How To Grow Responsibly

Taking a responsible stance on the environment, trading ethically and recruiting soundly all makes sound business sense

To some people’s way of thinking, businesses are good citizens by virtue of their very existence: they employ people, pay taxes, and provide goods and services for customers. However, these days we ask more of our business owners. CSR (Corporate Social Responsibility) is no longer the preserve of a few large corporations and extends far beyond pro bono work or charitable giving. Today, society expects companies large and small to prove they operate responsibly and play a positive role within their community. Robert Tate, Development Director at the charity Business in the Community (BITC), believes that all businesses are capable of embedding this ethos into their strategy. What’s more, commercial success can go hand-in-hand with ethical behaviour. “Being a responsible business is all about the decision-making,” he says. “How you make money, how you recruit, procure goods or reinvest in the community. Many small and fast-growth businesses are founder-led by people who are passionate about what they do, so they are committed to ensuring their company is a success on every level.”

Responsible businesses are highly valued by employees as great places in which to work. Customers and suppliers appreciate them as reliable businesses, while the community values them and considers them good neighbours. In 1986 entrepreneur Wade Lyn set up Cleone Foods, a small business that manufactures traditional Jamaican food and puts Jamaican family values at its core. The business has won plaudits for its community focus, providing literacy, numeracy and IT training for staff, offering interest-free loans and flexible working, sourcing from local suppliers and running open days for local schools. In 2012 Cleone Foods won a BITC Santander Responsible Business of the Year award.

Key benefits

Cleone Foods has clearly benefitted from its strong sense of CSR. The company enjoys a 95% staff retention rate, and saw a 7% increase in sales following founder Wade Lyn’s nomination as BITC Prince Charles Ambassador for the West Midlands. “Good staff retention levels are often cited as a key benefit of having a strong CSR ethos in business,” says Matt Gitsham, Director of the Ashridge Centre for Business and Sustainability. “Allowing staff time to engage in community projects, for instance, reaps measurable benefits in levels of employee engagement.” He adds, “Other businesses go further and take a creative look at new opportunities and business models.”

Businesses that stand for something positive may also find they have a competitive advantage when it comes to winning a place in the supply chain of a larger concern. Oxford-based printing company Seacourt, for example, is recognised as a world leader in waste-free and waterless printing and wins business on that basis. “That’s where CSR really fits with the smaller business – the way they integrate into the supply chain of bigger businesses,” says Matt.

Can CSR create growth? 

“If sound CSR principles are embedded within a business then the effects will be evident everywhere,” says BITC’s Robert Tate. “Whether it’s seeking to recruit and source products locally, paying suppliers on time or running community programmes. And it can undoubtedly be a spur for growth.” Maloney’s Retail Stores – a Budgens franchise and a past winner of BITC’s Responsible Small Business of the Year – introduced a local engagement strategy and saw its sales increase by 10% per annum. Not only that, the business gained recognition from its local political community.

Some may question the value of CSR in challenging economic times. However, as well as the potential for competitive advantage, there can be cost savings from taking an environmentally sound approach to energy consumption and waste. “If you waste as little as possible chances are you will save money,” says Robert.

Cost-reduction, improved staff retention rates, increased sales and local recognition are all within reach and can become not only the distinguishing marks of a responsible business, but also metrics for measuring CSR. Winning new business by meeting a large organisation’s requirement to work with an environmentally focused outfit makes a watertight business case for CSR. And, in a competitive market for talented individuals, putting your CSR credentials front and centre makes sense; candidates want to work for companies with values to which they can relate.

Overcoming barriers 

To some, the main barrier to creating a business with sound CSR principles will be knowledge of how to implement those principles. “If you are a start-up, it is easier to set up a business with a vision and a sense of purpose around community, environmental or other socially-responsible values,” says Matt. “It then informs your decision-making as you grow. However, a lot of bigger organisations have successfully adopted CSR, so it can be done.”

Business owners should also be realistic about their timeframe. Things like purchasing decisions may be easy to change but fully embedding CSR values will take time. “Thinking around specialist staff varies,” says Matt, who believes that employees should take some individual responsibility for CSR. “Don’t be tempted to think a specialist team is all you need. You want everyone in the culture making well-founded decisions.”

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John Carroll - Helping businesses achieve International success. Head of Product Management & International Business, Santander UK