SEP 8, 2021 • Article
The Growing Importance of the Social Responsibility of Business
For a long time, many people believed that the only responsibilities of businesses were to maximize profits and appeal to shareholders. In recent years, a new school of thought regarding the social responsibility of business has risen to prominence, aiming to give back to communities and improve society. The idea of social responsibility implies that businesses should have an ethical duty to better the world around us, whether that be through environmental or philanthropic methods.
Many businesses have made social responsibility a critical part of their strategy, allowing them to improve society while creating a positive public image that can help with profits at the same time. Social responsibility is not only ethical; it can also serve to inspire employees and create a positive brand image. The social responsibility of business is traditionally broken down into four parts, allowing consumers to support businesses that champion causes that are most important to them.
Why Social Responsibility Is Important
As consumers, supporting a company that engages in social responsibility allows you to have a role in addressing societal and environmental issues. Additionally, supporting a socially responsible business shows that consumers value brands that stand up for what's right, incentivizing other businesses to become socially responsible as well. Social responsibility could also be a great way for workers to find businesses they want to work for, as prospective employees can be attracted to a business that is supporting a cause that is close to their heart. Although it's important for businesses to give back to society, it's also important for consumers to support socially responsible businesses and ensure they stay in business.
When people first think of the social requirements of businesses, environmental responsibility is likely the first duty that comes to mind. Environmental responsibility is the idea that businesses should be as eco-friendly as possible, undertaking actions such as reducing carbon emissions, lowering reliance on non-renewable resources, and offsetting any negative impact the company has on the environment. An environmentally responsible company promotes recycling, invests in renewable energy, and reduces waste.
Environmental responsibility is rooted in the idea that ecosystems should be protected and preserved, helping to combat issues such as global warming, deforestation, and the depletion of natural resources. Consumers looking to lower their environmental impact and get involved should look to support businesses that have sustainability initiatives or other positive environmental policies. Our planet provides all of us with a home and resources to survive, and environmental responsibility helps ensure that it will be around for future generations to enjoy.
Ethical responsibility is the expectation of a business to go above and beyond the law to practice moral business strategies. Although legal requirements and regulations may not force a business to do something, some will practice ethical responsibility to meet societal expectations. Businesses engaging in ethical responsibility provide employees with a raised minimum wage and better benefits. An ethically responsible business sources materials that meet free trade standards, and larger businesses ensure that products purchased are created ethically with no traces of child or slave labor.
Consumers that are looking to ensure that the products they're purchasing are ethically made should research businesses to see what steps are being taken to provide employees with comfort. When a consumer supports an ethically responsible business, they are signaling to companies that they care about how a product was made and the well-being of the workers that made it.
Philanthropic responsibility is the duty of businesses to give back to their local communities and actively work to make the world a better place. Meeting philanthropic expectations requires businesses to make donations to community fundraisers and other local projects. Businesses that dedicate themselves to their philanthropic responsibility may even donate a flat portion of their earnings to charitable causes, meaning that for every sale completed, a percentage of proceeds will go towards donations. Another unique form of philanthropic responsibility is starting a new charitable cause or organization as an extension of your business.
When a consumer supports a philanthropic business or organization, they are actively contributing to a charitable cause and showing other businesses that philanthropy can be used as an effective marketing tactic. Consumers that are looking to get even more involved with a philanthropic business can volunteer for fundraisers the business hosts or make direct donations to the business's charitable organization. A philanthropic business experiencing success encourages other businesses to reinvest their profits into the communities that made them successful in the first place.
When running a business, you have a responsibility to make economic decisions beyond maximizing your profits - a practice referred to as economic responsibility. Under economic responsibility, you should analyze how the ways your business spends money affects the world around you and prioritize making financial decisions that make the world a better place. For example, rather than taking a cheaper deal somewhere else, your business may prioritize working with other small businesses and establishing a solid partnership that helps your local community grow. Your business could also engage in economic responsibility by pledging to use products made only from recycled materials, reducing the number of materials your company consumes.
While the goal of almost all businesses is to turn a profit and remain operational, the economic responsibility of business reminds us that it is critical to use some of those gains for good. As a consumer, you can support businesses that prioritize reinvesting profits into the local community, rather than outsourcing to slightly increase their bottom line. Supporting a business that shows it cares about its customers and the community around them is important to get more businesses to take up their economic responsibility.
Social responsibility is a vital factor in growing your business and improving the state of the world around you. When businesses honor their social responsibilities, they make progress toward lofty goals. Doing so contributes toward feats such as slowing global warming or introducing societal changes for the better.
As consumers, it's important to support businesses that engage in social responsibility and go through with their promises. Research businesses and see exactly how they are being socially responsible, and ensure companies aren't greenwashing for the sake of public relations. Supporting socially responsible businesses is the best way to get social responsibility to stay around and be adopted by other businesses. If consumers respond to socially responsible initiatives from companies, maybe someday social responsibility will be normal and expected for all businesses.
Learn more about important sustainability issues.
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