Why Small Businesses should be in the Spotlight

We all will have heard the statistics: 97% of FTSE 100 companies report on their Corporate Social Responsibility (CSR) activities (IIRC, 2011); companies in the FTSE 350 that practice and measure responsible business activities consistently outperform their peers that don’t (PR Moment, March 2015).

More businesses are reporting on their CSR activities than ever before. But what does Corporate Social Responsibility have to do with a small, private company?

For starters, small to medium-sized enterprises (SMEs) make up 99% of businesses and employ 60% of the private sector workforce in the UK (Department for Business, Innovation and Skills, 2013).

So if we are going to throw around notions of ‘inclusive capitalism’, ‘system change’ or ‘social mobility’ (by the way, the term ‘CSR’ has now been declared dead!) – SMEs are the place to start.

“SMEs genuinely recognise that employees are their greatest assets to business growth and competitive advantage”

As the largest network of responsible small businesses in the UK, we have found that ‘Corporate Social Responsibility’ doesn’t resonate with SMEs but employee engagement and values do. This is great news as adopting a culture of responsibility in a company is the holy grail of CSR.

So how do SMEs support a responsible culture? We’ve recently conducted research with over 200 businesses which shows that SMEs genuinely recognise that employees are their greatest assets to business growth and competitive advantage. And, with more and more new hires seeking an employer whose values match their own, an ethical culture naturally emerges.

“We’ve found that SMEs are also more agile in using social and environmental initiatives as a source of innovation”

This will often start with social and environmental responsibilities. A small business may be more conscious of the school that is around the corner from them because they are based in a more residential area. They may be more aware of how they are disposing of their waste or electronics because they do not have a corporate contract taking care of their waste disposal.

We’ve found that SMEs are also more agile in using social and environmental initiatives as a source of innovation. In fact, nearly half of our members bring it into their product and service design as a point of differentiation.

With around 5 million businesses in the UK, the combined power of small business engagement could be tremendous. Whether they call it CSR, employee engagement or inclusive capitalism – the final effect is the same: creating a private sector which contributes positively economically, socially and environmentally. A goal which we can all get behind.

 

Carolyn Housman is CEO of Heart of the City, the UK’s largest responsible small business network.

For more information on its research and work, visit: www.theheartofthecity.com. To get involved, contact: info_heartofthecity@cityoflondon.gov.uk.


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