The case for planning an ethical business – with social responsibility at the core
Definition of ethical:
‘adhering to moral principles; being honourable and moral’
When planning your business, it is important you understand that corporate social responsibility is not only the prerogative of large corporations to ‘do good’, it should be at the core of your business too.
There is empirical evidence that there is definitive commercial benefit to being a responsible business and trading fairly. Ethical business is not only good for the planet and human race, but it is also great for business – particularly yours!
Former Prime Minister Gordon Brown said ‘Corporate responsibility is a belief that economic, social and environmental objectives can be pursued together in harmony, and in particular that corporate self-interest and corporate responsibility are not irreconcilable opposites, but can move forward in unison. It is a recognition that when business loses trust it is at its most vulnerable’.
There is no doubt that companies such as the Co-Operative Bank and Waitrose have benefited from their ethical stance on global sourcing; albeit charging a premium for their products.
When considering Corporate Social Responsibility, many companies now focus on four key areas:
Environmental efforts
All businesses, regardless of size, have a carbon footprint and any action to reduce this is considered good for both the business and the community. A prime example of this is the charging for plastic bags now by supermarkets to reduce the impact of plastic within the environment – particularly the sea. So what can your business do to reduce its carbon footprint?
Ethical labour practices
Recent revelations of businesses exploiting foreign labour have damaged the images of a number of leading clothing retailers. By treating employees and workers in their supply chain fairly, companies can demonstrate their social responsibility. The Co-Operative launched a ‘Fairtrade’ brand several years ago; buying directly from farmers and paying a guaranteed above ‘market price’ which has seen their profits rise dramatically. Consumers are prepared to pay extra where there is a perceived social impact.
Volunteering
Companies can create voluntary community schemes for their staff, ranging from skill-sharing to the regeneration of areas of wasteland. The positive benefit of such community involvement is that it will create a sense of pride in the workforce and involvement within the local community.
Philanthropy
One way of practising social responsibility is by donating money, products or services to local causes. In my own town in North Wales, Tesco give customers the option to vote each month by providing a token after each visit that gets added to either one of three organisations with the one with the most tokens receiving the donation.
Building a socially responsible business
Being a socially responsible business costs time, money and resources. When planning your business you should avoid efforts that are not related to your core business or ethical standards. Instead of operating a ‘headline’ corporate responsibility scheme, it is important to adopt socially responsible practices gradually over time. Consumers tend to react positively to companies that embrace a long-term social responsibility programme.
Exercise
This is a great opportunity to revisit your business plan and to see whether your narrative includes the following descriptive words: Fair; Ethical; Decent; Moral; Respectable; Upstanding; Responsible; Community.
Think about the following when you are planning your business:
• Will your suppliers have a socially responsible trading policy?
• Create positive partnerships within your local community; customers and suppliers;
• Network with others to exchange best practices and ideas;
• Think about making your business a force for corporate social responsibility;
• Safeguard the environment by conserving energy and resources – even something as simple as switching off unused lights helps!
• What you propose to do about your rubbish and waste.
Get your tax affairs organised prior to release
Remember to contact The Tax Academy CIC to review your tax affairs to ensure they are up to date. This is particularly important if you were self-employed prior to entering prison, as you may well have outstanding tax returns and penalties. There is nothing worse than being released from prison and finding that you have tax debt that needs to be resolved with HMRC.
