The Benefits of being a Sustainable Business

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As a business owner, you will have your own reasons why you are interested in operating a responsible business.

For some, it may be an integral part of your business from the very start, for example if you run a 'social enterprise' or 'ethical business', whilst for others, it may be an important influence on your mainstream practices, which will form your approach to 'corporate social responsibility'.

In both circumstances, there are important reasons why social responsibility can make good business sense, as it can put you at a great competitive advantage over other businesses. Read on to find out why..

There is growing body of evidence to illustrate the value of social responsibility as a way of delivering competitive advantage. This is no better demonstrated when viewing the success of those social enterprises who are competing effectively against much larger rivals due to their possession of superior social responsibility or 'social resources'. This demonstrates an opportunity for other small/medium sized enterprises that are yet to harness the true value of social responsibility. The benefits of such an approach are outlined below by our expert adviser Bob Doherty:

Reputation Management 

A company's reputation has a significant impact on a company's credibility which is proven to influence purchase intention of consumers and other buyers.

For example: When tendering for contract services, procurement practices in the public sector view other social/environmental dimensions in addition to price as critical success factors; And Coffee chains such as Costa and Starbucks are increasingly introducing and promoting fair-trade coffee brands in response to consumer trends and tastes.

This management of reputation enhanced by social responsibility can lead to growth in both brand value and equity. The consistency of behaviour and ethical commitments are seen as vital in this management of reputation and brand personality.

Financial Performance 

A mistake some companies make is the view that Social Responsibility is a cost, we propose that Social Responsibility should be viewed as an investment in a strategic asset. For example good environmental Management, energy efficiency to reduce CO2 emissions, effective waste management, sustainable product innovation and local community engagement can result in improved financial performance.

Risk Management 

86% of institutional investors believe that social & environmental risk management has significant impact on company's long term value. The investment community increasingly considers a strategic approach to social responsibility as a proxy indicator of good quality management. This is obviously important when trying to access capital.

Employee Satisfaction 

Three in five people want to work for a company whose values fit their own. Those organisations who are involved in community action programmes have experienced increased workforce motivation leading to improved employee retention. In a competitive recruiting environment having a positive impact on recruitment and motivation of employees is crucial. There is a growing body of evidence to indicate that increasingly a rising number of people are making key choices based on companies and their position on social responsibility.


Four in five business leaders believe that responsible companies are more innovative. New product development, supply chain innovation, cleaner technology, sustainable products, waste management, fairtrade are all areas where small medium sized enterprises are innovating via social responsibility.

These business drivers need to be integrated into the strategy of an organisation and developed to result in superior financial performance.

Customer Loyalty

Social Responsibility is increasingly on the consumer agenda, and individuals are showing a loyalty to brands that are in-tune with their own beliefs. Businesses are increasingly competing for customer loyalty which is built on trust, service and values. Highlighting an organisation's commitment to responsible business practices can maximize the role of Cause Related Marketing to gain competitive advantage, to raise awareness and generate buy-in around the organisation's cause to ultimately attract a loyal customer base.


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