Digging into the bigger whys behind corporate social responsibility efforts
New research confirms that small and medium-sized businesses, like Ian Martin, aren’t just taking on social and environmental causes in an attempt to indirectly boost their bottom lines.
A recent research article by a team of academics from the University of Waterloo raises some interesting observations about the motivations at play for small- and medium-sized enterprises (SMEs) who choose to invest in the greater good of their communities and the world.
In doing the research for their article, Conceptualizing businesses as social actors: A framework for understanding sustainability actions in small‐ and medium‐sized enterprises, the authors looked at the underlying drivers of social and environmental efforts of SMEs . They dove deep into data from over 1,600 Canadian SMEs and conducted complementary in‐depth interviews with a variety of companies, including Ian Martin. What they discovered was that the motivations of SMEs paint a picture that’s got many more shades than just the green of cold, hard cash.
Traditionally, SMEs have been viewed by society as “rational actors,” a term used to describe organizations that calculate costs and benefits in a deliberate pursuit of profits. The overarching goal of efforts for these types of companies is growth and profit. If rational actors choose to invest in environmental or social causes, the assumption is that they are doing so because there will be some sort of economic gain as a result of their efforts. Costs savings from energy reduction initiatives and greater employee engagement as a result of charitable giving campaigns are two examples of this type of thinking.
But business is changing and things are no longer so black and white. Realizing this, the authors of the article set out to identify some of the other factors that motivate SMEs to become involved in environmental and social causes. The research findings challenge the common assumption that SMEs primarily see sustainability as a way to cut costs. Today, many SMEs are even more powerfully motivated by building a good reputation within their community and aligning business operations with their personal values.
The authors rely on the concept of “social actors” to characterize organizations that are capable of seeing beyond the balance sheet as they define their business, set intentions, make and act on their decisions and hold themselves accountable for their actions. They identify four dimensions that influence the actions of social actors:
- The intentions, identities, beliefs and aspirations of individuals within the organization
In interviews conducted for the research, every single respondent referred to personal values as an important factor behind their company’s adoption of sustainability goals, including aspirations to address climate change, advance social and gender equality, reduce waste and promote sustainable food production.
- The internal social relationships within the organization
When asked what value they placed on internal social agendas at their company, 89% of the firms surveyed perceived employee well-being as important.
- The network of external social relationships at play in the organization’s day-to-day operations
Of the firms surveyed for their research, 75% sited building good relations in their local area as either important, very important or extremely important. Whether through encouraging employees to be involved with local organizations and their causes or ensuring social and environmentally responsible sourcing through their supply chain, social and environmental agendas are shaped through strong external social relationships.
- The social environment, including the institutional landscape and social norms of the organization
Building a good community reputation was most often cited as the most important benefit associated with acting on sustainability found in the research.
While there’s no doubt that businesses must operate competitively in order to survive, this type of research helps increase awareness that growing the bottom line is no longer the sole objective for a growing number of companies. At Ian Martin, we believe business can and should be used as a force for good. As a Certified B Corporation, we are working with 1,600 other companies from 42 countries across the globe to redefine success in business. In addition to being financially successful, our B Corporation status means that we hold ourselves to the world’s highest standards for positively impacting our employees, our customers, our community and the environment.
If you’re currently looking for work and wondering if there are advantages to employment with a Certified B Corporation, here are some blog posts that will give you a better sense of how our B Corp status inspires us to do things a little differently at Ian Martin:
If you’re an employer and you’re curious if social responsibility is really on the radar of potential candidates, this blog post is well worth your time: Do Candidates Really Care About Corporate Social Responsibility?