CSR for Small Businesses or Small Businesses for CSR?

Jacquelyn Guderley (April 2014 On Purpose Associate) contemplates the relationship between Corporate Social Responsibility (CSR) and small business.

As an Associate who has recently joined the April ’14 On Purpose cohort, I was rather pleased with myself for signing up to attend a CSR Meetup event during my first week on the programme. The topic was CSR for Small Business, led by Jill Poet, Managing Director from Organisation for Responsible Businesses.

While CSR is not a topic for which I have ever had particularly fond feelings, small business has quite the opposite effect on me. Like many, I frequently see CSR as a case of reluctant compliance amongst corporates — in the same way they have to make sure that everything is kosher for their yearly audits, so too is it recommended that they now tick at least a few of the CSR boxes. Why would we want to “infect” small business with CSR then, I thought? Why impose a compulsory sort of measure on them that loosely relates to a social enterprise mentality? Wouldn’t we rather small businesses were operating much like socially conscious businesses of their own accord? Why slap the “CSR” label on it at all?

Jill Poet did a fantastic job of shedding light on the idea of bringing CSR to small businesses — how it is done, why it needs to be done, and the benefits and barriers to successful adoption or engagement. She began the talk with a statement that resonated with me: “some CSR people haven’t got a clue”. This isn’t actually good news — Jill revealed that 45% of small and medium-sized enterprises (SMEs) don’t even know what CSR is! That’s a pretty staggering figure when you consider that of the 4.9 million private sector businesses in the UK, 99.9% of them are SMEs. The point of Jill’s talk, it would seem, was to prove that small businesses can have a CSR strategy. Typically, small businesses believe they have less reason to implement such a strategy because they:

• have limited resources that should be spent on traditional operations essential to running the business;
• are not continually scrutinised like corporates and multinationals are, and so they don’t need to impress people with news of social impact measurement and office paper made of elephant dung; and
• believe they are too small; and
• do not know how to go about implementing a CSR strategy, or understand what that means for small business.

But “No!” exclaimed Jill, “You’ve got it all wrong”. She believes that a robust CSR strategy for small (and large) businesses will:

• boost reputation;
• increase marketing opportunities;
• win contracts;
• improve staff engagement and motivation #feelgoodfactor;
• bring new skill sets to the workforce; and
• decrease overhead costs.

I’m ready to trust Jill. She was a wonderful speaker with clearly a lot of knowledge on the topic. But I’m not sure I agree that this is the right way to be thinking about the topic. She posited the idea that we need to “put that little bit of pressure on small businesses to adopt a CSR strategy” in the absence of the traditional public image pressures placed on multinationals. Agreed. But should we really be going in with the “quick buck” mentality, linking CSR to economic/business gain?

At the end of Jill’s talk, I posed this question: “Shouldn’t we be focusing on social benefit as a separate yet integral benefit for businesses (big or small), rather than making it just another facet of the bottom line?” Jill replied that “it’s all a long-term learning process of which the economic and operational benefits form just one small part.” That made me feel better. However, I still think more work needs to be done in this area.

We need to get our small businesses thinking and acting more like social enterprises (without actually throwing away their profit and financial benefit for their shareholders and investors) in order to stop CSR just becoming another tick box, quick win, or couple of rows on their financial modelling spreadsheets. Being small, I see their size as an advantage as it aligns them with the majority of social enterprises. In my view, CSR isn’t about quick wins and the bottom line; but for the most part it is still treated as though it were.

What we need is a kind of Social Small Business that sits between small biz and social enterprise. This is not a new idea, but it bears repeating. These Social Small Businesses exist, but may often be seen more as “socially focused businesses”. But if you flip this around, these Social Small Businesses would just be normal businesses, but in which a new socially aware mind-set was part of the very fabric of the company and its operations. JustGiving is one example of an SME doing this, especially their start-up Yimby which crowdfunds for social good in your local community and does not currently operate for profit. However, we need to take this mind-set out of the charity, not-for-profit and social enterprise space and make small businesses social. Small business for CSR, not the other way round.