Socially responsible business

Any company strives for a maximum efficiency, which allows for producing and selling quality products. However, the activities of commercial organizations also have a pronounced social component. The social responsibility of business in the economy is the proper quality of goods and services, a high level of production safety, normal working conditions for personnel and so on. The management theory still has no classical definition of the social responsibility of business. The meaning of this concept in many cases is perceived very subjectively, however, its main characteristics can be singled out. Unlike legal, social responsibility does not presuppose rigid norms.

It is businessmen’s voluntary duty to pursue a policy, to make decisions and to follow areas of activity, which are desirable in terms of the goals and values of the society. In other words, it is a kind of social contract between business, consumers and authority, whose goal is to contribute to the well-being of the whole society.

Criteria for assessing the social responsibility of a business may vary depending on a number of factors. For example - in which region does the company operate, what is its magnitude, capital structure, etc. The criteria can be an assessment of environmental protection, the quality of goods and services produced, relations with workers, activity in various charitable programs, etc.

Apparently, the higher the level of development of the society - the more stringent these criteria would be. Under the influence of external factors, the organizations are forced to become information-transparent and socially responsible. However, this gives the business significant advantages. As the research shows, the financial indicators of those companies that incorporate social responsibility into their mission are significantly improving.

The specific economic benefits with this approach may be the following:

• sales growth and improvement of the market position; • increase in labor productivity; • increase in the value of the company due to an appreciation of its reputation; • facilitating access to investments; • weakening of control from the state bodies, etc.

Together with the members of our academy, we develop options and programs to support social projects and methodology for implementing social initiatives

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Ethical indices

To assess the social responsibility of corporations abroad, there are special ethical indices. Companies are included in them according to three main criteria: the effectiveness of environmental protection activities, the quality of relationships with employees and shareholders, and respect for human rights. Ethical indices serve as a benchmark for SRI-funds (socially responsible investments).

One of the packages of ethical indexes is FTSE4Good. To get into it, the companies that have a significant impact on the environment must fulfill a number of requirements. In particular, to undertake obligations for its protection, as well as to publish reports on its activities in this field over the past three years. It is important to have an ethical code and a policy of equal opportunities for employees. In addition, companies must declare their commitment to human rights and the standards set by the International Labor Organization.

Many companies initially cannot count on inclusion in FTSE4Good. For example, tobacco companies, arms manufacturers and companies in the nuclear energy sector. Noteworthy that only 64 out of 100 leading British companies could get into the index FTSE4Good..

The International Standardization Organization (ISO) issued an ISO 26000 guidance in 2010, which sets out international recommendations for increasing the company's social responsibility. The basis of it is a transparent and ethical behavior that promotes the health and well-being of the society.

The ISO 26000 standard helps the company build and implement a long-term social responsibility strategy, regardless of the nature of the business. The ISO 26000 standard will assist in the development of all aspects of the company’s activities: from the work technology to environmental policy, sustainable development and infrastructure, as well as personnel.