Is small beautiful for CSR?

While the big boys are busy deflecting shouts of 'green-wash' and suggestions that their efforts to embrace CSR are insincere, that family firm down the road is winning accolades and nods of approval for doing its bit for the environment and community.

Paradoxically a concept seemingly invented to protect the share price of the mega-corporations from bad PR might have more to offer small businesses in the long run. Sam Bond reports.

“Quite frankly small firms don’t have the time or resources to produce glossy 20-page CSR brochures and in a way that means the outside world tends to be less cynical about what they are doing,” David Bishop, a spokesman for the Federation of Small Businesses told edie.

“They don’t shout about it.”

He said the term CSR was off-putting to the majority of small business owners, who would likely dismiss it as ‘management speak’ with little relevance to the day-to-day running of their business.

But despite this, hundreds of thousands of smaller outfits are happily applying the principles of CSR by default.

“Many businesses are involved in environmental practices or things which benefit their communities,” he said.

“In practice they would be considered responsible and ethical but aren’t aware that these activities fall under the umbrella of CSR.

“They probably have a CSR strategy even if they don’t realise it.”

He told edie that the main incentive for SMEs was still likely to be the bottom line, but there was a growing, and genuine, interest in doing the right thing.

“There is little practical advice out there but people do want to run a responsible business,” he said.

“What we try to do as an organisation is provide that advice and get business owners to speak to other business owners about how they have introduced elements of CSR into their operations.

“When it comes from their peer group and they have concrete examples and case studies, it tends to carry more weight.

“If they hear how looking at energy use or recycling waste has not only been the responsible thing to do, but saved money as well, that is when these things are most likely to be applied.”

He said that small businesses had always been tied to their communities, whether it be by offering work experience to local school pupils or going the extra mile to be a good employer.

And now environmental awareness was on the rise, many wanted to do their bit to help save the planet too.

But he said most small businesses overlooked the fact CSR could be used as a valuable marketing tool which would enhance their standing in the community.

“The message I would want to get across is that this is something that could boost your reputation and credibility within your community and the local market,” he said.

“Responsible business does make better business sense.”

Mr Bishop was not without his fears about the impact of CSR on the federation’s members, however, expressing concerns that smaller firms were being affected by big business looking for quick brownie points.

“Large business don’t want any skeletons in their closet, which is fair enough, but they are often simply pushing their need to consider CSR onto their suppliers, and that’s something that can only increase.

“That’s something we have reservations about at the moment, as they are taking the easy route to CSR by putting the responsibility on someone else rather than address concerns themselves.”

The possibilities CSR has to offer SMEs has not been overlooked in the corridors of power.

In June the EU organised a conference, bringing together businesses that had benefited from adopting the principles of CSR and highlighting case studies.

Among those receiving accolades were a small cleaning company from Lyon which had enhanced productivity and employees’ self-respect by offering free literacy lessons and a syndicate of Maltese hotels which had helped preserve the islands main attraction – its environment – by deciding from the outset they would try to be as sustainable as possible and minimize their footprint.

Commission Vice-President Günter Verheugen echoed Mr Bishop’s stance.

“Many SMEs actively address social and environmental concerns without communicating what they do to their clients and communities,” he said. “Situating their action in the context of CSR will leverage their responsible behaviour into business advantage.”

“There are many examples already of socially responsible enterprises generating sustainable development, but Europe needs more entrepreneurs travelling down this road to success.”

“This is how CSR will contribute to the broader EU policy objective of enhancing economic competitiveness and achieving more growth and better jobs.”

In his speech at the conference he told delegates: “Corporate Social Responsibility matters. It matters to individual companies, for whom it can be part of a formula for long-term commercial success.”

“It matters to those who work in and for companies, for whom it can help to create a more rewarding and inspiring working environment.”

“It matters to those who buy from companies, to consumers, who are ever more attentive to the social and environmental credentials of the products they buy.”

“It matters to the local communities where companies operate, who want to know that they are living amongst organisations that share their values and concerns.”

He added that, within the EU, CSR could help member states meet the targets for the Growth and Jobs strategy as it has the potential to help companies to become more competitive.

“But over and above that, CSR is also part of the glue that binds the Growth and Jobs Strategy into our overall objective of sustainable development,” he said.

“CSR matters not just because it makes business sense, but also because it reflects the kind of society in which we wish to live in.”

“After the end of the Cold War it is even more important that business is strongly committed to its social responsibility, locally, regionally, on a national, European and global scale.”

“We have committed ourselves to create a business friendly environment in which entrepreneurs and enterprises can flourish and grow.”

“But I don’t want to sound too romantic about this. There is clearly more awareness-raising and more persuading to be done. For every SME willing to talk about CSR we heard others who asked about the cost and the time involved, or expressed concern about the jargon and the apparent complexity of the concept.”

“There is evidently still much work to be done to further encourage, particularly SMEs, to do more what is called CSR.”

He said the EU would be teaming up with business organisations to launch a campaign to promote CSR among SMEs, and companies would be invited to bid for funding to implement their strategies.

“It is part of a longer process of creating mutual understanding and mutual respect and even true partnership,” he said.

“The fact that the Commission and SME representative organisations have been able to work together constructively on this campaign suggests that a reasonable degree of common understanding has already been reached on which future close work can constructively build on.”

“Indeed, this campaign should not be regarded as the end point of a process, there is a need to build on the momentum that this campaign has generated.”

Commissioner Verheugen set out a series of challenges to SMEs.

“Firstly, I wish to invite SMEs to follow the road of CSR,” he said. “I don’t pretend it is easy, nor do I want to minimize the difficulties, but I do believe that almost any company can start with simple and practical steps.”

“For modern entrepreneurs, I think CSR should and will increasingly be seen not only as a short term cost, but as a long term opportunity.”

“Secondly, I appeal to associations and organisations that represent SMEs: to continue to articulate SMEs’ concerns and views on CSR, as I am sure you will do, and also to help promoting CSR amongst SMEs in appropriate terms and in a way that better accords with the day-to-day realities they face.”

“Thirdly, a challenge to what we might broadly call the ‘CSR movement’, by which I mean those organisations that exist primarily to promote CSR.”

“I invite the CSR movement to pay more attention to SMEs, to give more value to what SMEs already do in this field and to better understand the constraints they face.”

“We must pay more attention to small businesses and their CSR commitment, not least because the implementation of their commitments will be very local, very close to citizens, given the nature of many SMEs.”

He also asked larger companies to play a nurturing role, not a domineering one, in helping their smaller partners down the CSR path.

“I invite larger companies to do more to support CSR efforts of SMEs, especially through the supply chain, however to keep in mind that some enterprises might find it unbearable to adjust from one day to the other,” he said.

“We have very good examples where larger companies work very constructively with their SME suppliers on CSR issues, coaching them instead of following a take-it-or-leave-it approach. This is the way towards success.”

“I also encourage large companies to take time to appreciate the existing CSR practices of small businesses, to value their contribution to the communities in which they operate, and to work in partnership with SMEs to develop mutually beneficial approaches to CSR.”

By Sam Bond. Edie News.

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