in their careers, and preventing gender or national discrimination in determining remuneration and career advancement. The ladder boosts employees’ knowledge of corporate social responsibility and studies how employees perceive it.
On a local level, you can participate in local community projects (for example, Subotnick), donate your premises for public use if not already in use, and encourage staff to do the same.
Finally, environmental protection is an essential topic that is particularly vital to manufacturing companies. Companies can reduce pollution by recycling waste, eliminating plastics from their products, being more selective with their suppliers, increasing their use of public transportation or corporate fleet sharing where conditions allow, regularly cleaning up waste in the surrounding area, or participating in landscaping projects.
What are the commercial advantages of this strategy? American economist and entrepreneur John Elkington introduced the Triple Bottom Line (TBL) concept in 1994. When developing a business model, company managers, and individual entrepreneurs must consider the financial side of the equation and the social and environmental factors. According to Elkington, profit, people, and the environment are any firm’s “three pillars” or “pillars of sustainable growth.”
Critics point out the practical problems of implementing the notion, particularly when integrating it into the accounting system: environmental costs are difficult to quantify. For example, the long-term implications of dumping toxic waste are only quantitatively apparent. If this is the case, managers will react unfavorably to adding them to the calculation in the short term. The issue is further compounded by the absence of universal mandatory standards, even though international organizations (such as the GRI group) have already created several voluntary guidelines.
Monitoring is an arduous task for beginners. It will be crucial to consider what indicators will be used to monitor the effectiveness of corporate social responsibility strategy execution.
Today, everyone can see that investors, employees, and clients will not become less demanding over time; the reverse is true. A corporate social responsibility policy should be imposed “from above,” starting with the board of directors and spreading to all levels of the organization, rather than being reduced to a mere allegation on a corporate website. People are unlikely to be duped, and the negative consequences of discovering that all the statements were false can be highly damaging.
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