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08 Oct

The Future of Responsible Business

Several-People-Sitting-At-Conference-Table-Thinking-About-Responsible-Business

Responsible business is known by many names, Corporate Social Responsibility (CSR), corporate conscience, corporate citizenship, and sustainable business among them. Regardless of the name the company chooses, it’s a process through which companies choose to take responsibility for their actions and strive for their activity to have a positive impact on the environment, employees, communities, consumers, and shareholders.

Corporate social responsibility often refers to measures taken by businesses that go beyond what is considered mandatory by law and ethical standards stated by regulating bodies and environmental associations. This can often result in short-term costs which don’t lead to immediate economic gains, but support and prioritize societal and environmental progress instead. The main focus of responsible business is to increase shareholder trust and boost long-term profits in an ethical and sustainable way by owning corporate decisions and working to improve them.1

We’ll explore how responsible business is constantly evolving to accommodate business, societal, and environmental changes and needs.

Types of Responsible Business

Responsible business can take many forms, each of which addresses specific issues. But the three main types of corporate social responsibility tend to be ethical, environmental, and societal (think community-based work).

Ethical responsible business: This area is primarily focused on providing everyone involved in the business, from entry-level employees to the customers, with fair treatment. These measures are usually self-imposed by the company because it’s the morally correct thing to do, rather than being dictated by the law. Examples of ethical business practices include paying higher wages, offering better employee benefits, equal pay for equal work, avoiding trading or working with companies that don’t meet fair-trade standards, or providing jobs to individuals who would otherwise have a hard time finding work. Companies like Lush, which refuses to perform animal testing for its products,2 or Ben and Jerry’s Ice Cream which uses fair-trade certified ingredients,3 strive to ensure that employees, shareholders, and customers all get the fairest deal possible.

Environmental Responsible Business: While harmful environmental effects were once dismissed as an unavoidable cost of doing business, pollution and global warming have become a societal and political concern across the globe. This is one of the most common forms of corporate social responsibility and initiatives in this area usually focus on two main areas: limiting pollution and reducing greenhouse gases. As society increasingly focuses on environmental issues, businesses that enact measures to reduce air, land, and water pollution increase their good standing in the eyes of the public while also benefiting society in general. Patagonia launched an initiative called Common Threads Partnership with a mission to “reduce, repair, reuse, recycle, reimagine.” This effort allows customers to trade in their Patagonia clothing for credit on new clothing. Then, this used clothing is offered in four outlets across the U.S. This initiative has helped to further the company’s recycling efforts by keeping Patagonia clothing out of landfills.4

Societal Responsible Business: Businesses can make visible impacts by engaging with their communities and actively bettering society. This type of responsible business is usually interpreted as charitable giving, but it’s much more than that. Philanthropic options include investing in the local community and getting involved in local projects, which works to support the community in meaningful ways that go beyond simply hiring locals. By investing time, funds, and effort into the community, companies foster loyalty with employees and benefit from a better support system. Google has a well established track record of corporate philanthropy. They run multiple charity programs that have provided millions in grants and investments, not including their $1 billion commitment to help make a global impact on education, economic opportunity, and inclusion, as well as close the learning gap globally.5

Why is Responsible Business Important?

In a world where consumers voice their opinions with their dollars, responsible business is now taking center stage. Companies have begun to leverage their ethical dealings and moral code to enhance their reputations and differentiate themselves from the crowd. Responsible business programs increase brand reputation and help create a better public image. Additionally, customers increasingly want to spend their money at businesses that reflect their values and concerns. So, companies that respect and appreciate this desire develop deep consumer loyalty.

Responsible business practices can also help companies’ bottom lines in ways they hadn’t anticipated. New efforts can often lead to businesses reviewing and reevaluating their current processes. A company may find that they save millions by initiating energy saving programs for environmental reasons. For instance, PepsiCo cut water usage by 26 percent and saved $80 million between 2011 and 2015.6

Lastly, responsible business can also increase employee engagement and job satisfaction. Much like customers, employees want to work for a company that’s involved in initiatives that they care about. Responsible business practices forge a true sense of community and bonding among employees. When companies provide benefits such as higher wages, equal pay, additional vacation time, or tuition reimbursement, employees feel much more loyal to their employers. For instance, Costco’s business practices center around a “connection culture” that focuses on communication, valuing people, and giving people a voice. This, combined with providing employees with a higher than average salary and excellent benefits, has helped build an extremely loyal and happy workforce.7

Companies who show a true dedication to conducting business fairly, improving their local communities, and bettering the environment tend to attract top investors and valuable employees.

What Is the Future Of Responsible Business?

We currently sit at a point where consumer and market led changes are accelerating a transformation toward cleaner, healthier, and more socially inclusive business practices. According to Forbes, over 90% of the world’s biggest companies today report on their sustainability performance using standards developed by GRI (the most widely adopted framework for sustainability reporting.)8 As social awareness grows, companies have started creating roles that are dedicated to constructing and implementing responsible business practices. These roles are available at the junior and senior levels and have responsibilities that range from community relations to reviewing the supply chain to find a more sustainable and responsible way to do business.

Business as usual is no longer enough for a company to truly thrive. A strong commitment to responsible business can protect and enhance a company’s brand, create a more positive working environment, boost profits, and attract top tier talent.

Consider how an Online MBA from California State University, Monterey Bay, with its curriculum’s focus on responsible business, can help lead conversations about corporate initiatives that extend beyond profit and seek to benefit society and the environment as well.


1 Retrieved on September 12, 2019, from thegivingmachine.co.uk/corporate-social-responsibility-simple-guide/
2 Retrieved on September 12, 2019, from.lushusa.com/article_fighting-against-animal-testing.html
3 Retrieved on September 12, 2019, from benjerry.com/values/issues-we-care-about
4 Retrieved on September 12, 2019, from patagonia.com/blog/2011/09/introducing-the-common-threads-initiative/
5 Retrieved on September 12, 2019, from google.org/billion-commitment-to-create-more-opportunity/
6 Retrieved on September 12, 2019, from environmentalleader.com/2016/09/how-pepsico-saved-80-million-by-cutting-water-use-26/
7 Retrieved on September 12, 2019, from smartbrief.com/original/2017/08/3-factors-make-costco-americas-best-employer
8 Retrieved on September 12, 2019, from forbes.com/sites/georgkell/2018/06/18/the-future-of-corporate-responsibility/