‘Business dictionary’ defines corporate environmental and social responsibility as:
“A company’s sense of responsibility towards the community and environment (both ecological and social) in which it operates.”
This can be achieved:
- through a company’s waste and pollution reduction processes.
- by contributing towards educational and social programs.
- by earning adequate returns on the employed resources.
You could say that the attention of the company shifts from focusing only on profits and the shareholders of the company, to increasing their philanthropic and volunteer work.
Of course in the world we live in, most companies would not make efforts to improve their environmental and social responsibility unless their was gain to be brought about by such a change.
So, what are the benefits of giving back?
The benefits can be divided into:
- Human resources
- Risk Management
- Brand differentiation
- Licence to Operate
Lets take a closer look at each one:
An E&SR programme within a company can aid recruitment and retention of employees. This is especially true for companies whose aim is to grab a top-level graduate from a university once they finish their degree.
Nowadays potential candidates ask about what E&SR policy has been put into place by the company. The youth of today are changing the way they see the world and they want their work environment to do the same.
Employees may also be aware of the company even before an interview just by the positive reputation it has externally and among its staff for efforts made during the E&SR programme.
Staff that participate as volunteers, for example, carry a ‘feel good’ factor that translates into greater motivation within the work place. It also connects people.
Managing risk is one of the most central parts of many companies. Unwanted attention from regulators, the media, the public, the government, and other figures of power is never a good thing and therefore if a company shows that it is dedicated to doing “the right thing” with people, the environment, reducing carbon footprint…etc, this can distract these regulatory figures from taking a ‘closer look’ at a company, therefore reducing company risk.
Also the risks involved in incidents that are socially or environmentally damaging, are very high and a company’s reputation can be destroyed in minutes.
Building up your company’s brand is something companies focus on in order to differentiate from the competition. There are many ways to achieve that; catchy website, clever logo, great imagery, social media, online and offline publications…etc. but sometimes, doing actions that stick in people’s minds is more effective than a great website. A good reputation builds up a loyal client base. A loyal client base ensures continued success.
Licence to Operate
In general companies have to take into consideration regulations, compliance, financial restrictions, and taxation when looking to start a new project.
In most jurisdictions, volunteer and charitable donations allow for a tax reduction.
Another positive aspect of E&SR is that showing the public and the government that you are dedicated to the ‘good’ of the town you are based in can sometimes facilitate the opening of doors when permissions for new projects are requested and licenses are needed.
Creating and E&SR programme within your company is easy, it can be as simple as donating towards the town hall green programme, volunteer work, sponsoring your city’s sports team, reducing carbon footprint, and offering products and services that carry a ‘green’ label.
Best of all, the positive results are visible and immediate and have an impact on a social, environmental, and corporate level.
What are the legal implications of implementing an E & SR programme in Cyprus and in EU? For detailed advice, you can get in touch with our Law Firm.