Monthly Archives: August 2016

Information About Corporate Social Responsibility

Corporate social responsibility (CSR) refers to business practices involving initiatives that benefit society. A business’s CSR can encompass a wide variety of tactics, from giving away a portion of a company’s proceeds to charity, to implementing “greener” business operations.

There are a few broad categories of social responsibility that many of today’s businesses are practicing:

1. Environmental efforts: One primary focus of corporate social responsibility is the environment. Businesses regardless of size have a large carbon footprint. Any steps they can take to reduce those footprints are considered both good for the company and society as a whole.
2. Philanthropy: Businesses also practice social responsibility by donating to national and local charities. Businesses have a lot of resources that can benefit charities and local community programs.
3. Ethical labor practices: By treating employees fairly and ethically, companies can also demonstrate their corporate social responsibility. This is especially true of businesses that operate in international locations with labor laws that differ from those in the United States.
4. Volunteering: Attending volunteer events says a lot about a company’s sincerity. By doing good deeds without expecting anything in return, companies are able to express their concern for specific issues and support for certain organizations.

Why CSR matters
Liz Maw, CEO of nonprofit organization Net Impact, noted that CSR is becoming more mainstream as forward-thinking companies embed sustainability into the core of their business operations to create shared value for business and society.

“Sustainability isn’t just important for people and the planet, but also is vital for business success,” said Maw, whose company connects students and professionals who want to use business skills to do social good. “Communities are grappling with problems that are global in scope and structurally multifaceted — Ebola, persistent poverty, climate change. The business case for engaging in corporate social responsibility is clear and unmistakable.”

“More practically, [CSR] often represents the policies, practices and initiatives a company commits to in order to govern themselves with honesty and transparency and have a positive impact on social and environmental wellbeing,” added Susan Hunt Stevens, founder and CEO of employee engagement platform WeSpire.

As consumers’ awareness about global social issues continues to grow, so does the importance these customers place on CSR when choosing where to shop. But consumers aren’t the only ones who are drawn to businesses that give back. Susan Cooney, founder of crowdfunding philanthropy platform Givelocity, said that a company’s CSR strategy is a big factor in where today’s top talent chooses to work.

“The next generation of employees is seeking out employers that are focused on the triple bottom line: people, planet and revenue,” Cooney told Business News Daily. “Coming out of the recession, corporate revenue has been getting stronger. Companies are encouraged to put that increased profit into programs that give back.”

Examples of corporate social responsibility
While many companies now practice some form of social responsibility, some are making it a core of their operations. Ben and Jerry’s, for instance, uses only fair trade ingredients and has developed a sustainability program for dairy farms in its home state of Vermont. Starbucks has created its C.A.F.E. Practices guidelines, which are designed to ensure the company sources sustainably grown and processed coffee by evaluating the economic, social and environmental aspects of coffee production. Tom’s Shoes, another notable example of a company with CSR at its core, donates one pair of shoes to a child in need for every pair a customer purchases.

However, Stevens said companies need to really understand what their core social purpose is and how that aligns with their stated mission, to create a cohesive CSR strategy.

For example, Stevens said that Kashi, a Kellogg’s brand, wants to increase organic farming and is one of the few certified organic cereals. Since only 1 percent of U.S. farmland is actually organic, the breakfast brand worked with Quality Insurance International to help certify new organic farmers across the nation.

Practicing what you preach
Undertaking socially responsible initiatives is truly a win-win situation. Not only will your company appeal to socially conscious consumers and employees, but you’ll also make a real difference in the world. Keep in mind that in CSR, transparency and honesty about what you’re doing are paramount to earning the public’s trust, Givelocity’s Cooney said.

“If decisions [about social responsibility] are made behind closed doors, people will wonder if there are strings attached, and if the donations are really going where they say,” Cooney said. “Engage your employees [and consumers] in giving back. Let them feel like they have a voice.”

Stevens, of WeSpire, reminded business owners that the corporate world has more power than many realize, and using that power to improve the world can bring people of all backgrounds, ages and interests together.

“Given their power and sheer size, corporations can solve big social problems and have a huge impact,” she said.

More Information About Environmental Regulations Won’t Necessarily Cut Into Profits

An idea commonly heard in the entrepreneurial community is that stronger government regulations mean less profitability. However, new research from the University of Kansas (KU) suggests that more-stringent regulations, when coupled with a light-touch enforcement approach, often lead to more profitability for private companies in the long run.

Dietrich Earnhart, a KU professor of economics, and Dylan Rassier, a KU alumnus and an economist with the U.S. Bureau of Economic Analysis, studied the effects of the U.S. Clean Water Act and its implementation by the U.S. Environmental Protection Agency (EPA). The study provides support for “the Porter hypothesis,” formulated by economist Michael Porter in 1995, which states that strict environmental regulations could lead to innovation and improved efficiency that would ultimately improve a company’s ability to compete.

The study rests on the idea of “effective regulatory stringency,” which the authors separate into two parts: legal requirements and government attempts to enforce compliance. The researchers examined government inspection data from the EPA’s Permit Compliance System database and used U.S. Securities and Exchange Commission filings to determine profitability for publicly traded firms. Comparing the two sets of data, Earnhart and Rassier found that when regulations are strict but enforcement actions are infrequent, companies are more likely to innovate and, thereby, increase their future profitability.

“If an environmental agency pushes hard on a pollution limit, but does not monitor the limit too stringently, the agency creates a space in which companies can be creative and discover ways in which they can either market their environmental protection efforts to customers and secure a bigger market share or find less costly ways of manufacturing their products or dealing with waste,” Earnhart, the lead author, said in a statement. “The regulations put a different pair of glasses on companies. By looking through a new lens, companies get creative.”

Specifically, in the case of the Clean Water Act, the researchers found that when wastewater-discharge limits were strict and government inspections were commonplace, profits declined; those results follow the conventional line of thinking, that regulation inevitably stifles economic growth. However, when enforcement actions and inspections were infrequent, companies tended to experience more profitability, a trend that is consistent with the Porter hypothesis.

Earnhart suggested that by working to reduce discharged wastewater, companies more thoroughly examined their operations and created new, more efficient management practices. Moreover, the ability to market themselves as environmentally friendly may have helped them achieve a larger market share, Earnhart said.

“With a new perspective and with new information, these companies could find a way to defy conventional wisdom,” Earnhart said. “Any agencies working on clean-water or clean-air regulations should be concerned about how they induce compliance and what the trade-offs are. If there is a win-win situation, everyone should want to learn about it.”

Know More About Business Continuity Plan

unduhan-67As a business owner, you don’t want the first time you think about disaster recovery to be during an actual disaster. After a fire, flood or data loss, being prepared will hopefully decrease the damage done by the event, and get your business back on track sooner.

One of the best things you can do to prepare yourself is develop a disaster recovery or business continuity plan.

“Small businesses are vulnerable to failure when they’re impacted by significant events,” said Ken Katz, property-risk-control director at Travelers. “You’ll need to recover in a timely fashion, because your fixed costs continue even when you can’t open your doors.”

Factors to consider
If you don’t plan for a disaster before it happens, you’ll have to do it on the fly and make decisions when you’re stressed, Katz said. But what should actually go into your plan?

John Wise, CEO of Investcloud, a provider of cloud-based financial software and apps, said that disaster plans should assess and create plans for different scenarios both short and long term.

“They should detail key leaders and decision makers, backups and alternative forms of communication if cell towers go down or there is no power,” Wise said. “It’s ideal to have two alternate data centers — one close to access in person, and one far in the event of a larger-scale disaster.”

Thomas Phelps, CIO and VP of corporate strategy at enterprise content management company Laserfiche, said business owners make a few key mistakes over and over in their emergency-preparedness plans:

Not accounting for loss of critical people nor planning for the stress and trauma of staff
Not making the emergency plan accessible at the office, or making plans that are too generic, too detailed or stale
Failing to address communication choke points and having PR issues related to recovery
No alternative emergency operations center (EOC) or recovery sites, or having physical access issues with alternate site
Believing that outside assistance and insurance will take care of everything
Before you finalize your plan, be sure to address these areas, Phelps said.

Creating a continuity plan
Katz recommended the following steps to develop a formal continuity plan for your business:

Assess your risks. Know the threats that could damage your business, and determine how they might affect you.
Prioritize business functions. Decide the order in which certain business operations will be restored in the event of an interruption.
Develop prevention and mitigation strategies. Come up with strategies around the most important functions to prevent and mitigate the types of disasters you may encounter.
When your plan is developed, have your team walk through the steps of your disaster recovery plan to test it out. Ensure that employees know what to do, identify areas that need improvement, and routinely check plans and make updates as needed to account for staff change and lessons learned, Wise said.

“Your employees are critical to your company’s success, so it’s important to realize this and show that same consideration to ensure their safety,” he added.

While this may seem like a lot of things to keep track of, these events do happen, said Katz, and it’s best to be ready for the worst.

“It’s not often, but given enough time, something will occur,” Katz said. “It’s not a do-over activity — you only get one chance to do it right. The more you can think through what [a disaster] will look like for your business, employees and community, the more you can help your growth down the road.”