Is your business a good business?

There was a time whereby the question ‘Is your business a good business?’ would have referred to its commercial strength, current trading conditions, the type of work being undertaken or the quality of the clients you work with. But today, the context of this question is far removed from introspection and now refers more to the way the business conducts itself, its impact on the environment and how it supports its wider community of neighbours, staff, customers, and suppliers.

The importance of this aspect of running a business is gaining in prominence as we become more aware of a range of factors including the climate, mental health, wellbeing, natural resources and supporting the most vulnerable in our global society. Corporate Social Responsibility (CSR) has long been a watchword of larger blue chips, corporations and, more recently, financial services organisations; but it is increasingly appearing on the agendas of smaller boards around the World – largely driven by customer/consumer expectations.

So, what is a good business? and is it possible for smaller businesses with limited resources, restricted buying power and fewer employees to be ethically and environmentally good? Here are seven top tips to being a ‘good’ SME.

Top tips for being an ethically and environmentally good business.

  1. Consult – Before you set off changing your business and undertaking a moral crusade, ask your customers, staff, suppliers, and partners what good looks like and what experience they have of improving ethical and environmental credentials. Find out what matters most to your customers and how they perceive this changing in years to come, so you can build a roadmap. Set some realistic targets for yourself and maybe involve staff in the process to ensure buy in.
  2. Pay a realistic wage – Choosing to pay above market rate and not a de-minimis National Minimum Wage (NMW) is a simple step to adding social value because you are recognising the worth of your people, perhaps helping them to get on the property ladder, or just cope with the cost of living. It matters – just ask them!
  3. Support your community – Is there a cause or charity with common links to your business, your products or your customers that could benefit from your support? It doesn’t have to be financial. Volunteering, releasing staff to go and help charities or community groups, has become a popular way of delivering practical support which carries an in-kind benefit value to them and costs you, as a business, very little.
  4. Review your long-term sustainability – Do you rely on materials that have a finite life from a sourcing perspective or are hard to dispose of after use? Is consumer choice likely to move away from you? If so, can you switch to using more recycled/recyclable components, or use an alternative raw material with better environmental credentials? Changing materials is rarely straight forward so begin the process now, it may take some time to refine and find the right quality of product.
  5. Consider your carbon footprint – There’s a lot of discussion about Net Zero and it’s an admirable ambition but any progress towards reducing the carbon footprint of your business is to be welcomed. Can you source products closer to home, use green energy at your offices, reduce vehicle usage or switch the company fleet to electric vehicles? There are lots of ways to reduce your carbon footprint – making it a key consideration in the decision-making process is a great place to start. 
  6. Ethical sourcing – If you’re manufacturing a product using wood are your suppliers sourcing from FSC accredited woodlands or do they have a policy of replanting?  Are you happy that within the context of their regional culture, suppliers’ employment principles cut the mustard? Would you be happy taking a client to the factory? Choosing who makes up your supply chain is something you can control and therefore you have a choice to select those with high ethical standards, over those with a slightly more questionable moral code.
  7. Measure, audit and certify – Measuring how ‘good’ your business is can simply be through feedback from staff and customers – both will soon vote with their feet if they have strongly held beliefs and you’re not meeting their expectations. But if you’re looking for an official form of measurement, look at sector-based accreditations, ISO standards or even B-Corp status. Whether these standards become aspirations that guide you, or you choose to apply to become certified, they all provide a positive public message about the way you run your business and can be highly beneficial, reputationally.

Whilst holding your supply chain to a higher level of moral and environmental expectation can push costs up, the reality is that less environmentally friendly materials are likely to see their price increasing as they become less acceptable, or availability is impacted. Therefore, it might be a price you end up paying anyway and if you’ve consulted your customers and they’ve made clear it’s an important factor to them, they may be happy to pick up the premium for the peace of mind, if nothing else.

As you can see, being a socially responsible business does not have to consist of grandiose actions and large public displays of financial support and investment. It can be far more subtle, and the reality is most businesses and human beings tend to be innately good anyway – its just the fact that how society views and measures the concept of ‘good’ is changing and so we need to keep up to maintain competitive advantage.