Doing good is good for business. So what do you need to know about adopting the principles of corporate responsibility? Angela Tufvesson investigates
At Veterinary Oncology Consultants, which provides remote consultations to vets caring for animals with cancer, directors Angela Frimberger and Antony S. Moore are committed to social and environmental justice. They run their practice on solar energy, drive a hybrid electric car, give employees time off to engage in volunteer activities and donate one per cent of their profits to charity. This approach is known as ‘corporate social responsibility’ and there’s evidence to suggest that businesses of all sizes who do good can benefit the wider community as well as their hip pocket.
“A lot of us have been taught that business decision-making is supposed to be separate from moral decision-making, that when you make business decisions you should just think about profitability, and that moral decision-making doesn’t belong in the workplace,” says Frimberger. “That’s a misconception and something that we need to let go of. Doing the right thing is not soft, weak or naive. It’s doing the right thing and it’s good for business.”
What is corporate social responsibility?
Corporate social responsibility—or ‘CSR’ in corporate lingo—refers to business practices that benefit society. According to the International Organization for Standardization, “social responsibility is the responsibility of an organisation for the impacts of its decisions and activities on society and the environment, through transparent and ethical behaviour.”
Everything from reducing your environmental footprint to working with local charities and volunteering for good causes is classed as corporate social responsibility. And thanks to wider acceptance of the concept, Dr Leeora Black, managing director of the Australian Centre for Corporate Social Responsibility, says corporate social responsibility now encompasses areas such as labour relations, environmental impact—including animal welfare—fair operating practices, human rights and consumer issues.
“This entails fair treatment of workers and suppliers, reduction and safe disposal of waste, reducing energy and water use, education of customers…and being involved in your local community,” she says.
“In days gone by people thought that corporate social responsibility should be expressed through charitable donations, but today we have a far deeper and wider understanding of how business should behave. Corporate social responsibility is not about how you spend your profits, but about how you make your money.”
Of course, there’s more to it than appeasing your social conscience. Beyond the warm and fuzzies of doing good, there’s evidence to suggest a positive link between corporate social responsibility and financial performance, which explains why most global behemoths and large Australian corporates like PwC, National Australia Bank and Rio Tinto have a corporate social responsibility strategy.
The same goes for small businesses like veterinary practices. A recent study published in the Journal of Small Business Management found small to medium-sized businesses that invest in corporate social responsibility can expect financial rewards as well as enhanced reputations.
“Doing the right thing is not soft, weak or naive. It’s doing the right thing and it’s good for business.”—Angela Frimberger, director, Veterinary Oncology Consultants
Co-author of the study, Dr Mehran Nejati from the School of Business and Law at Edith Cowan University, says the results are transferrable to veterinary practices. “Corporate social responsibility can benefit small businesses such as veterinary practices in a number of ways including better relations with stakeholders, leading to improved brand equity and positive image, improved bottom line through efficiency improvements and environmental practices—for example, reducing consumption of water, electricity and raw materials—and improvement in working conditions of employees leading to higher satisfaction and productivity.
“In addition, I have found that employees favour working for socially responsible companies, and corporate social responsibility positively influences employees’ organisational commitment, hence benefiting the firm.”
Frimberger agrees that there are loads of business benefits to be gained by veterinary practices willing to adopt the principles of corporate social responsibility. “From the standpoint of a customer, corporate social responsibility says that your practice is engaged in the community. Most veterinary practices are community-based, so community service can only be super positive for customer engagement.
“It also says that you’re an ethical player. That crosses over into the customers’ perception of not only wanting to patronise your business because you do good in the community and the environment and the world, but also because it signals that you’re an ethical business that isn’t going to take advantage of customers or recommend services they don’t need.”
Being socially responsible
Dr Nejati suggests a three-step process to implement corporate social responsibility in your practice. First, choose a cause close to your business mission that’s important to your clients. “A veterinary practice might concentrate on the issue of stray animals and offer some flexibility in treating them,” she says. “Alternatively, they might decide to engage in skill development and offer apprenticeship programs for young people.”
Next, start small and build momentum. “It’s best to start small, gauge your involvement in the activity, seek feedback from key stakeholders and make corrective measures to improve,” advises Dr Nejati.
“Along this process, veterinary practices will develop better relations with stakeholders and see the positive impacts of corporate social responsibility practices. Building upon these small successes, the firm can then use the momentum to try out new activities.”
Finally, it’s crucial to celebrate your successes and communicate your activities—for example, on your website, social media and posters displayed in the practice.
“A key reason why corporate social responsibility practices of small businesses do not pay off in some cases is due to their failure in properly communicating these practices,” says Dr Nejati. “Remember that social capital is power, so relevant stakeholders need to be informed about the social causes supported by the veterinary practice and the firm’s corporate social responsibility plans.”