By Sean Condon
For corporations, caring about social and environmental concerns has traditionally been viewed as a needless expense. Instead, business focuses on increasing profits.
But recently, more and more corporations are changing their policies to become more accountable for their actions in what is called “corporate social responsibility” (CSR).
While the number of corporations that promote social and environmental awareness is still relatively small, many are finding it necessary to their own economic interests to implement programs that promote active social and community involvement. A stable surrounding environment increases the opportunity for corporate profit.
CSR has long been considered a trade-off against profits, that blurs the objectives of the company and distracts managers from their proper tasks.
But companies working with shareholders to make social responsibility part of the overall strategy to increase profits are beginning to see the benefits. The Centre for Innovation in Corporate Responsibility (CICR) found that corporations that work with shareholders, non-governmental organizations and community leaders have been able to build a stronger name for themselves without compromising their profits.
By setting an example with responsible practices, corporations are being granted greater access to land; enjoying a better reputation in communities; have an improved quality in decision making and are creating greater health and stability for their industry.
As public awareness increases on how corporations affect areas where they operate, long-term risks of not being socially responsible will outweigh short-term benefits of straight profits. Corporations that do not adhere to community concerns will face a strong backlash against their reputation, making it increasingly more difficult for them to secure investments.
Talisman Energy Inc. was heavily criticized by its shareholders, the public and the media for their involvement in oil fields in war-torn Sudan. This would have been unimaginable 10 years ago. Corporations can expect this kind of public scrutiny to continue.
Corporations that spend time and money on environmental and social concerns now will create a more stable and educated surrounding that will increase innovation and productivity. CSR not only helps increase revenue, but is good for society as a whole. The more it is practiced, the more corporations will see how everyone can profit.