Don’t ignore corporate social responsibility

Corporate social responsibility, or CSR, has gone mainstream, as companies across the globe have found that doing good for their employees, the communities in which they do business and the environment also benefits their bottom line.

They’ve found that their suppliers are setting CSR standards for the companies they work with. And they’ve found that their customers and employees want to work with — and stay with — a company that is committed to principals of social responsibility.

CSR is more than just complying with statutory obligations regarding environmental laws, labor laws and Sarbanes-Oxley — it has become a critical element of day-to-day corporate operations. A strategic, top-to-bottom commitment to being socially responsible and ethical in the management of employees and manufacture, distribution, marketing and sales of products has become an inescapable fact in the global corporate environment. We can no longer ignore the fact that all companies make an impact — they impact the environment, other companies, local communities and they impact the lives of their employees. Making that impact a positive one is at the heart of CSR.

In the current global environment, businesses recognize that to succeed in the local, national and world marketplace, they must pay attention to more than the bottom line and share price. They have to make business decisions based on what is in the best interests of all of their stakeholders — management, shareholders, employees and the community.

Ultimately, these companies are recognizing, and empirical data confirms, that modeling their business performance with a constant view towards social responsibility has a very significant positive effect on their bottom line — whether because such a corporate focus makes their products more attractive to an increasingly conscientious public, because it minimizes governmental and regulatory reaction to perceived acts or operations that may be socially unacceptable or serves to enhance employee retention.

Smart companies now view CSR initiatives as business opportunities rather than business costs.

Developing your reputation

While we cannot lose sight of the fact that business corporations must continue producing profits for their owners to be viable, it is clear that more companies are recognizing that their profits do not emanate solely from the popularity of the products and/or services they provide, but also are dependent on a reputation as a caring and sensitive corporate citizen.

For companies that do not have a formal CSR initiative in place, it may sound daunting. But it doesn’t need to be.

Companies work hard to develop their reputations with customers, the general public and their own employees. The consequences for a company from not recognizing its social responsibilities — for example, by relying on child labor in overseas operations or failing to be sensitive to the environmental impacts of its production processes in other countries — can be severe, adversely affecting the company’s reputation, share price, market and customer base.

Here are some tips to get started:

• The commitment to CSR must start at the top of the organization in order to obtain and maintain buy-in from the bottom.

• Appoint a CSR coordinator for the company.

• Make it part of your company’s strategic planning process.

• Choose CSR initiatives that match your corporate mission.

• Start small. Make a decision to do two or three things this year that will have a positive impact. For example — organize one day when employees donate their time and services to a local nonprofit that the company agrees to sponsor.

• Monitor, measure and report CSR activities.

• Be passionate, have fun and involve employees in the planning and implementation process.

Corporate social responsibility is not only good for our communities, a company’s work force and our planet, it is now a corporate imperative for well-run companies.

James C. Hood is a partner with Nixon Peabody LLP in the corporate transactions practice group based in the firm’s Manchester office. Barbara A. Bedard is an associate with the firm and is a member of the corporate transactions practice group in Manchester.