Corporate responsibility: manage sustainably and ensure a bright future

Would you have thought that soap dispensers, cashew nuts and the Amazon Rainforest were connected to the corporate responsibility and sustainability of small and medium-sized enterprises?

The following three examples make clear how differently corporate responsibility and sustainability are now practiced in SMEs. The ideas, projects and measures in that area are as special and individual as the services and products of the different sectors.

Below, you can read about the successful CR examples of a provider of hygienic and work clothing, a snack company and a manufacturer of fragrances and flavourings.

Example 1: Cycles of reuse and intelligent soap dispensers

CWS-boco is a leading international provider of hygienic and work clothing that is increasingly focusing its service cycles on the topics of saving resources and reuse.

In cooperation with the Fraunhofer Institute for Integrated Circuits (IIS), CWS-boco has, among other things, developed intelligent soap dispensers. Thanks to a newly developed information system, paper towel, soap and toilet paper dispensers are now only refilled as required.

This means purchasing and warehouse storage can be planned sensibly. The cleaning teams no longer need to check every washroom. Needs-oriented planning of all utensils saves time, reduces physical work for the cleaning staff and ensures a high level of hygiene as the soap dispensers are always sufficiently filled.

Example 2: Ethical procurement of all kinds of nut

The Intersnack Group is the biggest European provider of savoury snacks like peanuts and cashews. The company is aware of its responsibility along the entire supply chain. For example, Intersnack makes an effort to ensure ethical procurement of every cashew that ends up in supermarkets.

To this end, among other things, the company carries out projects with a positive effect on the living and working conditions of suppliers and pre-suppliers in the countries where the nuts originate. The Fair Trade Cashew Cooperation in Tanzania improves income in eight communities, while the African Cashew Project increases the revenue of around 150,000 farmers.

Example 3: Protecting sensitive ecosystems, achieving ambitious climate goals

In addition to climate protection, the fragrance and flavouring manufacturer Symrise is also committed to maintaining biodiversity. The company primarily relies on plant-based materials for around 10,000 raw ingredients, some of which originate in sensitive ecosystems such as the Amazon Rainforest.

At an early stage, the responsible managers recognised that the requirement for natural and sustainably produced raw materials is growing continuously, but those raw materials are threatened by climate change and the reduction in species diversity. With its commitment, Symrise not only ensures organic raw materials for its own use, but also protects the threatened ecosystems at the same time. For example, Symrise achieved its ambitious climate targets for the year 2020 as early as 2016.

The new challenge is efficient and cautious thinking

These three corporate examples are ‘only’ parts of a comprehensive, strategically considered corporate responsibility concept in each case. But they demonstrate what corporate responsibility can look like in practice. Economy and ecology are not mutually exclusive; cost efficiency and farsightedness can complement each other in a sensible way. In this way, companies can sustainably take responsibility for society, the environment and future generations with innovative ideas and creative planning.

The terms corporate responsibility (CR) and corporate social responsibility (CSR) are often used in a similar or synonymous way in this context. But on closer inspection, the more general term or concept of corporate responsibility includes various topics such as corporate social responsibility (CSR), corporate governance, corporate citizenship (CC) and sustainability management. You can find explanations of the various specialist terms in the box below (link to the box below: CR, CSR or CC: a short explanation of terms).

Operate economically – for your own good and that of others

More and more owners and managers are getting to grips with the idea and concept of corporate responsibility these days. Those responsible soon understand why sustainable activity is very much in an SME’s own economic interest.

Those who very closely inspect and evaluate all their company processes in terms of energy consumption and use of resources, as well as direct and indirect effects on the environment and society, will save hard cash at the end of the day. ‘Corporate responsibility is thus also the art of efficient and cautious thinking’, says CR expert and business consultant Sven Grönwoldt, adding ‘sustainable thinking means including the factor of the future in every equation.’

In every company and at every workplace, there are various possible ways to act sustainably and reduce greenhouse gas emissions. The Job Wizards article ‘Sustainable companies: it’s this simple’ shows what some general initial steps could look like.

Sustainable supply chain management creates planning security

Those who pay attention to maintaining standards in supply chain management, such as the Intersnack Group and Symrise, are investing in the future, in planning security for their own company and in securing jobs. SMEs in particular are often suppliers to major companies who are paying ever more attention to sustainable social and environmental standards.

Why? Because major companies are increasingly being inspected with regard to these standards by critical stakeholders or interest groups such as legislators, shareholders, investors and contract partners.

The business standing in the eyes of ever more critical consumers and customers plays an important role in this. The general public are more and more aware of questions regarding social standards and occupational health and safety in production and put the subject on the agenda of big and small companies.

The future of companies is also dependent on social standards

Systematic CR management with focus on social standards and social services is particularly growing in importance for the future viability of companies in structurally weak regions. Important areas of activity include health management and work–life balance, occupational health and safety, training and further education, family friendliness, diversity and equal opportunities. Companies that act sustainably with a good CR management set-up are recognised as having an advantage in terms of image and competitiveness. The increase in websites for ‘sustainable’ jobs, such as the site, https://goodjobs.eu/de, shows the importance corporate responsibility has for applicants these days.

Sustainable and responsible corporate behaviour is becoming an increasingly important objective for small and medium sized businesses. But the way big multinationals conduct their sustainability management only holds part of the answer for them. How much sense does it make for SMEs to publicly report about what they are doing towards environmental protection and social standards? Job Wizards asks CR expert Sven Grönwoldt, co-founder and partner of Grönwoldt&Partner.

 

Recycling, supply chain management, protecting ecosystems, systematic environmental and social standard monitoring along the value added chain: multinationals are showing how CR management is done. And they are reporting extensively about it. Does all this make sense for SMEs?

Sven Grönwoldt: International standards like the General Reporting Initiative (GRI) are only useful as an orientation aid for SMEs. But that should not obscure the fact that sustainability management and its reporting can offer surprising benefits for smaller companies.

What do you mean by that?

Sven Grönwoldt: Responsible and sustainable business has been a matter of course over generations for many SMEs. But lots of entrepreneurs shy away from reporting on it, asking themselves questions like: for whom should we do that? For customers, for employees, for local politicians? And to what end? To sell more or to make customers loyal? And if we begin to boast about our activities, won’t we be buried beneath an avalanche of enquiries? And can we even meet the expectations we awaken in the long-term? Or wouldn’t it be better to keep doing the good work, but not to talk too loudly about it?

That’s a lot of questions. What answers do you have for companies who are asking them?

Sven Grönwoldt: They are quite legitimate questions too. But the fact is, SMEs can no longer fly below the sustainability radar. Without sustainability initiatives, and without communicating them, SMEs face a risky future and will miss opportunities such as: saving costs by saving on resources; enjoying greater opportunities for new orders (because big corporations demand proof of sustainability even in the tender process); and getting easier finance, because sustainability performance is becoming an increasingly important decision-making criterion for banks and investors.

So you’re saying that SMEs, as part of the (global) value added process, now have to measure and document the effects of their business activities on the environment and society?

Sven Grönwoldt: Yes, definitely. SMEs have to take a position regarding things like the climate crisis, resource scarcity, threatened natural habitats and demographic developments, otherwise they will eventually lose their ‘licence to operate’ and will become a risk factor for other businesses in the value added chain. They will, to put it bluntly, get ejected from the chain. It’s no longer enough to supply good products and services if you cannot openly state the effect your business activities are having on the environment and society.

more information
Important: All of us can do something about climate change. There are many ways of reducing greenhouse gas emissions at the workplace. You can read about things you can do in your company in our article entitled ‘Sustainable business: it’s this simple’ .

What do you advise for entrepreneurs who are considering these matters?

Sven Grönwoldt: We advise SMEs in Germany with limited experience in sustainability management to apply the ‘German Sustainability Code’. This recognised reporting standard allows you to show that you are taking responsibility for the environment and society without losing yourself in details. It condenses sustainable management to the essentials and avoids arbitrary regulations.

What does it all cost approximately? Can you calculate CR?

Sven Grönwoldt: There are various aspects to that question, such as whether a business is a producer or a service provider. And, does it want to do only what is absolutely necessary, or does it want to perform a ‘voluntary exercise’?
The cost can be anywhere between €5,000 and €500,000, depending on business model. You should also be clear that CR expenditure is not a one-off investment, it is a permanent part of strategy and involves a certain amount of monitoring. One of the things you definitely have to consider when deciding for or against sustainability management is what it could cost your business if you don’t invest in CR, or if you invest too little.

How much time does it take to install CR management?

Sven Grönwoldt: Many of the things that fall into the category of CR and sustainability management today have already existed for years in businesses: environmental management, sustainability aspects of human resources, protection at the workplace and health management, training and education, and compliance. The key is not to view these action areas as isolated, and to help the various departments overcome their silo mentality. CR management is, in this respect, an integrated management approach. The people who steer companies are often surprised at all the synergy effects that solving critical issues collectively can achieve.

When you advise clients about setting up and expanding CR management, what do you look at first?

Sven Grönwoldt: The first thing we do is to work with those responsible to assess their current circumstances. What is the company’s business model? What are the market requirements? What is the current internal CR status? Then it is a matter of determining strengths, opportunities, opportunities and threats within the business. Finally, we have to analyse the social and ecological impact of its core business, and look at the processes upstream and downstream in the value chain.

And what happens after the analysis?

Sven Grönwoldt: The next step is to employ suitable tools for efficient CR data management and CR controlling. Grönwoldt&Partner assists in setting up and expanding management systems, such as environmental, supply chain, compliance and health management. We work with experts to do this.

And what about reporting?

Sven Grönwoldt: Again, it’s about achieving a balance. If you don’t know what to say or what to report on, then begin by ‘doing’. I advise people to concentrate and act honestly within their businesses instead of relying on inadequate structures. CR and its communication will succeed if the harshest critics are satisfied: your own workforce.