20 Apr What is a responsible business?
April 24 – 28 is Responsible Business Week 2017, but what is a responsible business?
“Conscious consumption” is on the rise. People are seeking ways to make better decisions about what to buy, and responsible brands like TOMS are becoming household names.
In the UK alone, ethical sales grew by 8.5% in 2015 and the market for ethical purchases was values at £38 billion.
As consumers become even more concerned with environmental and social issues, and aware of their own spending power to influence these issues, it’s more important than ever for businesses to consider their ethics and values.
Responsible Business Week (24-28 April 2017) is now in its fifth year. Organised by Business in the Community, it is an awareness week for responsible business, and claims to give a “high profile opportunity for businesses and organisations of all sorts to demonstrate the many ways that they can work together to turn ambition into positive action for a fairer society and a more sustainable future”.
At #EthicalHour we believe in bringing together ethical businesses of all different shapes, sizes and social purpose to create positive change, so we’re welcoming the opportunity to celebrate and promote responsible businesses.
What is a responsible business?
There are many different types of responsible business, so we’ve been taking a look at some of the different structures and what they mean…
Corporate Social Responsibility
Corporate Social Responsibility (CSR) refers to business practices that benefit society. Private businesses are owned by individuals or shareholders and exist to make a profit for the people who own the company.
They may engage in CSR activities, which might involve giving some profits to charity, implementing more environmentally friendly business operations or running volunteer events for their staff to participate in.
As consumer awareness about global social and environmental issues continues to grow, so does the importance these consumers place on CSR when choosing where to shop. CSR strategies are also becoming a bigger factor for employees when choosing where to work.
Many businesses and corporations take CSR very seriously, but their primary mission is to make money.
There is no legal definition of a social enterprise. It is a business model which balances making a profit with a social purpose, and applies to a range of different sectors and industries.
Social enterprises reinvest their profits into a social or environmental mission, rather than stakeholder gain.
The term social enterprise refers to the purpose of the business, not its legal structure. To find out more about social enterprises, read our guide to “What is a social enterprise?” here.
Not for profit/Charity
A not for profit corporation is an organisation that exists for a purpose other than making profit. They are often dedicated to a social or environmental cause, or advocating for a particular point of view.
As a business structure, they use surplus revenue to further achieve their purpose or mission, rather than distributing it to shareholders or business owners.
There are many different types of not for profits and charities, and these can be complex legal structures with heavy regulations and different tax structures, depending on where they are located.
B Corps are for-profit companies certified by the non-profit organisation B Lab, which seeks to create a global movement of people using business as a force for good.
There are over 1,600 certified B Corps around the world in over 120 industries. To become certified as a B Corp, a business must meet rigorous standards of social and environmental performance, accountability and transparency, and aspire to solve social and environmental problems.
According to their website, “B Corps is to business what Fairtrade is to coffee” – their aim is to create a recognised standard for responsible businesses.
Ethical, responsible or conscious business
Ethical, responsible and conscious businesses may seek to benefit humans or the environment, or may just be committed to causing as little environmental damage as possible.
They may take one of the legal or organisational structures detailed above, or may just incorporate their ethical values into the way they do business.
It is generally accepted that the product or service of an ethical or conscious business should not be harmful to humans (including those involved in the production and supply chain), animals or the environment. They might also adopt more beneficial social or environmental practices.
Profit is still important to most ethical, responsible and conscious businesses, and most will subscribe to the triple bottom line business model of People, Planet and Profit.
Supporting responsible business…
If you’re running an ethical or responsible business, then you’ve come to the right place. #EthicalHour is the world’s first comprehensive online support network for social purpose businesses.
We connect social enterprises, ethical businesses and bloggers all over the world to support each other, learn from each other and maximise the positive social impact they make.
If you’re serious about taking your ethical business to the next level, join our exclusive FREE Growth Network on Facebook where you’ll have access to premium support and resources to help your business grow.
Connect with a global network of ethically-focused businesses, bloggers and consumers during the #EthicalHour Twitter chat every Monday.
#EthicalHour gives social entrepreneurs the platform to connect, learn and grow. Working together to reach our full potential, we can be the change we wish to see in the world.