That term seems pretty self-explanatory – a company that acts responsibly. But what does that actually mean? The word responsibility and how it applies to a business means different things to different people.
Despite the lack of consensus on what corporate responsibility means in 2016 – one thing most of us would agree on is that the traditional days of charitable corporate responsibility (CR) are quickly coming to an end. Corporate responsibility is no longer done through a siloed department, detached from the strategy and operations of a business; a small team that organizes staff volunteer days and fundraising activities to support local charities; or a diversity committee that meets quarterly to plan ‘cultural’ events.
We are moving into an era that holds companies to a higher standard of ethics and transparency. The good news is that if done right – this shift can actually greatly benefit your business (and the planet).
For many, corporate responsibility is becoming a practice that integrates social, environmental and governance responsibility across all functions of the business. This approach is gaining momentum for good reason - a report published in 2013 by MIT Sloan Management Review and The Boston Consulting Group shows 59% of businesses that integrated sustainability across three or four business elements saw an increase in profits.
Making the decision to move towards a more integrated corporate responsibility approach is, well awesome, but it can also be overwhelming. One Google search and you can see there is no end of resources available. The unfortunate truth is that there is no one magic formula.
There are different schools of thought and frameworks available to support companies in their quest to become more responsible, including: B Corporation, Shared Value Corporation, Triple Bottom Line, Creative Capitalism, Natural Capitalism, and Conscious Capitalism.
While each of these offer valuable frameworks and tools for becoming a more responsible company – their use alone may not provide all of the potential benefits of a CR program.
Becoming a truly responsible company means designing good from the inside out – engaging in a transformative approach of corporate responsibility. It means incorporating values that promote sustainable, humane and ethical practices into the company’s mission, culture and operations.
Here are five ways your company can integrate transformative good, no matter what framework you are using:
1. Set a Compass. Value-based leadership is key to transformative good. Identify the values that reflect the positive change your business wants to create and make these values a part of the culture of your business.
2. Be Inclusive. By involving all members of the organization (board, management, administration) in the process of integrating corporate responsibility across the business, you are equipping your team with knowledge, skills and ownership to make the day-to-day decisions that will contribute to the performance of your CR program and generate new innovations to improve your CR program.
3. Incorporate into your Management Practices. Hold staff to account for the performance of your CR program by integrating CR metrics into your performance reviews. Create incentives and rewards for staff who bring fresh ideas to the table for improved CR performance.
4. Be Reflective and Adapt. Sometimes the good we are trying to do can either have unintended negative consequences or we can find out it is not actually achieving the intended outcome. It is important to think critically about our impacts and be willing to re-adjust when measurement shows we could be on the wrong track.
5. Participate in the System. Our planet is an integrated and closed system and your business is a part of it. Understand the impacts of your business on our world systems and the people living in it. Engage meaningfully with organizations addressing issues related to your business operations and your corporate responsibility work. For example, if your company uses a lot of technology, do you know how the minerals are being sourced for your hardware and what happens to your electronic waste? Are your production processes as environmental and humane as they can be? Are there organizations working on the social and environmental issues related to your company’s activities with whom you could collaborate?
When a company chooses not the quick fix but a participatory and process-oriented approach to designing ethical and good practices, the results can be transformative for the staff, the business and our planet. According to a 2015 study conducted by IO Sustainability and Babson Social Innovation Lab, “…companies that commit to CR approaches that genuinely and authentically aim to optimize their impact and generate positive benefits for society, stand the best chance of delivering financial and business value.”