Posted on: 20/05/2024
Whatever actions a company takes significantly impact its employees and people in general. Companies’ operations have been heavily scrutinized recently, leading to the popularity of terms like corporate accountability and sustainability. You might have heard them in corporate meetings and the general public discussions.
Many people confuse corporate responsibility and sustainability, but the two have some important differences. To clarify, we have provided a detailed overview of these concepts, highlighting the differences and ways to approach them.
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Corporate Responsibility, or Corporate Social Responsibility (CSR), is a business model that requires a company to answer to the public and its stakeholders. It is a self-regulating model, meaning there are no enforcement or regulations that a company must follow. Adopting this model indicates that a business cares about its employees and society in general.
For instance, if a firm announces investments in a not-for-profit educational project, it’s taking a CSR initiative. It is often called the triple bottom line, which means that the business should also care about social impact, environmental sustainability, and profits.
Corporate accountability is a holistic concept with various aspects that require detailed exploration. Let’s discuss them below.
Ethical responsibility means a business operates within an ethical framework and doesn’t involve itself in unfair practices. Businesses that embrace this concept treat all employees, customers, investors, and suppliers fairly.
There are multiple ways in which businesses can indicate that they’re ethically responsible. For instance, if a company thinks that the minimum wage mandated by the State isn’t enough, it can give its employees a higher minimum wage.
Similarly, a company might only get its raw materials from cruelty-free suppliers or those that don’t use child labor.
Philanthropic responsibility means a business investing in philanthropy to improve lives and improve the world. Usually, it means an organization commits a share of its earnings to NGOs and charities with aligning goals. However, some spend their money on other causes that they find meaningful.
Economic responsibility means an organization positively impacts the economy and backs its philanthropic decisions with adequate finances. For instance, if it has committed to educational projects helping students, it shouldn’t pull out abruptly, which could cause a massive loss to many poor students and their parents.
Being economically responsible shows that a business isn’t operating for profits only but also cares about everyone around it.
Sustainability has become a buzzword in recent years, with companies and customers regularly using it to discuss how businesses should conduct themselves. Today, 70% of companies say they have formal sustainability governance in place. However, there’s also a lot of misunderstanding around this term, so it’s crucial to discuss it.
In the corporate world, sustainability means doing business in a way that doesn’t harm the environment and community. When we talk about sustainable businesses, we are referring to two things:
A sustainable business tries to positively impact at least one of the two, ideally both. However, if organizations do their business without caring for either, it leads to environmental degradation, inequality, an uncompetitive market, and other societal ills.
A sustainable business tries to positively impact at least one of the two, ideally both. However, if organizations do their business without caring for either, it leads to environmental degradation, inequality, an uncompetitive market, and other societal ills.
Many businesses proudly mention that they’re sustainable today, but what does it mean? Dissecting sustainability means understanding that businesses differ in their approach to it. Every company looks at its unique circumstances, economic situation, and other factors to align sustainable goals with its bottom line.
Here are a few things sustainability can mean in the business world:
Sustainability isn’t just important for the planet, an aspect often talked about, but also beneficial for a company. Investors heavily rely on environmental, social, and governance (ESG) metrics to understand if a business is dedicated to protecting the environment.
Evidence suggests that organizations with high ESG ratings can secure debt at much lower rates. Moreover, companies that embrace sustainable goals are more profitable and have the potential to do well in the future.
Corporate accountability and sustainability are two sides of the same coin. While sustainability is related to CSR, it has a few unique aspects that turn it into a slightly different concept. Understanding these nuances is essential for a business leader, and that’s where TickThoseBoxes comes in.
We’re the leading name in accountability mentorship and continue to inspire numerous corporate leaders. Since accountability is the bedrock of any successful organization, I recommend seeking a professional to help your organization.
If you need assistance you can take a look at my accountability coaching packages or take an accountability assessment.
Darren Finkelstein, The Accountability Guy®, is the founder of TICK THOSE BOXES, a specialised accountability coaching practice. Darren is a formidable international accountability coach, business advisor, mentor, and author/speaker, fostering development and measurable results in entrepreneurship, leadership, and accountability. Darren’s tale is one of perseverance, self-reinvention, and resilience.
With compelling execution, Darren has empowered high-achieving individuals and teams from Australia and New Zealand to Latin America, Europe, Asia, the UK, and the US to embrace accountability; after all, it is your superpower.
Darren’s one-on-one and group coaching programs are based on his bestselling business book, “The Accountability Advantage – Play your best game” and the latest, release “NO’ – Building a life of choice without obligation”.
Darren has an impressive background in business, having held the role of “Manager of Commercial Markets” at Apple Australia during the Steve Jobs revolution.
He enthusiastically “walks the talk,” having also successfully sold and exited his lifestyle businesses, which served as the impetus for establishing his coaching and mentoring business.
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Read Darren’s full bio here:
https://tickthoseboxes.com.au/about/
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