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CSR/ ESG – what are they and why are they important when developing your Startup!

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In many walks of life and business, you will come across acronyms – some are well known and instantly recognisable, like ‘ASAP’. Often there are specific ones relating to industries, and only those working in the sector know what they are and use them like some secret code as part of a members-only club.

The voluntary, charity and social enterprise sector (VCSE!) is no different although some of those that are used are also known and used by the private and for-profit business sectors alike. We take you through some of these here.

Corporate Social Responsibility (CSR) is a model that companies and businesses implement to demonstrate how they integrate and support social and/or environmental issues into their business practices, often supporting their local communities. This can take many forms, including giving employees the opportunity to volunteer with local charities or social enterprises, fundraising, adopting charities as their sponsored charity of the year or implementing initiatives to recruit from the local community.

This model is common and often regarded as the role or responsibility of HR, although large organisations often have a dedicated Corporate Social Responsibility section. However, the principles and practices of this model have a wider remit to help a business recruit and retain employees, customers and even investors. Yet these principles and practices can become mainstream and embedded in day-to-day planning and decision-making.

Interest in sustainability is growing, helping the planet through zero-carbon initiatives and recruiting and retaining a committed workforce. How businesses help their local community and their staff and manage their business through transparent and ethical business practices is the focus of Environmental, Social and Governance (ESG) initiatives.

Originally the bastion of those looking for investment, ESG initiatives and reporting helps businesses to explain in further detail what they are doing in the three areas

  • Environmental – how the business has a positive impact on the local environment, for example, recycling initiatives, renewable energy usage and ensuring it supports the local environment
  • Social – how the business values its workforce and the local community, how it supports them and how they are treated
  • Governance – how a business conducts itself in its operations, how it pays suppliers, diversity, equity and inclusion

While a business’s day-to-day operations and impact will be very locally focussed and often the main priority for many, there is also merit in thinking of the wider global impact.

Sometimes considered more high-level, the United Nations created the Sustainable Development Goals or SDGs in 2015 to provide urgent targets in 17 areas to be achieved by 2030. These include no poverty, zero hunger, decent work and economic growth, industry Innovation and infrastructure, to name just a few. Aligning business strategy and plans to where they help towards achieving these global goals could mean the difference in recruiting more staff, attracting more customers and securing more investment.

In this ever-increasing competitive world, those businesses that can demonstrate that they have a wider remit and focus, in addition to making themselves and shareholders richer, will benefit in the long run.

So, where can you start to demonstrate your own CSR or ESG impact? From an immediate practical point of view, you could:

  • Share details of our upcoming Introduction to Social Enterprise course, which we will be delivering on 15-17 February 2023, to anyone you know who might be interested in creating a business that helps local issues
  • Support us through volunteering, donating or sponsoring our participants and initiatives
  • Consider your own supply chains and consider opening them up to social enterprises

StartUp Croydon has been publishing impact reports on activity since 2016 that help demonstrate the impact we have had on the local community. In line with this article, we will be focusing on how we report our own environmental, social and governance achievements in future reports.

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