Sustainability on a Budget

By Calvin Chu, a Partner at Eden Strategy Institute, LLP. Eden operates a social venture capital fund that invests in social enterprises that are aligned to its financial, environmental, governance, and social impact criteria to help them grow.

Executives at Small and Medium Enterprises (SMEs) are frequently strapped for cash, resources and time. They struggle with working capital, and find concepts of ‘fair trade’ or ‘biodiversity’ to be goals too lofty. Many tell themselves that only MultiNational Corporation (MNCs) have the capacity for Corporate Social Responsibility (CSR). We have learnt from working with hundreds of MNCs that they too feel the heat of intense internal competition for resources. SMEs now have an opportunity to do CSR, which does not involve simply giving money away. More MNCs are using cost-effective approaches to launch successful CSR strategies, which SMEs may also consider adopting.

Dollars and Sense

CSR champions may start by organising senior management visits to inspiring companies known for sustainability. Once interest is aroused, convincing reasons need to be raised to justify CSR initiatives. Even the few Chief Executive Officers (CEOs) that are not affected by ‘green fatigue’ tend to cautious of greenwashing. People may not share the same value systems, aspirations or notions about a company’s responsibilities.

Rather than persuading decision-makers from a moral imperative, ‘Sustainability Agents’ therefore do well to push the agenda from inside the system.

This involves using hard data such as costs, benefits, or risks as fact-based arguments, and framing arguments in language that resonates with accepted management goals: product innovation, operational efficiency, brand differentiation, or employee retention.

Make it personal.

CEO sponsorship lends credibility, legitimacy, and mobilisation power to sustainability initia- tives. Once endorsement has been obtained, Sustainability Agents can facilitate action by forming teams and challenging the status quo to articulate clear goals. They can highlight the personal benefits of getting involved, which include a sense of duty, career visibility, and formal recognition. A useful way to gain immediate traction is to start small, creating action with ‘quick wins’ such as an office recycling programme, changing to energy efficient light bulbs to shrink utilities bills, or setting up carpools. This will build team confidence to attempt more ambitious objectives.

… then make it last.

Many ‘big bang’ initiatives tend to fizzle out. Successful social innovation needs to impact the day-to-day jobs of all staff. For instance, marketing personnel need to build the firm’s socially innovative product features into the collateral and sales pitch, to help resonate with customers’ aspirations. If Human Resource departments recognise that more ‘activist’ employees tend to be more passionate about their jobs, they can emphasis the company’s social responsibility as a unique selling point to potential recruits.

Similarly, operations and procurement teams can reduce supply chain risks by only purchasing from socially responsible suppliers who are less likely to face worker strikes or safety scandals.

Once Social Innovation has been infused into the Strategy DNA of an organisation, metrics and benchmarks can be instituted to sustain the profit impact into the long-term. Best of all, these approaches are not only cost-effective but will prove to soon deliver lasting shareholder value.