80 • 100 GREAT BUSINESS IDEAS
By making decisions that take into account potential social
and environmental issues, companies can increase their popularity
and revenue while decreasing hostility from regulators and local
communities.
The idea
Although the benefi ts of corporate social responsibility (CSR) have
long been known by community-minded companies, recent years
have seen a dramatic increase in businesses focusing on their
social responsibility, with everyone from organic food companies
to clothes retailers realizing the advantages of being welcomed and
accepted in the communities they serve.
Organizations such as the Co-operative Group and cosmetics retailer
The Body Shop have built their businesses on a foundation of CSR.
Consequently, they have gained a strong reputation of “ethical”
business practices that differentiates their brand. Other companies
such as oil fi rms and tobacco companies that have traditionally been
associated with issues such as pollution or ill health have engaged
in overt ethical initiatives. However, unless these initiatives are
sincerely refl ected throughout the organization, they can be no more
than a publicity stunt to divert attention from unpopular activities.
CSR can provide companies with a “license to operate.” By acting as
good corporate citizens they can avoid interference from governments
and ensure they remain welcome. It has become an essential element
of risk management strategy—a well-respected brand cultivated over
decades can be destroyed rapidly by a CSR scandal.