Corporate responsibility and sustainability should fundamentally be about long-term financial profitability. That’s the stark conclusion that can be drawn from numerous studies looking at the business benefits of strategic CSR. But why aren’t more companies talking about financial benefits – why are we scared of using the “f-word”?
Recently, the team at Corporate Citizenship undertook a client project looking at the business benefits of sustainability. We scoured hundreds of corporate reports and websites looking for statements and data on the commercial returns. We found very few. The theory behind the business case is well established. So why does the data prove so hard to come by?
I suspect there are two reasons for this lack of financial disclosure: one practical; another psychological.
The first, practical reason is that it’s hard to do. Putting dollars and cents on the return on investment from eco-efficiencies or better labour relations is challenging. But it’s not impossible (I have previously written about how to do this). The time, effort and judgement required puts some off.
But a second reason lurks behind the absence of real data. It feels like some organisations are stuck in the mindset that sustainable business practices with a financial benefit are somehow less worthy. If the organisation investing in the community or developing a socially-beneficial product gets some type of commercial return, it might sour the story. I’ve heard it said a business might be “accused” of “profiteering” from social good. This is a hangover from the old days when CSR was seen as a philanthropic endeavour, a gesture of goodwill, without the expectation of a return. The feeling seems to be that doing good for it’s own sake somehow makes the act more worthy.
To those in this mindset, it’s time to get real. Private companies have shareholders, and companies should be proud about taking steps to maximise returns in the long-run. That’s exactly what our Long-Term Value Project is all about – aligning commercial interests with social ones. That’s the only way for business to grow and play a part in social and environmental initiatives. The good news is that there are a few great examples out there, like SAP’s calculations or the M&S Plan A Business Case.
Businesses should be boastful about their solutions to global challenges, improved employee wellbeing or reduced risk in supply chain that result in a real commercial benefit. So let’s not shy away from stories on the business case. Let’s not hide our financial benefits under a bushel. Let’s start proudly shouting about the f-word.