Scottish businesses must be motivated by more than the financial bottom line if they are to help build a fairer and greener Scotland. That’s the conclusion of Better Business, a new study into responsible business practices in Scotland.
The study, the first of its kind in Scotland, was conducted by Social Value Lab and delivered in partnership with social enterprise development agency Firstport, CEIS, and the Scottish Business Awards. The project was supported by Scottish Enterprise, Highlands and Islands Enterprise, CGI and Caledonian MacBrayne.
Research included a nationwide survey of over 1,000 businesses of all shapes and sizes across Scotland, in-depth interviews with 34 business leaders and CEOs and detailed case studies illustrating good practice. Researchers also analysed the corporate social responsibility and reporting practices among Scotland’s 500 leading companies.
Over half (52%) of the business leaders that responded agreed there was a clear business case for investing in community, social and environmental issues yet almost a third (29%) felt the sole responsibilities of companies was to maximize profit.
While nine in 10 Scottish companies (89%) felt they were delivering on their social and environmental responsibilities, the study concludes there is still a long way to go in areas such as representation of women in senior positions and involving staff in decision-making, for example. Of Scotland’s top 500 companies, only 13% of all board posts are held by women and over half (56%) of the firms have none at all. Just 4% of CEOs are women.
The study also shows that the larger the business, the more likely it is to formalise its commitment to corporate responsibility. For example, 32% of small companies reported specific initiatives, rising to 62% of mid-sized companies and 90% of large ones. This confirms the view that corporate responsibility in small businesses is driven by the owner/leader’s values, largely unplanned and with no desire for recognition.
In contrast, some of Scotland’s largest companies are delivering well publicised and resourced CSR programmes and are more influenced by the interests of employees, public opinion and business image.
Social Value Lab director Jonathan Coburn commented: “The face of business in Scotland is changing. The traditional notion that business is simply about making money no longer holds true. There is growing influence from the emerging generation of business leaders whose personal values are reflected in how they do business, while the public is more ethically motivated and less tolerant of corporate negligence and corrupt practices.
“There is recognition by business leaders that people are more likely to admire, work for, buy from and support companies that they perceive to share their values. With social media, there is nowhere for businesses to hide – reputation is everything, as the Volkswagen emissions scandal showed.
“Many businesses are trying to do the right thing but face intense competition, tight profit margins and the costs of meeting existing responsibilities – they struggle to release the money or time to go further with their commitments. The aim of this study is to get a realistic picture of corporate responsibility and explode the myths.”
You can read the full report here.
Picture credit: Edinburgh skyline - © Karen Mcdonald | Dreamstime.com