Sensational Politics, CSR & Small Business

Wherever you’re reading this, it’s likely your news cycle has heavily featured the US Presidential election. Both candidates have strong fundamental opinions and policies when it comes to small business and how we get business booming in the middle of a global ‘bust’. Whoever is elected, we’ll find out in the next 48 hours, the impact on global business is likely to be significant in such economically fragile times.

The debates between the two candidates have featured a veritable boxing match of credentials as each candidate tries to assume the role of champion for the small businesses of America.

After the last debate, Forbes polled 658 corporate responsibility leaders to find out which presidential candidate, if successful, would be better for Corporate Social Responsibility. 30% said Obama, 20% said Romney, but 50% said neither candidate. They concluded that CSR is fundamentally bi-partisan because ultimately “corporate responsibility is being driven not by regulation, not by risk aversion or even risk management, but by the drive to find new competitive advantage.

Whether you’re in America, the UK, Europe or beyond, the question remains…Is Corporate Social Responsibility a necessity or a luxury for SME’s in a competitive and economically-tough market place?

In the wake of the global financial crisis high-level governmental representatives have recognized that CSR is more crucial in times of economically tough times. It has been suggested that CSR highlights the fundamental failure in values, the most recent example being the allegations against the News of the World with the phone hacking scandals, resulting in the closure of one of the UK’s most distributed newspapers. Due to recent events New International and the Murdoch empire reputation have been put into question. It is also believed that CSR is an important means for businesses to manage non-financial risks and maximize their long-term value.

There has been an array of comprehensive evidence behind the value of corporate social responsibility activities of large organisations directly impacting on their bottom line, you don’t have to look far to identify a few examples such as Marks & Spencer’s, Coca Cola and Unilever. More recently small-medium enterprises (SME’s) have been identified as also holding unidentified value to their bottom line figures through responsible business practices.

SME’s represent the backbone of the global economy as they constitute more than 90% of all businesses worldwide and employ more than half of the world’s workers. We believe that SME’s have the potential to supersede expectations providing more of an influential position within the supply chain of larger organisations through the identification, collaboration and the communication of key CSR activities enabling SME’s to be more attractive to work with on a long term basis.

It has been identified by the European Union that

Half of European SMEs are involved to different degrees in external socially responsible causes. The degree of involvement tends to reflect the size of the enterprise, ranging from 48% amongst the very small enterprises to 65% and 70% amongst the small and medium sized enterprises respectively.’ (EU Survey)

Corporate Social Responsibility is something that SME’s already do but they identify these practices with the use of different language. So if SME’s already carry out responsible business practice why investigate further?

The idea of the business case for SME’s measuring corporate responsible activities is to build on existing good practice and maximise their positive impact. Through the identification and communication around these issues both internally and externally it can provide SME’s with the competitive edge. This awareness of evolving issues can allow SME’s to control operational risk preserving the current value of the business.

Other benefits of responsible business practices that can add value are:

 Cost efficiency

 The creation of innovative business practices to run core business activities a lot more effectively.

 Responsible attitudes have to ability to send out powerful messages to key stakeholders therefore gaining trust.

There are a number of barriers that SME’s face that may discourage them to further build on good practice such as lack of time, motivation and resources and also the perception of community involvement is not related to business therefore not having the knowledge on how to build value to their bottom line figures.

However it is more likely that SME’s show less age discrimination than larger organisations and is more flexible to direct resources to socially responsible activities without the added cost of administration, as they are likely to be much more connected to their local community. There is also evidence to suggest that SME’s are likely to be willing to work with other organisations to create and further grow their responsible business practices, as their main priority like larger organisations is not publicity and brand advantage.

At the end of the day, it all boils down to your business and how seriously you want to engage with CSR and how deeply it is integrated into the heart of your business. Are you CSR driven because of regulation, risk aversion or because you genuinely see the competitive advantage in it? Does your SME know you are responsible? Are you maximising your value? And are you communicating this effectively to your stakeholders? CSR as symbolism or a path to success for SME’s ultimately depends on the ability to embrace the potential market advantage of such a path and the willingness to engage much and meaningfully in the principles of building people, planet and profit.


If you see the value of CSR in your business and want to know more on how Ethical Goods can help you to add value the bottom line figures and build on your responsible business practices, contact us at

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