What are the advantages for an SME of committing its business to a Corporate Social Responsibility (CSR) approach?
For some, the company is an organization primarily designed to generate profit for its shareholders. In a famous article in the New York Times in 1970*, Nobel Prize-winning economist Milton Friedman asserted that a company's sole responsibility is to maximize shareholder profits. Yet there is a debate about the nature of corporate responsibility, beyond the sole objective of generating profits.
In the first half of the 20th century, other authors such as Dodd and Bowen, quoted in a Senate information report**, asserted that the company also bears a "social responsibility".
It's because we believe in Dodd and Bowen's thesis that we help our customers to embark on their ecological transition, easily and at our own expense, via our various services (Photo Carbone, Dividende Planète, solutions to reduce your emissions, voluntary carbon offsetting).
The European Commission defines Corporate Social Responsibility (CSR) as "thevoluntary integration by companies of social and environmental concerns into their commercial activities and their relations with their stakeholders "***. In other words, CSR aims to bring together, at company level, economic viability and positive impact on the environment and society, two dimensions that may appear (wrongly?) to be contradictory.
More concretely, ISO 26000 identifies 7 central issues that make up the notion of CSR:
Large companies must comply with certain legal and regulatory obligations, which increasingly cover the various ESG issues: publication of a greenhouse gas emissions balance sheet (BEGES), extra-financial reporting (notably via the European NFRD regulation, currently under revision), or even duty of vigilance with regard to subsidiaries and subcontractors (respect for human rights, corruption, etc.). To date, smaller companies are not subject to such extensive obligations.
This CSR approach is costly for companies, which often have to call on external firms to carry out a GHG emissions assessment, or implement specific control procedures to meet the requirements of ESG reporting. Some of them have set up a CSR department, entirely dedicated to monitoring these issues internally, and whose missions may vary, depending on the company's ambitions and the team's scope. Its missions can vary, depending on the company's ambitions and the team's scope. They can range from developing awareness-raising materials on CSR issues for staff, to finding partners to reduce the company's environmental footprint, to carrying out GHG assessments and extra-financial reporting (if the skills are combined within the CSR department).
This additional cost seems more affordable for large groups, with their greater financial and human resources, than for SMEs with more limited means.
The good news is that the efforts made by major companies are being rewarded. In fact, according to several studies, ESG commitment and performance go hand in hand. Thus, implementing CSR practices leads to a performance gain of at least 10% (and up to 15% if we measure profit per head), according to a France Stratégie study published in January 2016. This outperformance is also reflected in stock prices, as indicated by a Bank of America study, which observes an outperformance of 5 to 10 percentage points for companies most committed to CSR compared with benchmark indices.
SMEs, like large corporations, have many benefits to derive from their commitment to CSR.
Anticipating regulatory changes: By measuring their GHG emissions now, SMEs can anticipate possible regulatory changes: while the obligation to publish a Greenhouse Gas Emissions Balance Sheet (BEGES) only concerns private companies with over 500 employees, several initiatives are pushing for this obligation to be extended to SMEs. This measure has been proposed by the Convention Citoyenne pour le Climat, and stimulus plan credits will be conditional on measuring carbon footprint emissions.
Gaining market share: By adopting a CSR approach, SMEs gain market share (or simply keep it). More and more large groups and public bodies, themselves subject to CSR obligations, are integrating ESG criteria into their supplier and subcontractor selection processes. These heightened customer demands can lead to the elimination of suppliers (often SMEs) with the least commitment or the lowest ratings from ESG rafting organizations. For example, major groups are required to report on their supply chain management (in particular, they are expected to report on the following points: working conditions and respect for human rights at subcontractors, suppliers' environmental impact, etc.).
Strengthen your brand and promote it to customers and talent: By acknowledging their commitment and making it known, SMEs build customer loyalty and make themselves more attractive to their employees and to future talent and young graduates. Students are more demanding of employers and expect ESG issues to be taken into account (as demonstrated by the "Manifeste des étudiants pour un réveil écologique", signed by over 30,000 students).
Increasing the strength of its business model and improving its resilience: By taking the measure of ESG issues, and in particular climate challenges and the associated risks (physical risks, transition risks, reputational risks and liability risks), SMEs can identify the transformations needed to make the transition to a low-carbon model. This transition will require multiple strategic adaptations (eco-design of products & services, integration of possible carbon pricing, etc.), which it is preferable to launch voluntarily and turn into opportunities rather than suffer them as constraints.
Local roots: The CSR approach also enables a company to anchor itself in a local area, by creating close links with local stakeholders (town/county/region, schools/universities, supplier/customer ecosystem) and reinforcing its social acceptance.
The environmental dimension of CSR is gaining momentum as a result of heightened awareness of climate issues, due in particular to increased media coverage and greater demand from citizens and consumers (particularly among the younger generation).
That's what Keewe's all about, providing our customers with the tools they need to launch your transition. And we pay for your transition!
Keewe provides its customers with the Photo Carbone to easily measure your GHG emissions, with a view to aligning you with likely changes in regulations applied to SMEs. With the Photo Carbone, you'll be able to identify your main areas of CO2 emissions, and therefore your carbon exposure/dependence, to be taken into account in your ecological transition strategy (how to reduce this carbon dependence? how to turn it into an opportunity?).
What's more, you can finance your low-carbon transition via Keewe's Planet Dividend.
Finally, Keewe will provide you with the communication tools you need to make your CSR commitment known to your partners (customers, employees, etc.), particularly with regard to environmental issues.
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