CSR - Buzzword or boiling point for SMEs?

SME's have a significant impact on the economy, they employ 12 million people in the UK, around 55% of the private sector and three times as many as the FTSE 500. In 2009 it Is increasingly clear that SME's represent a healthy proportion of the population and therefore impact the future for businesses and are key to driving innovation and dynamism in the economy, yet CSR is still an avenue currently unexplored by this demographic.

The integration of public interest into corporate decision making has been a long overdue battle for small and medium sized businesses. Whilst CSR policies reach new heights among large corporations it has failed to get underway with smaller enterprises who generally feel the motives to be either unrealistic or irrelevant to their business model. The truth is that CSR has evolved from the cosy 'people, planet, profit' strategy, infact CSR has never looked so alluring. Corporate Social responsibility is no longer about introducing biodegradable stationery to the office or sending your personnel staff to useless courses. It's much larger than this and infact wholly beneficial for SMEs who need to increase their presence with minimum outlay.

What's the business case for CSR?

Brand differentiation
In crowded marketplaces, companies strive for a unique selling proposition that can separate them from the competition in the minds of consumers. CSR can play a role in building customer loyalty based on distinctive ethical values. Several major brands, such as The Co-operative Group, The Body Shop, American Apparel and Innocent were built on ethical values. Business service organisations can benefit too from building a reputation for integrity and best practice.

Dominance
SMEs account for a key profitable market, but if you wish to go beyond this niche, CSR is a clever way to reach global markets you would not usually have access to, through coverage and association with large charities, donation schemes, awards and partnership strategies with similar or indeed larger companies in similar industries.

Building Trust
Corporations are keen to avoid interference in their business through taxation or regulations. By taking substantive voluntary steps, you can persuade governments and the wider public that you are taking issues such as health and safety, diversity, or the environment seriously.

Ethical consumerism
The rise in popularity of ethical consumerism over the last two decades can be linked to the rise of CSR. As consumers are becoming more aware of the environmental and social implications of their day-to-day consumer decisions and are beginning to make purchasing decisions related to their environmental and ethical concerns, businesses will all eventually need to adapt to accomodate these trends.
Human resources
A CSR programme can be an aid to recruitment and retention. Potential recruits often ask about a companies CSR policy during an interview, and having a comprehensive policy can give an advantage. CSR can also help improve the perception of a company among its staff, particularly when staff can become involved through payroll giving, fundraising activities or community volunteering.

Risk management
Managing risk is a central part of all businesses however small. Reputations that take decades to build up can be ruined in hours through incidents such as corruption scandals or environmental accidents. These can also draw unwanted attention from regulators, courts, governments and media. Building a genuine culture of 'doing the right thing' within a corporation can offset these risks.

Social Awareness and Education create PR and an authoritative voice in the industry.

Businesses are increasingly looking for ways in which the media and the Internet can portray them and recognise them. Through education and dialogue you can create an essential development of community for your business where you will be seen as responsible for your actions and a trusted leader in your sector, this will be not only attractive to your customer base but potential stakeholders, investors and new partners that could help take your company further.

A realistic start to an CSR Approach: How to get started
The motivations for getting involved in CSR are clear but there are clear differences between the ways in which an SME and a large corporation can engage in CSR and unless these are adressed small businesses will be left out of the loop. CSR terminology, grand policies and procedures, and five year forecasts should not ever be a focus for a business with 1- 250 employees. Instead focus on practicalities and 'doing things'. CSR is often seen as solely the domain of the big firms who have time and resources to devote to developing their approach, but this does not have to be the case. For example, SMEs are rooted in the community and identify themselves as part of the community. Again with this sense of identity, the common sense approach says that 'what goes around, comes around'. 'Necessity is the mother of invention', as they say, and SMEs through their lack of time and resources, are often driven to find new and innovative ways of doing things for less. For example taking a networking approach can deliver dividends, if a local store teams up with the other local stores to smarten up the high street, this delivers a multiplier effect in terms of benefits to trade, at a fraction of the cost of doing it alone.

In fact, there are many ways in which the SME can successfully integrate CSR into his/her business approach, the main ways being these:

Environmental management
Through waste minimisation and recycling schemes where you can partner with other offices in your building thus increasing your network too. Membership of environmental organisations. Entering environmental award schemes. Using energy from renewable sources.

Employees
• Flat management structures
• Employee newsletters
• Social events for staff, where they can involve themselves with ethical organisations once every three months or monthly as a team.
• One to One mentoring of employees.
• Sending your employees to train those in the local community.

Community
• Work with local schools on certain projects.
• Donating a percentage to charity from some aspect of your business.
• Sponsor a local sports team.
• Enter community engagement programs.
• Recruit from your community or run an apprentice or internship scheme for your borough.

Supply Chain
Meet with Directors of local business associations.
Supplier learning schemes.
Take part in best practice schemes.
Feedback to customers, staff and suppliers.
Develop long term relationships with suppliers by setting performance indicators or regular meetings and partnerships.