CSR is not just for the big boys, writes Rachel Lyons: SMEs can benefit from social engagement and maximise on the many opportunities it presents.
It seems the perception in the SME sector tends to be that corporate social responsibility (CSR) activity tends to be for larger businesses, their own focus being on the bottom line with no time or resources to spend on CSR.
However, by looking behind the scenes at the activities that many SMEs – either as a business entity or individual business owner – are involved in, it becomes clear that CSR is very much in evidence and provides many opportunities for businesses big and small.
Do you do anything as an individual or business to help charity? Do you help out in your local town or community? Do you follow environmentally friendly guidelines? If you answer “yes” to one or all of these questions then you should be looking at the best way to make the most of these CSR endeavours.
The key to maximising the opportunities presented by these activities is quite simply that they should be promoted to allow existing and potential customers hear about what your business is doing to help them and broader society, as well as giving them an understanding of the values inherent in the business.
In real terms, socially responsible activities and practice should be at the heart of the way all companies – regardless of size – do business. A truly successful business is a sustainable business and one that develops and maintains long-term value for the benefit of all stakeholders. This includes annual profitability and other non-financial metrics including customer brand and reputation.
So while resources may be in shorter supply in an SME, CSR should be not be viewed as a drain on these resources because carefully implemented CSR polices can help an organisation, regardless of its size, in many different ways including:
• Assisting in winning new business
• Increasing customer retention
• Developing and enhancing relationships with customers, suppliers and other stakeholders
• Attracting and retaining a motivated workforce
• Saving money on energy and operating costs, and managing risk
• Differentiating from competitors
• Generating innovation and learning
• Improving business reputation and generating positive publicity
• Providing access to investment and funding opportunities.
As you can see, many of the benefits of CSR are the same for firms of all sizes. Small businesses, however, may be interested in some other benefits that do not necessarily apply to larger organisations. For instance, SMEs with strong CSR policies may be more likely to win contracts from large businesses with similar strong policies. Those known for their CSR reputation are poised for success as more and more large companies hold their entire supply chain accountable to certain ethical standards. For example, companies such as M&S will only source from suppliers with similar ethical standards.
In general, small businesses may find that investors are more partial to companies that display good CSR. Also unique to smaller businesses is the culture created with employees, often very family-like, which can lead to greater loyalty, lower turnover and stronger experience and knowledge.
Brainstorming creative CSR policies and social entrepreneurship can also benefit smaller companies in terms of innovation. Today’s economy is increasingly knowledge-driven. Companies of all sizes are reliant on their employees’ creativity. For a small business that does not constantly have a team researching and developing their CSR strategy and initiatives, this can be a great way to transform the business and its product with fresh ideas.
Socially responsible activities and practice should be at the heart of the way all companies do business
From our own perspective as a medium-to-large organisation, Friends First’s CSR is not a single function or department. It is a philosophy and set of principles integrated into all aspects of the business. By acting responsibly across all aspects of our business, we can deliver sustainable value to all stakeholders and make a strong social and environmental contribution. This holds true to the CSR aim of embracing responsibility for corporate actions and encouraging a positive impact on the environment and stakeholders including consumers, employees, investors and the wider community.
True to this belief, we are actively encouraging one of our key stakeholder groups – independent financial brokers, many of whom fall into the SME category – to engage with CSR. For our financial advisers/brokers, there are many advantages. For example, one broker currently provides financial planning workshops for transition year students and will also be offering a workshop for their parents. This is achieving two objectives: Showing that the business cares and is willing to give something back to the community, while at the same time it promotes the business in a positive light to the local community through parents, children and others involved with the school.
The benefits have included generating new clients and referrals and building a strong reputation for the company. This approach is one of the best ways to develop long-term clients.
It is important to view CSR in terms of your own business and the benefits and rewards that it can bring the business, and the wider community. The challenge, regardless of the size of the business, is to ensure you are a socially responsible business and that you are demonstrating this to your existing and potential customers along with the other key audiences.