Corporate Social Responsibility Guide For SMEs

Corporate Social Responsibility Guide For SMEs

CSR. It stands for “Corporate Social Responsibility.” And most small business owners see it as something that companies like Coca-Cola do. The beverage giant has expanded its product base to include natural juices and soy beverages and set up fitness centers and exercise programs. They also have a goal of reducing its carbon footprint by 25% by 2020, through truck fleets that use alternative fuels.

So, what is a small business supposed to do? It can’t compete with the “big boys.” And yet social responsibility is in high demand by consumers. But a small business does not have to compete with these huge enterprises. It has to be concerned with its smaller customer base and its demands, demonstrating that embraces social responsibility too. That’s exactly what this post will show you how to do.

To Recap: What Is Corporate Responsibility

Simply defined, CSR is any activity of a business that shows its concern for the environment and/or for society.

More and more, even small businesses are embracing the concept of the “Triple Bottom Line” – people, planet, and profit. And while once considering only the profitability potential of a business, investors are now grasping the relationship of CSR to long-term growth and profit. In fact, a recent study demonstrated that social responsibility among small to mid-sized businesses does result in solid financial gains over time.

The Multiple Benefits of Social Responsibility in Business

Here is what any company, huge or small, reaps in benefits from social responsibility activities:

1. Loyal Customers

All of us want to feel that we are “doing good” in some way. That includes your customers. When you can prove to your customers that you are operating responsibly, they will see that patronizing you is an indirect way for them to “do good.”

This is the concept behind all of the charitable programs set up by Toms Shoes, for example. Every time a customer makes a purchase, they know they are supplying shoes, cleaner water, prenatal care, and eye health to others around the globe.

On a smaller scale, you can do the same thing. You can create an emotional bond with your customers when you show them that you are engaged in activities that improve lives or the environment, even in small, local ways.

2. Greater Sales

The goal of any business is to increase growth and revenue through sales. And here are some startling figures that show how being in business for social responsibility purposes works:

3. A Committed Workforce

Millennials and upcoming Gen Z’ers want to work for socially responsible companies. To these two generations, money and profits are not as important as the quality of life. And that includes quality of life for everyone, not just for themselves.

In recruitment and employment, when companies can demonstrate that they are engaged in socially responsible causes and activities, they have a greater chance of attracting and keeping the talent they want.

Two studies have shown the following:

  • Employees are more productive if they believe they are contributing in some way to a greater good outside of their paychecks. 9 out of 10 people are ready to take a pay cut if they are doing more meaningful work.
  • Employees who are working for a company that has a purpose greater than profit will stay longer and are far more inclined to present a positive image of their employers to their friends.

4. Getting That Competitive Advantage

There are two aspects to getting a competitive advantage – more sales than competitors, and greater attraction of investors so that growth can occur.

A research study summarized in the Journal of Business Research showed that getting a financial advantage was much greater for companies that focused on and publicized their social responsibility efforts.

Now that investors understand the consumer demand for social responsibility, they are looking at that, along with other factors, as a potential for greater long-term success. In fact, a poll conducted by the European Sustainable Investment Forum reported that 90% of responding investors stated they wanted to see CSR and sustainability reports in documents they reviewed.

5 Tips for Small Business Corporate Social Responsibility Efforts

Now that we have looked at several corporate social responsibility examples, it’s time to look at what small businesses should do that will get them the same benefits, though on a smaller scale. Here are five tips:

1. Define Your Values

Values are core beliefs in what is right and wrong and what should govern any business decision you make. Examples of good core values might include:

  • Honesty
  • Generosity
  • Diversity
  • Kindness
  • Respect
  • Kindness
  • Empathy

Select two or three that are most important to you, and use those to determine the CSR goals you decide to set. Respect for the environment, for example, may increase your efforts to recycle, to use less paper and water, to consider solar panels for your facility.

2. Set Reasonable and Achievable CSR Goals

Starbucks has a set of lofty CRS goals. But they did not set those goals in a vacuum. They looked at their customer base and its demands and defined their goals based on those customers and their budget. Hiring 25,000 vets by 2025 was not an unreasonable goal. They open new franchises all the time, and they do have a turnover rate that will accommodate this.

Other lofty goals include sourcing coffee only from ethical growers, planting trees worldwide, renewable energy and food rescue programs. And it supports its local communities through programs in which employees are given time off to volunteer.

You can take some Starbucks’ goals and bring them down to your small business level. For example:

  • Can you set a goal of getting five homeless pets off the street this year?
  • Can you set a goal of giving employees a day a month to volunteer in the community?
  • What will it take to organize a local tree planting event?

3. Tie Business Decisions to Your Core Values and Your Goals

As you make your business decisions, always consider how they are going to impact your CSR goals and core values. If, for example, you are considering a new product line, what are the raw materials involved? Are they sustainable? What will production look like and what natural resources (energy, water, etc.) will this entail?

Even a decision as simple as packaging can impact the environment. Are you using recyclable materials only, and do you have a message on that packaging that reminds your customers that they should recycle that package? If you have to raise prices on some of your products, tell them why you are doing it and how much of their purchases will go toward this goal. Keep your customers apprised of the progress you are making. Toms Shoes makes its giving programs very public all over the web. You should too.

How can you do more than just donate to a charity once a year? If you have kindness and generosity as core values, then how can you develop long-term programs that will impact people over a period of time?

And don’t forget that those employees and customers who do participate deserve recognition too. Feature them on your social media platforms and website. Provide them with small tokens of appreciation such as donation certificates, special discounts or early invitations to your events.

4. Look for Opportunities for CSR Efforts You Can Handle

Hunger and homelessness are huge issues. And it both local and global. You can focus on the local. Here are a couple of examples.

In Detroit, there is a bakery chain, Avalon Bakery. When it started its first location, it had a small lobby, which they used to provide coffee and pastries to homeless people who could have a few moments of relief from the cold. They didn’t even advertise what they were doing. But the media caught on. And people began to patronize that bakery. Today, it has several locations all over Detroit, and its products are now sold in grocery chains, such as Whole Foods.

Rosetta’s Kitchen is a restaurant in Asheville, NC. It asks customers to pay whatever they feel they can for their meals and does advertise that everything over $6 will help the restaurant provide free or low-cost meals to the hungry in the area. Going back to the idea that people want to “do good,” customers who can afford it will pay far more than $6 for a meal because they know they are contributing to a long-term cause that is worthy. Several other restaurants across the country have adopted this concept, and it works for them too.

Try to be a bit creative. And involve your employees in generating ideas. Here’s another example from Virgin Atlantic Airlines. Flight attendants realized that people returning from overseas trips/vacations had small amounts of foreign currency in their pockets that they would not be using once they got home. So, they began to collect that currency on all of its flights. In 2016 alone, they got over $700,000 to donate to WE, a global charity. All of this because of the bright idea of one employee.

5. Collaborate with Other Small Businesses

You may not be able to get five vets off the street, based upon what you can generate to fund this effort. But together, with several other small businesses, you could be able to do just that.

Look for other businesses that are not direct competitors and propose your collaborations. This increases the CSR engagement, and you can promote each other at the same time – a larger customer base is “in the cards” here.

Even a small business can do “big things,” just on a smaller scale. Start with a single idea or focus for you CSR, give it all you go, publicize, get employees and the community involved, and you will ultimately realize it in your bottom line. And better than that? You will be happier.


As a small business, you are perfectly positioned to affect your community deeply, and your best bet is to start small, with a simple idea, to make a difference. Focusing on one person or one idea at a time allows you to concentrate all your energy in one direction. As your idea gains momentum, you might be surprised at how much good you can do!

Photo by Tom Ezzatkhah

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