sustainable business http://www.wisebread.com/taxonomy/term/14371/all en-US The Fundamentals of Socially Responsible Business http://www.wisebread.com/small-business/the-fundamentals-of-socially-responsible-business <div class="field field-type-link field-field-url"> <div class="field-label">Link:&nbsp;</div> <div class="field-items"> <div class="field-item odd"> <a href="http://www.openforum.com/articles/the-fundamentals-of-socially-responsible-business" target="_blank">http://www.openforum.com/articles/the-fundamentals-of-socially-responsible-busin...</a> </div> </div> </div> <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/small-business/the-fundamentals-of-socially-responsible-business" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock_000018038119Small.jpg" alt="Businessperson holding a plant" title="Businessperson holding a plant" class="imagecache imagecache-250w" width="250" height="166" /></a> </div> </div> </div> <p><i>Sustainability</i> is a hot button topic today. Even venture capital firms are betting on corporate social responsibility (CSR), as the broader topic is called. People are building on, and buying into, the premise that businesses are part of society and have a responsibility to create a better future.</p> <p>If you&rsquo;re starting a new business and intend to base it on a socially responsible model, it will pay you (literally) to fully understand the concept. You should also know, though, that some people don&rsquo;t like the idea. Keep reading, and we&rsquo;ll help you understand both sides of the story and offer five tips for starting a socially responsible business.</p> <p><b>What Is Corporate Social Responsibility and Sustainability?</b></p> <p>In <a href="http://www.wbcsd.org/web/publications/csr2000.pdf" target="_blank"><i>Corporate Social Responsibility: Making Good Business Sense</i></a>, the World Business Council for Sustainable Development defines the strategy as, &ldquo;&hellip;the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as the local community and society at large.&rdquo;</p> <p>One of the key themes of social responsibility is support for practices that meet the needs of the present without jeopardizing the future&mdash;sustainability. A business strategy based on sustainability is designed to balance profit, people, and planet (economic, social, and environmental) demands to create a desirable &ldquo;<a href="http://www.economist.com/node/14301663" target="_blank">triple bottom line</a>.&rdquo;</p> <p>But general agreement on what sustainability really means doesn&rsquo;t exist yet. Indeed, <a href="http://www.zerogrowth.org/sustaindev.html" target="_blank">some environmentalists consider sustainability an oxymoron</a> because, to them, sustainability and development are contradictory.</p> <p><b>The Argument in Favor of CSRs</b></p> <p>&ldquo;Doing good&rdquo; seems desirable, in principal, but is it a worthwhile business model? Although linking profits to abstract variables is tough, <a href="http://journalistsresource.org/studies/economics/corporations/corporate-social-responsibility-and-financial-performance/" target="_blank">a meta-analysis of 52 studies</a> concluded, &ldquo;...corporate virtue in the form of social responsibility and, to a lesser extent, environmental responsibility is rewarding in more ways than one.&rdquo;</p> <p>Market forces, researchers found, don&rsquo;t penalize companies that are high in corporate social performance, and the strategy <a href="http://www.openforum.com/articles/using-green-practices-to-market-your-business" target="_blank">can have a distinct positive impact</a> on market analysts, public interest groups, or the media. In other words, CSR does find its way to both the triple bottom line and the traditional bottom line.</p> <p><b>The Argument Against</b></p> <p>Using corporate resources for social purposes is a irresponsible waste of shareholder profits, some experts claim. Indeed, at least one critic thinks CSR is nothing more than socialism with a modern name.</p> <p>Nobel Prize winning economist Milton Friedman was a vocal opponent of CSR. In a <a href="http://www.colorado.edu/studentgroups/libertarians/issues/friedman-soc-resp-business.html" target="_blank">New York Times</a> article he wrote:</p> <p>&ldquo;<i>...businessmen believe that they are defending free enterprise when they declaim that business is not concerned &quot;merely&quot; with profit but also with promoting desirable &quot;social&quot; ends; that business has a &quot;social conscience&quot; and takes seriously its responsibilities for providing employment, eliminating discrimination, avoiding pollution and whatever else may be the catchwords of the contemporary crop of re&shy;formers. In fact they are</i>&mdash;<i>or would be if they or anyone else took them seriously</i>&mdash;<i>preaching pure and unadulterated socialism.&rdquo;</i></p> <p>Other critics suggest that even when companies make donations to charity, they&rsquo;re really just giving away shareholders&rsquo; money. Still others claim that CSR helps companies avoid regulations, inappropriately gain legitimacy, and wheedle their way into markets and the minds of decision makers. Some cynics even suggest that CSR lets businesses create bad solutions to social and environmental problems and then shift the blame to consumers&mdash;it&rsquo;s easier to spin than to change.</p> <p><b>How Do You Start CSR Business?</b></p> <p>If you&rsquo;ve found the argument in favor convincing, you don&rsquo;t have to have a business idea based on green energy or saving an endangered species to start a CSR. Do what you do best and keep the environment, work-life fit, poverty, healthcare, equality and other issues in the forefront. Be honest and transparent.</p> <ol> <li><b>Decide on what you&rsquo;re going to do</b>. Take a hint from 3M. They started making &ldquo;cool roofing granules&rdquo; which are four times more reflective than conventional roofing material so their product reduces heat absorption and, as a result, cooling costs.</li> <li><b>Educate yourself</b>. You don't have to have a college degree, but you do need to understand who your customers, competitors, and suppliers are. Talk to people who do what you want to do. Even consider working for them to learn the ropes. Join industry associations, and learn everything you can from them.</li> <li><b>Create a business and marketing plan. </b>Most entrepreneurs can describe their product in great detail, but don&rsquo;t have a clue who they&rsquo;re going to sell to, or how. Think through a marketing strategy that defines your target consumer and how you&rsquo;re going to reach them. <a href="http://www.entrepreneur.com/article/217768" target="_blank">The important part of your plan is the thinking, not the document</a>.</li> <li><b>Find money</b>. Your best bet is savings, friends and family, bank loans, &ldquo;angel investors,&rdquo; and formal venture capital sources&mdash;in that order. You might even find a <a href="http://www.grants.gov/" target="_blank">grant</a>. <a href="http://findingmoneyadvice.com/" target="_blank">Finding Money Advice</a>, a website I helped create, has the essentials.</li> <li><b>Execute</b>. Businesses usually fold because owners and managers fail to execute. Great ideas are a dime a dozen, but success is the result of making them happen.</li> </ol> <p><b>CSR Business Plan Considerations</b></p> <p>It&rsquo;s difficult to differentiate yourself merely with CSR. The barrier to entry is low; anyone can claim social responsibility.</p> <ul> <li>Your CSR efforts have to be aligned with your business or you will be seen as insincere.</li> <li>Consistency is crucial. Don&rsquo;t send mixed messages. Most of all, practice what you preach. You can&rsquo;t claim environmental friendliness, for example, and pollute at the same time.</li> <li>Make sure your CSR strategy is feasible. Walmart, with low prices and narrow margins, didn&rsquo;t lobby for higher minimum wages out of social responsibility; it was a competitive strategy to make it harder on the Mom &amp; Pop stores they compete against. Instead, they promote their efforts to &ldquo;go green&rdquo; by cutting energy costs and pressuring suppliers to be more fuel efficient. Some would say both seem predatory. You don&rsquo;t want to go there.</li> </ul> <p>Finally, follow the <a href="http://www.williamjamesfoundation.org/" target="_blank">William James Foundation</a> socially responsible business plan competition. They work with entrepreneurs at the idea and early venture stage to build social and environmental goals into their business. As they put it, &ldquo;there is no business to be done on a dead planet&hellip; By encouraging entrepreneurs who can both create their own success and show others financially viable paths to a more sustainable world, the William James Foundation is creating opportunities around the world for individuals to support for themselves, their loved ones, their community, and their planet at the same time.&rdquo;</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tom-harnish">Tom Harnish</a> of <a href="http://www.wisebread.com/small-business/the-fundamentals-of-socially-responsible-business">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/250-tips-for-small-business-owners">250+ Tips for Small Business Owners</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-5-best-credit-cards-for-small-businesses">The 5 Best Credit Cards for Small Businesses</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/100-ways-to-make-more-money-this-year">100+ Ways to Make More Money This Year</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/ramp-up-your-business-by-specializing">Ramp Up Your Business by Specializing</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-ways-to-protect-your-business-during-a-divorce">5 Ways to Protect Your Business During a Divorce</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Small Business Resource Center corporate social responsibility CSR small business sustainability sustainable business Thu, 29 Dec 2011 18:51:37 +0000 Tom Harnish 844415 at http://www.wisebread.com 4 Business Tips That Can Save the World http://www.wisebread.com/small-business/4-business-tips-that-can-save-the-world <div class="field field-type-link field-field-url"> <div class="field-label">Link:&nbsp;</div> <div class="field-items"> <div class="field-item odd"> <a href="http://www.openforum.com/articles/4-business-tips-that-can-save-the-world" target="_blank">http://www.openforum.com/articles/4-business-tips-that-can-save-the-world</a> </div> </div> </div> <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/small-business/4-business-tips-that-can-save-the-world" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock_000007618481Small.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="166" /></a> </div> </div> </div> <p>A few years ago I read an article in the Harvard Business Review that created a proverbial whack upside the head. Titled <a href="http://www.amazon.com/Road-Map-Natural-Capitalism/dp/B00005U01Y" target="_blank"><i>A Road Map for Natural Capitalism</i></a>, the article explains that we ignore one major capital component in our financial models &mdash; the value of Earth's services, nature&rsquo;s capital contribution to our success.</p> <p>We just don't think about, much less figure into our budgets &mdash; things like water storage, atmosphere regulation, and the other life-support services because Mother Nature is the vendor. These services have huge economic value. Some, in fact, are priceless because there&rsquo;s no known substitute. But because we don&rsquo;t count them among our resources, or for the most part haven&rsquo;t considered them at all, they&rsquo;re being liquidated.</p> <p>Here&rsquo;s the deeper issue: when resources seemed boundless, low per-capita productivity and a relative scarcity of workers drove innovations in technology and processes that led to increased productivity (the Industrial Revolution). Today we have lots of people and labor-saving machines, but natural capital is disappearing. In the same way the Industrial Revolution replaced agrarianism, a new era of natural capitalism, or whatever future historians decide to call it, will inevitably transform the way we do business now.</p> <p>The whack upside the head came when I realized that many companies today are looking for tradeoffs and consider economic, environmental, and social issues as competing factors instead of trying to integrate and optimize them. Carbon offsets are a good example of this &ldquo;whistling in the dark.&rdquo; Sure it might help, but it won&rsquo;t solve the problem because there really is a boogie-man out to get us. In the immortal words of Pogo, &ldquo;We have met the enemy and he is us.&rdquo;</p> <p>But the fight isn&rsquo;t over yet, and the article noted four key ways to build more sustainable, profitable, and competitive businesses.</p> <h3>Focus on Using Resources More Productively</h3> <p>Most businesses already do this because efficiency produces savings in operational costs, capital, and time. Such investments quickly pay for themselves, and in many cases the capital outlay actually goes down. But we haven&rsquo;t wrung out the possibilities &mdash; not by a long shot.</p> <p>A decade ago, fuel accounted for about 15 percent of airline operating expenses. Five years ago, it was 29 percent. Today, it's 35 percent. So Boeing&rsquo;s new 787, which saves airlines 20% in fuel consumption, is really going to help bottom lines. That said, the Chevy Volt takes the prize for efficiency &mdash; with four passengers it&rsquo;s <a href="http://en.wikipedia.org/wiki/Fuel_efficiency_in_transportation" target="_blank">more fuel-efficient than walking</a>.</p> <h3>Using Resources More Efficiently and Reducing Waste is Not Enough</h3> <p>We need to eliminate the concept of waste altogether.</p> <p>Closed-loop production systems modeled after nature, can be designed to return harmless unused by-products to the ecosystem or create valuable resources for other manufacturing processes.</p> <p>Lumber mills used to use sawdust to fire the boilers that ran their saws, for example. A couple of decades ago a company that made buttons sold off the chaff punched out of the holes as &ldquo;gravel&rdquo; for fish tanks.</p> <p>All steps in the right direction, but <a href="http://indigodev.com/Kal.html" target="_blank">an industrial park in Denmark</a> leads the way &mdash; take a deep breath if you&rsquo;re reading aloud.</p> <p>A plasterboard factory uses excess gas and bio-treated waste water from a refinery to sell a pure sulfur by-product and gypsum produced from the sulfur scrubbed from the stacks of power plants to both the refinery and the power plant and hot salt water to fish farms which sell the stuff at the bottom of the ponds as fertilizer to local pig farms that also use sludge (a combined total of a million tons a year) from a pharmaceutical plant which uses electricity and waste heat from the power plant. How&rsquo;s that for industrial symbiosis?</p> <h3>Value as a Continuous Flow of Services Instead of Sporadic Sales of Goods</h3> <p>Today, manufacturing is based on the sporadic sale of goods. Instead, we can deliver value as a continuous flow of services. By reducing inventory and revenue fluctuations, disposal liabilities, and other risks, it&rsquo;s possible for both seller and buyer to get what they want cheaper, more efficiently, and in a more durable manner.</p> <p>People want solutions not products. Lease plants for interior decor instead of selling them. Sell illumination, not lightbulbs, the authors of the article suggest. But, they also acknowledge, &ldquo;This model entails a new perception of value, a move from acquisition of goods as a measure of affluence to one where well-being is measured by continuous satisfaction of changing expectations for quality, utility, and performance.&rdquo;</p> <p>Changing people&rsquo;s values is never easy, but it can happen. For example: Do you still think a &ldquo;woman&rsquo;s place is in the home?&rdquo; Do you think a lifetime career with one company is desirable? Do you worry about the cost of a telephone call across the country?</p> <h3>Reinvest in Natural Capital</h3> <p>Any good capitalist reinvests in productive capital; it&rsquo;s good business. Companies are finding exciting and cost-effective ways to restore and expand the natural capital directly required for operations and indirectly in ways to sustain their supply system and customer base.</p> <p>Innovative companies are already changing their strategies and developing a competitive edge. Former Dupont CEO and Apple board member, Edgar Woolard, put it this way, &ldquo;Companies that adopt these principles will do very well, while those that do not won't be a problem, since ultimately they won't be around.&quot;</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tom-harnish">Tom Harnish</a> of <a href="http://www.wisebread.com/small-business/4-business-tips-that-can-save-the-world">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/250-tips-for-small-business-owners">250+ Tips for Small Business Owners</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-5-best-credit-cards-for-small-businesses">The 5 Best Credit Cards for Small Businesses</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/101-ways-to-save-money-around-the-house">101 Ways to Save Money Around the House</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-ways-to-protect-your-business-during-a-divorce">5 Ways to Protect Your Business During a Divorce</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-smart-ways-to-get-a-small-business-loan">10+ Smart Ways to Get a Small Business Loan</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Small Business Resource Center cost cutting energy efficiency green business natural capital small business sustainable business Wed, 03 Aug 2011 19:17:27 +0000 Tom Harnish 629791 at http://www.wisebread.com