SMEs and responsible business practice
Background
The Australian Federal Government, through Treasury has commissioned St James Ethics Centre to undertake a three year project to expand responsible business practice, as announced last week by the Honourable Prime Minister Kevin Rudd at the 9th National Business Leaders Forum on Sustainable Development in Parliament House, Canberra. Read more.
The funding will allow St James Ethics Centre to engage many more Australian businesses in identifying and adopting more responsible business practices – particularly small and medium sized companies, whose resources are often more limited.
Responsible business practice and corporate social responsibility (CSR) has focused on large companies to date. However aspects of the agenda are shaping the market in ways that are at least as relevant to small to medium enterprises (SMEs) as they are to larger companies – the impact of climate change, increasing consumer awareness, supply chain pressures, changing societal values, the importance of reputation, attraction of skilled workers and the increasing regulatory framework.
Unlike corporations, SMEs traditionally have greater levels of trust, connectedness and responsiveness to their communities in Australia and it is likely that they currently underestimate their collective power.
“We want SMEs to be the beneficiaries of the national project”, says Rosemary Sainty, Head of the funded project. “With SMEs making up more than 95% of all businesses in Australia it is important to give them a voice in the CSR conversation, and an opportunity to lead”.
Key Findings from stage one research project
Already completed is the first stage of a national research project into responsible business practice in SMEs conducted by the Allen Consulting Group for St James Ethics Centre and presented at the 9th National Business Leaders Forum on Sustainable Development in Canberra on 20 May 2008.
Key findings include:
- personal values of the owner/manager are a key factor in affecting leadership and engagement with responsible business practice or CSR in small to medium enterprises (SMEs).
- responsible business practice needs to be not thought of as an additional burden, but as a core part of the SME’s daily operations;
- the need to reach SMEs through their existing networks and specific sector/industry associations when promoting or communicating responsible business practice;
- practical, action orientated language should be used to engage SMEs that is specific to their business as opposed to the terminology used by the large corporates in their CSR frameworks;
- instead of mandating or forcing responsible business practices, government and industry should engage in leadership initiatives that will guide, support and encourage SME responsible business practice.
- there is a range of innovative initiatives already underway in Australia although the extent is difficult to measure due to the lack of data and coordinated effort.
The second stage of the Centre’s research will provide a more detailed and in depth action research focus based on the findings from the first stage, with results reported early in 2009.
This report (and the subsequent research in Stage Two of this project) will provide an essential addition to literature and data on the promotion of responsible business practice in Australian SMEs.
View the presentation from the SMEs and Responsible Business Practice Stage One Research Report (PDF - 540kb).
SMEs and supply chains
Outcomes from the workshop Sustainable Business and Global Interconnectedness: SMEs in the corporate supply chain, chaired by St James Ethics Centre at the 9th National Business Leaders Forum on Sustainable Development, indicated that business leaders were keen to take a mutual approach with SMEs - particularly those in their supply chains, to share and build capacity and widespread take-up of responsible business practices including the development of tools around CSR indicators, whilst taking care not to impose cumbersome reporting measures.
Assisting St James Ethics Centre in stage two of the project will be the CRI Leaders Network (comprising companies that have achieved consistently high scores on the Corporate Responsibility Index) with a particular focus on sustainable supply chains.
Follow the links below to view presentations themed to Sustainable Business and Global Interconnectedness: SMEs in the corporate supply chain from the workshop:
- Judy Henderson, former Chair Global Reporting Initiative (PDF - 1.1mb)
- Julia Cleverdon, Vice President, Business in the Community (PDF - 1.1mb)
- Katarina Persic, Public Affairs Manager, Toyota Australia (PDF - 1.2mb)
- Rosemary Sainty, Head Responsible Business and CRI Leaders Project, St James Ethics Centre (PDF - 160kb)
Further information
For a copy of the report and further information contact Rosemary Sainty, Head, Responsible Business & CRI Leaders Project in Australia, St James Ethics Centre. Tel: +61 (0)2 9299 9566 fax: +61 (0)2 9299 9477 or email: rbp@ethics.org.au.