Social and responsible businesses (SRB) are known to promote modern business practices that transcend conventional corporate giving models. As a result, these companies are positioned as influential drivers of worldwide transformation.
The SDGs require businesses to be open to meeting social and environmental needs. This involves overcoming the global and national barriers to socioeconomic progress. Corporations also need to implement more sustainable and inclusive processes. Presently, social responsibility is increasingly changing the role of corporations due to its ability to position companies at the forefront of global development.
Definition of Socially Responsible Businesses (SRB)
Socially responsible business can also be called sustainable business, corporate social responsibility, or responsible business conduct. This concept or model has gained prominence since the establishment of the SDGs. Essentially, SRB can be defined as a business strategy that aligns operations with the community’s long-term goals in terms of the economy, society, and environment.
Profitably satisfying shareholders’ demands while attending to stakeholders’ concerns is the goal of socially responsible businesses. Stakeholders include entities that are directly impacted by the company’s operations, both internal and external. Generally speaking, these groups are interested in the business and concerned about the impact of its decisions and activities. This comprises civil society organizations (CSOs), local governments, workers, clients, and suppliers, among others.
SRB strategy also works together with the Sustainable Development Goals (SDGs). Often described as the 2030 Agenda for Sustainable Development, these goals demand that companies interact with stakeholders and take the initiative to solve global concerns.
Businesses tend to benefit from SRB’s competitive edge. It allows them to better satisfy stakeholder, customer, and shareholder expectations by incorporating the SRB agenda into their plans and activities. Presently, customers and stakeholders are more aware of a company’s sustainability and inclusivity policies. The goal of SRB is to link commercial success with the well-being of the community.
What are Socially Responsible Businesses Known For?
In this section, we will consider some of the common characteristics and traits of socially responsible businesses.
a. Brand differentiation
Socially Responsible Businesses stand out for their strong reputation thereby setting themselves apart from rivals. More often than not, SRB practices tend to improve a company’s reputation and “brand” in comparison to competitors.
As we all know, enhancing a company’s reputation and brand image are fundamental business goals. Brand distinctiveness is a common defense used by businesses to support socially responsible activities. Essentially, this defense argues that a company’s brand strengthens its corporate image while enhancing its moral appeal.
b. Customer engagement
Secondly, socially responsible businesses are known to actively engage with customers to discover their concerns and provide high-quality products and services. There is an increasing desire to buy products and services from companies that practice social and environmental responsibility. In particular, consumers who adopt the SDGs are more interested in interacting with businesses that are held to a higher standard of external accountability.
According to a PwC survey, 78% of consumers were prepared to pay for the products and services of businesses that had committed to the SDGs. Moreover, the SRB Model encourages customer engagement by including concerns raised by larger consumer organizations like advocacy groups and volunteer watchdogs.
c. Risk Reduction
Lastly, businesses that adopt the SRB Model as a standard method of conducting operations encounter less risk when it comes to customer and other stakeholder relations. The development of goods and services with social responsibility can help guarantee that consumer groups’ concerns are taken into account.
Additionally, the model lowers the risks associated with unethical behavior or unanticipated events. This includes financial resource mismanagement, unethical behavior at work, and deadly accidents brought on by subpar workmanship or disregarding safety regulations. All in all, the SRB concept can help mitigate several possible threats that could impede a firm’s connections with its consumers and other stakeholders.
Conclusion
The contemporary global business landscape is undergoing significant transformation in response to pressing environmental and social issues. Hence, there is a shift in normative management practices and operations toward inclusive and sustainable development. Consequently, this demands that businesses align their business goals with sustainable practices that embrace society at large.
This piece was contributed by Peace Omenka at Pactman
