SMEs are slower to integrate Corporate Social Responsibility (CSR) into their strategies. Statistically, there are far more large companies with defined CSR policies than SMEs. This may be because the requirements for large companies are greater in some areas, such as the Non-Financial Information and Diversity Law of December 29, 2018, which obliges companies with more than 500 employees to report on issues closely related to CSR.
The integration of Corporate Social Responsibility (CSR) is "voluntary," but it's true that there are increasingly more regulations and initiatives that "encourage" companies to be mindful of their impact on society, minimizing negative impacts and maximizing positive ones. And this applies to both SMEs and large corporations.
The benefit for SMEs can be even greater than for large companies in some aspects, such as differentiation, something essential in a market saturated with commodity products and services. Many reports, such as the 2018 Forética Report, "The Optimist's Reward," show that citizens are increasingly aware; that is, they are more concerned about environmental and social issues and therefore choose products or services from companies they consider "responsible.".
This differentiation is reflected in corporate reputation, and of course, it has a significant return for the company. Consistent and honest CSR can be the best and most effective marketing tool—I emphasize consistent and honest. Unfortunately, there are many examples of resounding business failures when a nonexistent or inconsistent "CSR" is sold.
SMEs that incorporate CSR into their strategy not only manage to build loyalty among customers, suppliers and employees, but also attract new ones—these conscious consumers we have already discussed.
Regarding employees, recent reports show that millennials want to work for responsible, committed, and transparent companies. They seek companies that prioritize innovation and ethics and are courageous in demonstrating their convictions and values. Studies show that millennials place greater value on social responsibility initiatives within their immediate surroundings, the community where the company is located, and that these initiatives are aligned with the company's business model—in other words, consistent with its values.
For SMEs, attracting and retaining talent is as important, if not more so, than for large corporations. Integrating CSR is the best way to increase employee engagement and foster a sense of belonging. Furthermore, SMEs can drive social change by training their employees in social responsibility and encouraging them to participate in the company's social and environmental commitments.
In line with the ideas outlined above, we can affirm that CSR is the best strategy for improving business competitiveness. As stated in the Spanish CSR Strategy (2014-2020), CSR is an attribute of competitiveness. It offers clear benefits for SMEs in areas such as:
- The advantages for the internationalization of the company
- To participate in public tenders (Law 9/2017, of November 8, on public sector contracts)
- Minimize operational and reputational risks
- To be perceived as more transparent and, therefore, more trustworthy
There are many reasons to be a responsible and sustainable SME, and few barriers. It's worth taking the time to consider the company's "purpose" and assess how much it can contribute to society and how much it can also receive from it.
Fountain: Responsible Vision