With business now being conducted in a global context and with sustainability and environmental concerns high on the business agenda, corporate social responsibility (CSR) is becoming more important for management accountants to consider when it comes to strategy decisions.
Having a CSR policy functions as a built-in, self-regulating mechanism whereby a business can monitor and ensure its active compliance with the spirit of the law, ethical standards, and international norms.
Reflecting what a business represents and how it treats its suppliers, indeed impacting on whether it will do business with certain companies, a firm’s CSR policy needs considerable attention if it is not to conflict with the company’s aims and financial objectives.
Some critics argue that a CSR policy is little more than window dressing to appease a politically correct business environment, but it can be a powerful business tool that will actually improve the bottom line.
For example, consideration of CSR can be a useful way of cutting a company’s own costs, as there’s no better place to start being sustainable that at home. Whether costs can be cut via energy or in the use of packaging, even a 10 percent reduction would make a sizeable difference to overhead costs and a welcome addition to profits.
Similarly, a company with a CSR policy is likely to be able to engage with its customers and employers on a more regular basis and give both groups of stakeholders common grounds for engagement, which can only help the business itself.
Some business owners make the mistake of thinking that CSR is firmly in the domain of the large corporates, but this is an outdated notion. In fact according to the European Union, CSR can positively influence the competitiveness of SMEs.