We look to The Ethical Business Book (new edition) by Sarah Duncan to look into how CSR has evolved to what it is today. The way companies prioritize different levels of ethical behaviour depends on their overall strategy, and with this book extract we can see what’s new in the world of business ethics.
It is now widely accepted that businesses have responsibilities beyond simply making profit. But there are many chief financial officers who would prefer to ignore the moral debate. So it’s important at the very start to make both the ethical and the financial point. The case for adopting more ethical and sustainable business practices is a strong one, which includes driving long-term revenue, reducing costs, and managing risk.
This is a long-standing approach to social responsibility. It considers Corporate Social Responsibility (CSR) as part of a strategy where a company generates its profits without too much consideration for wider societal expectations. However, once the profit is generated, the company then distributes some of the value created to projects, activities and causes that are important to stakeholders. These activities will ultimately enhance the wider image of the company and bolster its brand identity. Ethical behaviour is therefore ‘bolted on’.
NEW BUSINESS ETHICS
Modern ethical businesses promote responsible behaviour as an opportunity to generate profits while at the same time living to expectations of society. Rather than unilaterally dishing out money, they work with stakeholders to understand their interests and expectations. Ethical and sustainable behaviour for these companies is integral, or ‘built’ to their core business.
Traditional CSR is now regarded as the old way – making profit and then doing something responsible with it. The new way builds ethical purpose into the company at the beginning of the financial year, not the end.
As Simon Sinek puts it in The Infinite Game, the old way is ‘making money to do good’, the new way is ‘doing good making money.’
|DRIVER||Image, Brand, Public Acceptance||
RELATION TO BOTTOM LINE
|No direct contribution||
High ethics = value creation
Purpose = profit
|EMPHASIS||Ethical behaviour is bolt-on||
Ethical behaviour is built-in
This book is a gateway to a fast-moving topic, which is why it has now been thoroughly updated with new material. It gets the reader started on all the important elements of ethical and sustainable business practice, but is deliberately concise, non-preachy and practical. If you are a business owner or leader, it will provide you with the tools to make a difference. if you work for an organization that needs change, it will give you the ammunition you need to lobby the decision makers and present a compelling case for long-term sustainability,
SARAH DUNCAN is a sustainable business development and ethical marketing consultant. She has been in business for over 30 years and has set up her own consultancy, Sleeping Lion, in 2005. She now helps businesses navigate their way through the world of business ethics and sustainability with advice, support and bespoke workshops. Find out more: ethicalbusinessblog.com
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