Setting Up a Socially Responsible Business: What You Need to Know

Social responsibility is crucial for businesses because people care about the topic now more than they have ever done. Social responsibility is an ethical, moral, and sometimes legal framework that can get customers and other stakeholders behind a business. Because of this, social responsibility can be much more than a tool for doing good and reducing negative impacts but also one for benefiting a business’s bottom line. Businesses that are mindful of their social responsibility are often seen as complicit and it is therefore important that entrepreneurs set up socially responsible businesses. In this article, we will cover what you need to know to do just that.

What Is Social Responsibility?

Before we look at how to ensure a business is set up to be socially responsible, we have to first, understand what social responsibility is. Social responsibility means acting in a manner that benefits society and the environment surrounding the business. 

Socially responsible businesses understand how their actions, decisions, and policies affect their communities, environment, and society as a whole and they do their best to lessen their impact. They are also aware of whether what they are doing is right or wrong, so they know to keep going as they always have or if they have to adopt new policies, take new actions or make different decisions.

One aspect of social responsibility that confuses a lot of people is how it relates to social responsibilities. Both of these concepts are related, but they are not the same. Social responsibility entails understanding the impact of what a business is doing while ethics entails knowing what is right and what is wrong before any decisions are made.

In business, ethical dilemmas are not usually solved by doing what is right or what is wrong. Some decisions can be legal or what is required for the business but be morally questionable. In many of these cases, businesses are usually blind to the consequences of choosing one way or the other which raises a whole different issue regarding business ethics.

Ethics and social responsibility often go hand in hand as ignoring others can have serious ramifications not only in the legal sense but also through reputation damage, customer boycotts, and other negative results. It is therefore important for business leaders to understand ethics in business, remain ethical, and understand how it relates to social responsibility.

Why Does Social Responsibility Matter?

An important reason why businesses embrace social responsibility is that doing so helps attract customers. All for-profit businesses rely on their customers because without them there would be no revenue. Customers who know some of the money they send to a business will be used to enhance social responsibility are more likely to be comfortable with buying from that business, and in some cases, paying a premium for its products and services.

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Social responsibility helps businesses attract motivated employees. Employees who are eager to make a difference in the world will often gravitate towards businesses that have demonstrated social responsibility. A larger number of motivated employees means the business can achieve amazing results which further helps boost morale and productivity.

Increased customer loyalty and community support are other byproducts of being socially responsible. By making a positive impact on the surrounding communities or working to reduce or eliminate negative impacts, businesses can garner the support of the communities they serve. This is especially true in cases where the business starts social responsibility initiatives that benefit the surrounding community.

Tips for Setting Up a Socially Responsible Business

Now that we understand social responsibility and why it matters, how can entrepreneurs and business ladders set up socially responsible businesses?

Be Serious About Social Responsibility

When setting up a socially responsible business, entrepreneurs have to go all the way. Customers have become much better at detecting businesses that do not put in the work to be socially responsible but instead present that image without going too much effort. Businesses must put in place socially responsible policies and actively implement them if they want to be taken seriously in this realm.

One of the best ways to ensure you are doing this the right way is to engage your customers and other stakeholders. Talk to them to find out how your business is impacting them, society, and the environment around it. Then sit down and come up with policies that address each of the areas highlighted after this exercise.

Ensure Employees are Socially Responsible Too

A socially responsible business with employees who do not believe in the cause will fail in this regard. Generating and cultivating a culture of social responsibility makes it easier to implement and follow socially responsible policies throughout the whole business.

Socially responsible employees demonstrate this throughout their work, product design and development, policy acceptance and implementation as well as through all their customer interactions.

Embrace Initiatives that Employees Would Be Happy About

Even when your employees are socially responsible, they will not feel like they are doing their best if the initiatives the business supports do not make them proud. They will be less likely to engage, which will reduce the effectiveness of these initiatives.

Being a good employer is great for attracting employees, but keeping them around requires much more than that, especially if you are hiring millennials and younger generations. Research is done by Giving Global found that 64% of millennials and Gen Z would not take a job if a business does not have social responsibility policies and initiatives they care about and can be proud of.

Work with Your Local Community

The policies you implement will likely focus on what the business can do internally, but you also have to think about what the business can do for the surrounding community and society. This is why it is so important that a business works with the local community when embracing social responsibility. A business should understand the impact it has on the surrounding community as well as the wants and needs of the people in that community. Brainstorming sessions to come up with viable solutions could work as could talking to people to see which of their ideas you could implement.

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Set Attainable Goals

Setting realistic, attainable goals is crucial. Doing this ensures your business is viewed as one that sets out to do something and does it. You do not want to be known as the business that set lofty goals it did not achieve. Start by thinking about what you can achieve once you become a socially responsible business, who you want to impact, and how you will impact them. If you aim to reduce pollution, start by reducing the amount of effluent you release, then find ways to treat this effluent in-house, and then finally switch to a better, more efficient, and cost-effective solution. All of these are attainable goals because you will be working on a small part of the problem with each round of achievement and implementation.

Switch to Sustainable Means of Production

Customers are very conscious about whether products are sustainable and are more inclined to purchase those that are. There is also a growing market for sustainable products. Switching to sustainable means of production, therefore, gives you two massive advantages: an increase in the number of customers and access to a massive market. Embracing sustainable means of production means embracing renewable energy, sourcing materials responsibly, considering recycled materials, using reusable or recyclable materials, and other sustainable practices like these.

Understand The Values Your Customers Hold

Becoming a socially responsible brand is almost impossible without understanding your customers’ values. For example, a company that makes vegan products knows its customers care about the welfare and well-being of animals. Its actions and policies are seen to be more meaningful and impactful if they demonstrate they care about animal welfare. These meaningful actions demonstrate that you not only care about the world but also care about the values your customers hold.

Be Specific and Genuine

People know PR messages and online posturing when they see them. Generalized statements and words without actions are not enough. Socially responsible businesses must take specific actions that demonstrate they are genuine and care about social responsibility.

How to Demonstrate Social Responsibility

All of the above are important for setting up your business as a socially responsible one. But what practical steps can you take to demonstrate this apart from enacting socially responsible policies?

Provide Volunteering Opportunities

Volunteering is a great way to demonstrate social responsibility as it gives the cause, local community, and society your time and that of your employees. Allowing your employees some time to do corporate volunteering boosts employee engagement. It demonstrates you are serious about making a positive impact in addition to increasing your visibility in your community.

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In addition to volunteering, you can make your impact felt even more by matching donations or offering monetary support to causes you and your employees believe in.

Invest in Environmental and Social Initiatives

There is a lot that can be said about the environmental and social impacts businesses have, some of which are not positive. To help reverse this, businesses can support causes that deal with these impacts. Businesses can also use their voice and reach to educate the local community and larger society about these issues. Lastly, businesses can donate directly to help causes that address issues like environmental damage, health education, and the like.

Embrace Ethical Labor

This is one part of a business demonstrating that it cares about society and its local community. Ethical labor is a huge problem in many parts of the world, with many businesses underpaying their employees, forcing them to work long hours, not offering over time, and hiring those who are underage. Unethical labor has become a point of focus in recent years as larger businesses have been caught engaging in the practice.

Your business can demonstrate social responsibility by ensuring none of these issues affects it and that it does not cause any of them. To make your business one that candidates would be happy to work for, ensure the workplace is comfortable, your employees are well compensated and not exploited, and find ways to engage with your employees.

Promote Philanthropy within the Business

Creating an in-house mission and cause that employees can get behind helps your employees feel they are part of your social responsibility initiative. They will feel like the ideas being implemented are coming from them and they will be even more invested. Many companies now understand this and give their employees either numerous ways to support causes or start projects to support causes they are interested in. A business can then encourage employees to find partners who are interested in the cause to ensure it has the intended impact.

Demonstrate You Care About the Environment

Many people want to reduce their impact on the environment. Although many already do this in their daily lives they also want this to extend to the business they work with or buy from. The good news is that we have come a long way in this realm, and it is now easier than before for businesses to reduce the impact they have on the environment. For example, numerous businesses are already reducing their carbon footprint by buying renewable energy from private partners. Waste management is another huge area, and it does not only entail effluent as we discussed above. Businesses can reduce waste by going paperless, reducing their use of plastic, reducing energy waste, composting, decreasing water usage and wastage, and in many other ways.

Lastly, we have travel policies. As we know, travel is among the biggest polluting activities and conscious transportation help reduce our collective carbon footprints. If you have to fly, do so nonstop to reduce emissions. If you commute to work, then carpool, take public transportation or consider getting a hybrid or electric vehicle. Also, consider staying in green hotels when you travel.

Setting up a business to be more socially responsible includes looking inwards and outwards to understand the impact the business is having on the environment, the local community, and society as a whole. Guided by ethics, businesses can implement policies and strategies that make them socially responsible and reduce their negative impact on the world.


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