What is responsible business practice?
The obligations of businesses and other organisations are no longer seen in isolation from the communities in which they operate, the employees they depend upon, the environment from which they draw their resources and the marketplace in which they participate.Rosemary SaintyHead, Responsible Business Practice ProjectSt James Ethics Centre
Responsible business practice is the recognition of, and response to the interconnectedness and interdependence of business within our world of which the global financial crisis and climate change are consequences.Responsible business practice advocates that the true costs and obligations of business and organisational activity are accounted for - both financial and non-financial and require a process of accountability, transparency and comparability through:
- Reflection on actual business impacts, risks and opportunities
- Responsible business practices through integrated and inclusive management processes
- Reporting on these practices in the public domain via a multi-stakeholder approach to management, measurement and monitoring
- Resilience through transparency, trust, adaptability and innovation
Elements of responsible business practice:
- Environmental - the environmental impact, direct or indirect, of an organisation’s operations, products or services including those of its suppliers.
- Community/Social - the impact of an organisation’s projects, products, services or investments on the community at a local or global level.
- Workplace Practices - including respectful, treatment of employees in matters related to recruitment and selection, diversity and equal opportunity, work/life balance, professional development and progression, managing redundancies and full entitlement to employment rights.
- Marketplace & Business Conduct – responsible behaviour in developing, purchasing, selling and marketing products and services.
- Ethical Governance - from board level and throughout an organisation: transparency; risk management; due diligence; effective codes of conduct and ethics.
A single and agreed upon definition of responsible business practice has eluded this complex and multidisciplinary field. Instead a range of terms and acronyms exist each with a slightly different emphasis. Responsible business practice overarches these:
Corporate Social Responsibility (CSR)
A movement not a fad! CSR applies to all aspects of corporate responsibility; community, social, environmental, workplace, governance. CSR practitioners talk about corporate ‘opportunity’ - highlighting the opportunity/risk dimension of responsible business practice.
A term commonly used in the investment industry referring to environmental, social and governance considerations to incorporate in investment decision-making processes: responsible investment.
Triple Bottom Line Reporting (TBL)
A framework for measuring corporate performance against not only economic, but also social and environmental parameters.
An organisation’s practices “... that meet the needs of the present without compromising ... the environmental, social and human needs of our descendants.” www.wbcsd.org
Implies an organisation’s commitment to and awareness of good CSR practices across its operations at all levels, from local to global.
Moving beyond overemphasis on short-term benefits for shareholders to consideration of long-term organisational implications for all stakeholders: shareholders, communities, customers, employees, the environment, the supply chain etc.
An organisation’s recognition that it is in its own long-term business interest to engage in CSR strategies and sustainable business practices.