Size isn't everything with CSR

When people think of CSR, they often think of big business. Multinational corporations have huge reputations to protect, many sectors to manage, thousands of employees to keep and a long supply chain to consider. And big businesses are starting to consider the United Nations Guiding Principles on Business and Human Rights, and implement them, which is a huge achievement and a great step forward.

Yet small and medium sized businesses are also collectively a large part of the global market. According to the European CommissionSMEs represent 99% of all European businesses.

These businesses may not consider CSR because they feel that their reach is not far enough to affect enough people. Due to their size and their financial situation, they may feel that they have some limitations when it comes to incorporating a CSR strategy, due to their number of employees or the financial turnover. But size isn’t everything, and being an SME can also have some great advantages for working with CSR.

• Decision making is faster.

If an SME decides to implement or work with the UN Guiding Principles on Business and Human Rights, it is typically a much faster process than with a large corporation. Elaborating a Human Rights Policy Commitment for an SME takes less time and resources as there are fewer stakeholders that need to be involved in the process. In other words, fewer managers have to inspect it and give it the go ahead.

• Due diligence is smoother.

Top management or even owners are able to personally meet and know each of their workers. They can discuss problems with them, get to know their grievances, and try to improve the situation. This means the due diligence process is much easier, as management already has an idea of which issues and adverse impacts are most prominent.

• It’s easier to handle adverse impacts.

Once an SME has identified its adverse impacts, it will be easier to prevent and mitigate these from occurring again. Due to a smaller structure and levels of communication needed to affected stakeholders, a closer dialogue naturally enables faster action.

In spite of the many advantages SMEs have when incorporating CSR, there may still be scepticism. The main critical question that is raised when considering working with CSR as an SME is: What do the actions of my small business matter in the larger corporate picture?

The answer is obvious to any company who wants to remain far-sighted. Companies should be prepared for future expectations towards corporate behavior. SMEs must see their own CSR efforts as part of a corporate chain reaction. Every single element needs to commit in order for the efforts to work and have a long lasting and valuable effect.

There are other tangible advantages to implementing the UNGPs as an SME. Firstly, this standard is global and it is an authoritative expectation. Certain governments are already discussing making CSR mandatory, and some have already done so.

Many SMEs are suppliers to larger companies, who frequently conduct monitoring audits that expect small businesses to fill out complicated questions referring to various corporate governance standards. Yet these standards vary enormously in expectation and content, which can be time and resource consuming for an SME. By implementing the UNGPs, your company is taking on the highest, most official and authoritative set of guiding principles for business and human rights.

What it boils down to, in the end, is how much you want to show how much your company cares that it respects the human rights of employees and other stakeholders. You are already doing great things, and these should be celebrated. Respect human rights, and safeguard your future.

 The ILO Guide for Small and Medium Sized Enterprises written in collaboration with GLOBAL CSR will be released later this year. Go to www.global-csr.com or follow us on Twitter, Facebook and LinkedIn to get updates about the launch of this product and where to access it.
by Roxanne Batty and Carolina Diaz Lönborg

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