What is a “Responsible Company?”

Jan 20, 2011   //   by Bradley Short   //   Blog, Company Culture, Operations Management  //  No Comments

Do you know a responsible company when you see one? We often talk about “responsible companies” in passing, but fail to describe their characteristics in detail. Here is a picture of what a BusinessEarth believes a responsible company might look like.

In the first part of this blog, the fictional “Acme” will serve as our example of a company that, while not perfect, is doing good work and making money at the same time.  In the second part, we will show some real-life examples of how companies are putting the ideas that we reference with Acme into practice.

A Model of Corporate Responsibility

Acme is environmentally aware and has taken big steps to shrink its footprint.  Acme reduced its level of waste sent to landfills by 85 percent, which has saved the company the costs of disposing that waste.  They’ve found innovative new ways to reuse materials and within five years plan to operate totally landfill-free. Working with a sustainability-consulting firm, they cut their energy use (and costs) by 40 percent since the start of their environmental program.

Acme realizes that their products remain their responsibility even after their customers purchase them, so they offer free, convenient recycling for everything they make.  Because of this, they’ve kept dangerous chemicals out of their products and only use items that are easy to reuse and recycle.  When customers take their old products in for recycling, they get a chance to learn about the good work Acme is doing and find out about their new products.

Transparency is a core value at Acme; they regularly communicate both their environmental victories and shortfalls to consumers.  They realize that honesty not only builds consumer and employee loyalty, it also gives them an advantage over less-than-honest competitors.

Acme makes sure to only work with suppliers that are good stewards of the environment like they are. In order to maintain strong relationships with these vendors, they are easy to communicate with and make it a point to be very diligent about paying suppliers on time.  They’ve built a reputation of being a company that is good to work with, and because of this, suppliers try hard to keep Acmehappy.

Acme’s philanthropic arm helps train teachers East Austin and assists them as they put their new skills to work.  Employees are encouraged to volunteer for charities, both on the company’s time (while still collecting their normal paychecks), and on their own.  Consumers notice, and they have embraced Acme as a company that they can feel good about supporting.

This has also led Acme to grow an excited, engaged staff.  The company enjoys a diverse, collaborative workforce, and it pays them well.  The company’s high level of employee satisfaction has kept turnover and sick leave low and productivity high.  Young professionals, in particular, are flocking to Acme because they know that their good values are shared.

Responsible companies in real-life.

Now that you’ve seen what a model company might look like, here are a few real-life examples of companies putting responsibility to work for them.

Effective philanthropic efforts: Nike, Intel, and Goldman Sachs approach their philanthropy as if it was a core business function. They not only study to see where their money would be best utilized, they keep reviewing and improving their initiatives throughout their lifespan as if they were any other investment.  Their marketing efforts get a real boost from this, as customers know that this intelligent philanthropy is really making a difference.

Reusing leftover materials: The food processing company, Tyson, is developing technologies that turn leftover animal fats from its factories into a renewable diesel fuel that burns up to 80% cleaner than traditional petro-diesel.  They have taken what would have been waste and turned it into another profit stream, while helping the environment at the same time.

Going landfill-free: GM pledged to make half of its plants landfill-free by 2010. By finding ways to reuse materials and making suppliers cut out excessive packaging, they reached their goal.  GM engineers also found innovative ways to use materials in their cars that otherwise would have been thrown out, such as recycling booms from the BP Gulf oil spill to make parts for the Chevy Volt.

Banding together with other sustainability leaders: Many companies have joined the Carbon Disclosure Project in order to be more transparent.  They are voluntarily choosing to be held accountable for their environmental impact.  Another group of businesses founded BICEP to work to ensure that the environment had a strong business advocate, fighting for effective climate policy.

Voluntary end-of-life recycling: Sony’s Take Back Recycling Program allows consumers to return small electronics of any brand to Sony for responsible recycling.  This keeps toxic chemicals out of landfills and encourages Sony to design products that are safer to begin with.  Customers see Sony’s good work, and will remember the company when it is time for them to make their next purchase.

These are just a few ways a company can do good work while simultaneously becoming a more competitive, profitable company.  BusinessEarth consults and educates companies.  Keep reading our blog and follow our Twitter and Facebook for more ideas of how your company can profit, responsibly.