Business Case

Business in the Community defines responsible business as the process by which a company manages, measures and reports on its commitment to improve its positive impact on society and the environment. This is managed within the company through its operations, products or services and through its interaction with key stakeholders such as employees, customers, investors and suppliers. Responsible business is sometimes referred to as corporate social responsibility or CSR.

But why should a company commit to responsible business?

Reputation management
Attitudinal surveys show members of the public prefer companies that are seen to be positively contributing to the environment and society. A good reputation is one of the most valuable intangible assets a company can have, and maintaining it is a key motivation for companies to engage in responsible business. By being responsible

• Companies can enhance brand value by managing and influencing the expectations of their customers.
• Companies can build trust through actions that increase customer satisfaction and add to shareholder value .
• Companies can enhance positive relationships that deliver business advantages that  maintain and improve market share.

Employee satisfaction, retention and recruitment
There is a “war for talent”  - businesses are dependent on their employees to deliver and create  value. Responsible business practice: 

• Is increasingly a contributing factor in attracting and retaining a talented and diverse workforce, and in being an employer of choice.
• Builds employee morale and loyalty
• Creates a more motivated, engaged and inspired workforce that  can improve long-term productivity.
• Adds to the bottom line by improving staff retention - eliminating recruitment costs and reducing absenteeism – helps maintain or improve productivity.

Innovation and learning
Responsible business is increasingly being used to stimulate learning and innovation within organisations. This helps to:

• Identify new market opportunities
• Establish more efficient business processes
• Maintain competitiveness
• Ensure long-term survival

Risk, change and total management
Responsible business practice helps companies to better understand and manage risk, which:

• Reduces avoidable losses and identifies new emerging issues
• Can be used as a tool to audit and improve every aspect of the company
• Attracts investors who believe social and environmental risk management can have a significantly positive impact on a company’s long-term market value 
• Reflects a management style that is forward looking and more able to manage uncertainties in the future.

Cost of capital
A company that effectively manages its social or environmental performance is also demonstrating its quality of management through:

• forward looking thinking, adopting transformational strategies and tackling risk and uncertainty which are all attractive to investors.
• adopting this holistic approach to performance so a company will be considered to be well managed with lower risks which may be represented by a lower share price volatility which in turn could affect the cost of capital.  

Financial performance
Responsible business opens opportunities to reduce present and future costs to the business by:

• Improving competitiveness, market positioning and profitability
• Anticipating impending legislation and so reduce future costs of compliance
• Understanding how it uses natural resources and energy and the operational benefits of managing these more effectively
• Integrating environmental specifications into new assets, which can reduce life-cycle costs and improve efficiency.

Global responsibility
Business operates in a global economy and as such stakeholder views are shaped by what they see happening in the world around them. Businesses have the opportunity to address a unique set of global challenges using responsible business strategies. Companies benefit by:

• Opening doors on new markets, new opportunities and new relationships
• Setting the scene for long-term profitability and operational security
• Increasing the competitiveness and better understanding the needs of the communities in which they operate.

For further details of the business benefits of responsible business or corporate social responsibility (CSR), please see the attached guide 'The Business Case for Corporate Responsibility' which was written in partnership with Arthur D Little.