Business growth figures released for last year and the forthcoming year look encouraging. The Office for National Statistics shows that the UK economy grew by 1.9% in 2013 – its strongest rate since 2007 – and the Office for Budget Responsibility is currently forecasting growth of 2.4% for 2014. As a result, many businesses are beginning to think about growth in order to take advantage of the rising economy, and they are faced with a choice between growth through quick wins, and long-term responsible and sustainable growth.
Playing the long game
At first glance, the solution appears simple: fast growth to make the most of the growing market. However, when you’re coming out of a recession it’s often dangerous to grow quickly: more businesses cease trading coming out of a recession than going in. Taking a step back, reassessing your targets and changing to a more sustainable and CSR-enlightened growth plan could have multiple benefits for your business.
A recent research paper entitled Are CSR Disclosures Value Relevant? Cross-Country Evidence looked at data from KPMG for businesses worldwide, and found a positive correlation between social responsibility initiatives and a firm’s value. Businesses that reported CSR activities recorded stronger financial performances and appeared in market-leading positions, whereas those that neglected CSR had an increased risk of significant negative financial consequences.
However, CSR doesn’t just help profits; it can also improve your standing in the community. The 2020 Workplace Survey* showed that 80% of young people wanted to work for a company that cares about how it impacts on, and contributes to, society.
Additionally, as you will read in the companion pieces on CSR this month, businesses that produce an ethical and sustainable product will also widen their potential target market. Julia Gash, Managing Director of ethical bag business BIDBI, found that almost half her target market of customers and blue-chip businesses wouldn’t have bought her product if they hadn’t been able to see BIDBI’s ethical and sustainable credentials.
Santander and CSR
Despite the benefits to the bottom line and a business’ local standing, long-term sustainable growth can present challenges. Finding suppliers that share your views can be time-consuming, and it can be difficult to find the finance to fund such a growth plan. Many of the businesses I talk to have been told by other financial institutions that they can’t lend to them, as they are only interested in their next results and not in long-term growth.
CSR is part of Santander’s agenda. We promote initiatives and projects that aim to contribute to the economic and sustainable growth and development of the communities in which we operate. The Santander Foundation has contributed more than £28 million to charity organisations in the UK. It also carries out training and skills programmes, as well as measures to enhance the financial education of society in general. Our CSR work is also proactive. We’re currently working closely with customers who have been affected by flooding by offering mortgage repayment holidays, and extended loan agreements for small businesses and farmers. We are also in the process of establishing a fund for community projects in flood-affected areas.
Our commitment to CSR also helps to encourage the businesses we work with to be more socially responsible. We offer plenty of help to businesses through our CSR division and our Breakthrough programme, which was last year recognised with a Responsible Business Award from the government’s Business in the Community initiative. Our partnership with Trading for Good offers further CSR support for SMEs, and we now offer small businesses a free profile page to showcase the contribution they make to their community. Launching on 1 May, our sponsored SME Hub will highlight businesses that are being socially responsible, and include further information for SMEs keen to adopt CSR within their business frameworks.
Santander works hard to stay local, with relationship directors based in regional Corporate Business Centres across the UK providing in-depth local knowledge and insight. One of our guiding principles is to always listen to our customers, as we know this is the best way to help businesses achieve their ambitions.
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