Advice for businesses

The importance of the ‘triple bottom line’

How firms treat their employees, pensioners, suppliers, consumers, investors, regulators, communities and pressure groups has become increasingly important. Businesses today have to deliver an outstanding ‘triple bottom line’ of social, environmental and economic performance if they are to enhance their corporate reputation and brand value.

So firms not only put health and safety and equal opportunity programmes in place as the law requires, but many make voluntary charitable donations and encourage employee volunteering.  They may secure external accreditation such as the ISO 14001 certification for their environmental management systems. They may also formulate policies on animal welfare. Risk to reputation is a serious matter impacting profitability.

What makes a ‘good’ company?

Businesses that are good ‘corporate citizens’ work in a proactive way beyond the minimum requirements of the law to maximise the wealth of all key stakeholders. They uphold high standards of governance, transparency and accountability and manage social, environmental and economic issues and processes. They consult stakeholders to identify their concerns, set ‘key performance indicator’ monitoring systems and targets, embed social responsibility into ‘skills competencies’, have their social and environmental results independently audited, and report their results openly.

How to tell how good a company is – monitoring ‘corporate social responsibility’ (CSR)

Businesses generally advocate voluntary pathways towards corporate social responsibility in preference to legislation. They favour economic incentives that encourage best practice, and oppose mandatory controls that might stifle innovation and competitiveness. However, CSR is a developing area for legislation.

The Companies Act 2006 requires quoted companies to provide information in their business reviews about:

The Department for Environment, Food and Rural Affairs has issued guidelines to help businesses address their environmental impacts.

Firms can become more socially responsible in a number of ways:

Links

The government and a number of organisations are taking a look at corporate social responsibility, how to put it into practice and how companies are measuring up. Visit the following websites for more information:

 

Page last edited: 01/09/2009
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