Corporate Social Responsibility (CSR) is defined as an approach to business that delivers a positive impact on society – economically, socially and environmentally.

In practice CSR policies include initiatives such as switching to sustainably sourced products, investing in improving the local environment, and taking part in community events.

CSR is mainly used to formalise previously informal ways of boosting the environmental and social credentials of a company. It's largely used by huge companies, but SMEs can try out CSR too.

While CSR isn't designed to increase revenue, plenty of CSR initiatives can indirectly have a significant positive effect on profits. Here's how it's done.


Before you start off with CSR, you need to consider the current impact your business has on employees, the community, and the environment. Consider the following questions:

·         Is any aspect of your business (or supply chain) particularly damaging environmentally or socially?

·         How do your brand values fit with CSR?

·         What links does your business have the local community?

·         Does your business have any problems with employee retention and engagement?

·         How does your business manage its waste?

·         Are there any obvious and low/no cost improvements you can make to your processes to reduce waste and other environmental impacts?

Linking initiatives to profits

Few companies implement CSR policies because of true altruism – they do so because the indirect benefits of CSR outweigh any costs. These benefits include:

Reputation gain. Investors, potential employees and potential customers will look at your company more favourably if you're seen to care about the community.
Improved employee retention rate. If your employees take pride in their work, they'll be more likely to stay on – cutting your hiring costs.
Reduced energy costs. Many environmental CSR policies are aimed at cutting energy use.
Press and publicity opportunities. CSR initiatives are relatively easy ways to gain press and buzz on social media.
Gain an edge over your competitors. Shout about your CSR initiatives and use them as a selling point.

Next, you need set your priorities and plan specific CSR initiatives that meet your goals.

If reputation is what you're after, make bold steps such as vowing to pay all employees the living wage, or cutting your carbon footprint in half. To improve employee retention, consider offering employees perks such as flexible working hours or free fruit at work.

If you want to reduce energy costs, switch traditional bulbs for LEDs and pay a local business to install insulation or solar panels. For improved press opportunities, help create and run local events and make large periodic donations to employee-chosen charities.

To gain an edge over your competitors, take a look at how they approach CSR and go several steps further.

Measuring success

Because many of these benefits are indirect, it's a challenge to measure the impact CSR initiatives actually have on your finances. Energy costs aside, you may have to rely on anecdotal evidence and your instinct.

Big businesses might be able to afford to carry out in-depth cost benefit analyses on their CSR policies, but most SMEs must recognise that they won't be able to track their scheme's success in the same way.

Regardless, CSR is an area of business that holds promise for many SMEs. It can help bring your business into the 21st century and, alongside technology such as EPOS software, give you an edge over the competition.