During week 9 Corporate Social Responsibility was on the agenda and Sheila Killian introduced us to this subject.My understanding of CSR is that it is not feasible for companies to operate in this day and age with the attitude that the profit margin is everything.Companies now have a responsibility to other parties apart from their shareholders.Examples of these parties would be employees,suppliers,locals,local authorities etc.CSR would not have been a welcome concept to corporate management in the 80s and 90s.At that time it would be seen as a further expense that cuts into profit margins but as time goes by there is a realisation that with the correct implementation this could be a positive for commerce.
There is no doubt but people are becoming more and more environmentally aware by the day and given the choice they will do the right thing.By this I mean if they have a choice of two products,one of which is produced in a more environmentally friendly way than the other they will choose the green product.Research shows that people are willing to pay more for a product of similar quality to a standard product if they believe it has been produced in more responsible way.There are similar advantages to being perceived as a good employer and contributor to the surrounding community,it builds up a reserve of goodwill towards the company that can be drawn on if things go wrong.Young people are now more aware of our responsibilities to the environment and young graduates are looking to work for companies with a good track record in this area.
When companies get their CSR policy wrong it can be a very damaging and costly mistake,an example of this is Shell and how they mismanaged their relationship with the people in Bellanaboy in west Mayo.There was no proper consultation with local people about the installation of an underground high pressure pipeline carrying raw gas from an offshore platform to an inland refinery.There was widespread disapproval to the route of the pipeline and its proximity to people’s homes.Shell where asked to examine the possibility of an off shore refinery, they failed to do so and instead of engaging with people and trying to reassure them they chose to press ahead with their original plan.This turned into a public Relations disaster for Shell culminating with the jailing of the “Rossport Five”at their request.This did untold damage to the reputation of Shell in Ireland and across the globe, costing them millions of euros in legal fees,loss of revenue due to delays in construction and security fees.
When companies get their CSR right it can yield spectacular results.A good example of this would be Interface Flooring.Interface Flooring is an american company that manufactures carpets and it is one of the biggest in the world.In 1994 its founder and chairman Ray Anderson had a road to Damascus moment and decided to completely overhaul the way he ran the company.He set out a plan and in this plan he challenged his management and employee’s to make the company 100% sustainable by the year 2020.To do this they had to completely change their manufacturing processes,they recycled old carpets to make new carpets this also saved them a lot of waste.They manufacture 100% recyclable carpets and use 100% recyclable yarn.More efficient machinery was installed and the energy used to drive the machinery and the manufacturing process was to be sourced from green energy sources.Since 1995 the company has saved $430,000,000 using more sustainable methods of manufacturing.Add to that they are held up as an example of how to get things done correctly.The reputation of the company is enhanced worldwide and no amount of advertising could achieve the same results.
The funny thing about all this is the fact that when people are asked to do their bit for the planet and save energy they see it as an inconvienience.In reality it is far from this,a lot of the time small sacrifices lead to huge rewards.After all conserving energy usually means conserving money which is a good thing for everybody.Time and time again the main obstacle to a greener lifestyle is people’s habits and the difficulty in changing them and this is the same regardless of who you are.You can be running a three bedroom semi or a multinational company the principles are the same,it’s a matter of changing bad habits.