Responsible Business: Smart Strategy for Growth
Responsible Business: Smart Strategy for Growth
Introduction: Why Profit Alone is No Longer Enough
Every organisation seeks to stand out from its competitors. How can businesses achieve this without sacrificing profit? What if you don’t have to?
In this article we delve into the challenges organisations face today and how they can continue to build and grow to meet these challenges head-on and thrive for the long-term.
The criteria for a business to be successful has evolved over time. Profit at any cost (even loss of life), led to regulatory and legal changes being introduced over the past few decades, with the most changes in the 2000’s and beyond.
Remember when no one questioned unsafe workplace practices because of fear of retaliation, retribution?
People died, the Westgate Bridge disaster in 1970¹ is often referred to as the turning point for safety at work in Australia. Today’s approaches to safety are not only a mandatory legal requirement, but it also continues to evolve.
Preventing deaths changed to preventing long-term injury, to preventing medical treatment injury, to identifying risks, near-misses and hazards, and recently, expanded to mental health with psychosocial risk being introduced.
It would be foolhardy to suggest no one dies or gets injured on the job, but there are robust laws, standards, frameworks and procedures to ensure safer workplaces.
The reality is that to continue to exist and indeed to thrive, organisations must change along with changing expectations in society, or risk disappearing into history.
Changing Stakeholder Expectations
Organisations face an increasing list of expectations from a range of stakeholders, and the need to be competitive and turn over a profit. Moreover, investors demand continuing returns on their investments.
From needing to attract and retain the best talent, with a safe and inclusive culture, to offering products that the market seeks in the manner and form it is sought, to being a welcome presence in the communities within which businesses operate, to abiding by legal and regulatory obligations, to being able to attract investment by shareholders and financial markets…each group of stakeholders has its own unique demands that cannot be ignored.
The Business Case for Responsible Practices
Research indicates that, globally, organisations that invest in responsible business practices, show longevity and financial outperformance. Results include, on average annual return premiums 50% above competitors², 3-4% higher EBITDA when ethics and labour practices are prioritised in the supply chain³, up to 5% higher revenue growth over 3 years from higher employee satisfaction and that greater ethnic diversity leads to 35% likelihood of higher financial returns⁴.
Furthermore, approaching business with a responsible and sustainable lens, can drive innovation⁵.
This is why, here at Cogent Impact Advisory, we firmly believe in the deliberately purposeful approach. It is not only responsible business, but also smart business, leading to the creation of long-term positive impact.
[2] https://accp.org/resources/csr-resources/accp-insights-blog/accps-making-the-case-for-corporate-social-impact-it-improves-financial-performance/[3] https://resources.ecovadis.com/news-press/esg-activities-correlate-to-stronger-financial-performance-reveals-new-study-from-bain-amp-company-and-ecovadis
[4] https://www.mckinsey.com/capabilities/people-and-organizational-performance/our-insights/why-diversity-matters
[5]Using sustainability to drive corporate growth and innovation | World Economic Forum
At Cogent Impact Advisory we believe creating a responsible business strategy isn’t just about writing lofty goals, it is about making practical, actionable plans.
Why Responsible Business is Smart Business
Creating a responsible business strategy isn’t just about writing lofty goals, it is about making practical, actionable plans. This involves:
Stakeholder Engagement: Collaborate with stakeholders, including investors, employees, and community leaders, to gather input and gain buy-in for sustainability initiatives.
Setting Measurable Goals: Define clear, measurable goals for sustainability efforts to track progress and accountability.
Continuous Improvement: Implement a loop for feedback to ensure that strategies remain relevant and effective in dynamic environments.
Conclusion: The Deliberately Purposeful Approach
As you embark on or advance through this journey, remember that responsible business is not a destination but a continuous path of improvement and leadership. It’s time to lead by example and make a positive impact on society and the environment. Start small, and aim big, and engage with your stakeholders every step of the way.
Ready to redefine what responsible business means for your Organisation?
Let’s get started on crafting a brighter, sustainable future with Cogent Impact Advisory at www.cogentimpact.com.au
