Listen: Chatting to Laura & Duncan, Dr Leeora Black explains why businesses are getting all ethical.
Have you noticed how big companies brag a lot in their ads these days about the way they care for the environment, help developing nations, and invest in the future?
Or how fashion chain stores now offer ethical bags and accessories to help their charitable foundations? Or how your bank, when you sign up for a new savings account, gives you a gift they bought from a non-profit?
It’s no coincidence.
Around the world, organisations from small non-profits to global corporations are getting on board the growing wave of support for “Corporate Social Responsibility”. Essentially, that’s fancy industry-speak for ‘doing the right thing’.
In the 1980s, greed was a guiding principle for many big businesses. But these days, it’s hard to get away with those kinds of empty values. In fact these days, some companies seem to be locked in a competition for the ‘most virtuous company’ award.
Travel company Airbnb recently put corporate social responsibility in the headlines, when it aired a commercial at the US Superbowl about diversity and inclusiveness. It was a quiet stab at Donald Trump’s anti-immigration policy, and an example of how companies are working to make an impact not just on their bottom line, but on the world around them.
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Everyone is Responsible for Their World – Even Big Businesses
In a chat with Hope 103.2’s breakfast team, sustainability expert Dr Leeora Black explained CSR in a nutshell.
“It’s about the responsibility of an organisation for its impact on society and the environment,” she said. “It requires organisations to think very carefully about the full range of their impacts: financial, economic, environmental, social.
“For example in Japan you find a very big focus on the environment and the employees, whereas here in Australia one of the newest areas companies are starting to look at is sustainable supply chains.”
In Australia, many fashion companies and department stores are working to make sure their workers are paid properly, some banks are removing fossil fuels from their investments, and Andrew Forrest, the mining magnate of Fortescue Metals Group, has famously called on the business world to rid its supply chains of slavery by setting up the Global Slavery Index and the Walk Free Foundation.
And entire companies have now been set up founded on making a difference in the world, such as Daniel Flynn’s Thankyou company.
You Won’t Lose Profits by Being Responsible
For business owners concerned that they may lose profits by making ethical decisions, it’s an unfounded fear, according to Leeora Black.
“Profits and responsibility are 100 percent compatible, and the idea that you have to reduce profits to be socially responsible is quite an old fashioned idea, and is not at all the case,” she said.
One of the big influences that’s pushed businesses to be more ethical, is the Sustainable Development Goals that adopted by the United Nations. In Leeora’s words, it’s a “fix-it list for the entire world”, setting out 17 major goals to do with poverty, food and water, education, infant mortality and more.
“It’s been a real catalyst to more thinking in the business world of Australia,” Leeora said. “We’re now starting to see more companies use these goals to set ambitious new targets, to either reduce negative environmental impacts or improve equity and equality, and improve their supply chain practices.”
Don’t Be Fake About it
Some observers, like academic writers John Rice and Stephanie Schleimer at The Conversation, are quite cynical about the CSR efforts of many companies, which seem to be simply ‘window dressing’. They say many big companies brag about their ethical initiatives, but still have major problems in the way they treat their workers and the environment.
“If firms truly want to incorporate CSR into their long-term strategy, [it] needs to sit right in the heart of the firm,” they write.
Leeora Black concurs, saying corporate responsibility is not just about brand management, or keeping up appearances.
“It’s about caring for employees and local community, and making sure the supply chain is free from human rights and environmental abuses.”
“If it’s just about appearances and not about substance it won’t work,” Leeora said. “It’s not just about brand. It’s also about caring for employees and local community, and making sure the supply chain is free from human rights and environmental abuses.
“The biggest hurdle is the mindset and the will to do something. There has to be an understanding at the most senior levels of an organisation about the organisation’s responsibilities. And there has to be a willingness to address those.
“Once the eyes and mind are opened to these ideas there’s relatively few roadblocks in any organisation.”