The Five Best Reasons For Being a Socially Responsible Company

We often ask our clients and partners, Why be socially responsible? The following are the five best answers (in count-down format) that we’ve heard recently.

5. Because there are always consequences. Short-sighted, profit-above-all-else-focused businesses directly and indirectly create workplace crisis, operational sloppiness and/ or environmental risks. They ignore vital leading-edge indicators that a socially-responsible company embraces. Malcolm Gray, portfolio manager at Investec Asset Management recently argued that a company that is responsible is more likely to build capital over time compared to an irresponsible company that runs the risk of taxes and levies to recoup costs. Maya Fisher-French of the Mail & Guardian makes this point nicely in her article BP disaster makes case for socially responsible investing

4. Because Consumers prefer it. If your intuition tells you that today’s socially-connected and vigilant consumers want to buy from companies that are socially responsible, you’d be right on the money. In a recent study, the Wall Street Journal found that consumers consistently favored corporations with “high ethical standards. ”In a series of experiments, consumers viewed identical products but one group was told the items had been made using and another group that low standards had been used. Results showed that consumers are not only willing to pay more for ethically produced goods – they’ll punish an unethically-made product by buying it only at a steep discount.

3. Because it’s becoming more a part of mainstream culture. If these combined blog and news trends are to be taken seriously, there is a clear and powerful growth in interest regarding socially responsible topics and business. In the last 24 months alone, buzz about such topics has increased nearly 10 times.

2. Because we’re in good company. There is a growing community of accomplished business people who are passionate about socially responsible business activity. Here are few examples:

-Corporate Responsibility Magazine: The CRO advances the profession of the Corporate Responsibility Officer.
-Sustainable Life Media: A community of sustainable business innovators and thought leaders sharing information, education and a shared purpose.
-HBR green: A Discussion about Leadership and the Environment.
-Bcorporation.net: A review body and association which proclaims “That we must be the change we seek in the world,” among other powerful values.

And the number one reason…

1. Because we believe in it. As more is written on how personal values of the corporation’s leadership extends to their decisions and, ultimately the resulting impact on the marketplace, it is becoming much more evident that the courage to lead by evolved personal values – not fashionable ideas or short-sightedness – are driving a burgeoning movement. Consider our recent review of 1000 businesses which were randomly-sampled. We found that nearly one third had some sort of socially-responsible initiative in place, primarily employee-focused. Nearly every size type of business was represented, from consulting to technology, manufacturing and financial services. From start-ups to well-established global businesses, a prevailing theme is emerging, which, on the surface appears to be driven not by profits, but by the other vital components of the 3BL.

What about you? Which answer above most resonates with you – or do you have your own reasons? What are they?