By John Hancock
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Additional info for Investing in Corporate Social Responsibility: A Guide to Best Practice, Business Planning & the UK's Leading Companies
But just as brands depend on consumer insight, all stakeholder relationships rely on an understanding of where partners are coming from and what they are trying to achieve. It is the company’s job to come up with shared solutions. Sometimes there are necessary trade-offs. When Diageo decided to close the Strathleven packaging plant at Dumbarton in 1999, the company considered the effect on employees, their families and the local community, as well as consumer reaction. A range of measures was put in place, including enhanced redundancy terms, early retirement packages and counselling services to help people look for new roles.
Other investors, eg trade union and public pension funds, are particularly concerned with issues such as labour standards, health and safety, human rights and environmental impact risk. As with any aspect of a business’s performance, corporate responsibility needs to be measured if it is to be understood and managed. However, unlike the more traditional performance criteria such as growth, return on capital, profitability, revenue generation, growth of customer base, etc, corporate responsibility cannot be so easily quantified.
But corporate social responsibility is as important within a company as it is outside. In competitive times, every business has an interest in becoming an employer of choice, and increasingly people are choosing which company to work for on the basis of how a company demonstrates its social responsibility. Recent research by BITC among 1,000 employers across Britain showed that they see a clear connection between responsible business practice and impact on the bottom line. It found that responsible practice could help attract, motivate and retain a talented and diverse workforce.