5 Ways Corporate Responsibility Helps the Bottom Line

The Resilient Enterprise | The riskmethods blog

Data shows that undertaking corporately responsible and sustainable actions pays dividends (literally), demonstrating potential to increase shareholder value, avoid market losses and grow revenue. Yet, too many companies ignore one of the key areas where corporate responsibility and sustainability comes into play: the supply chain.

There are a lot of challenges to making the case for corporate responsibility and sustainability, but the first one is the most basic:

What does corporate responsibility mean?

Everyone uses the terms to mean different things. So let’s start by defining what I mean by the phrase. In general, corporate responsibility and sustainability refers to undertaking organizational processes and policies that:

  • Take actions that reduce harm to the environment or to the public. For example, a decision to cut down on the amount of plastic a company uses to package its product would be considered a corporately responsible and sustainable decision.
  • Make efforts to actively improve the environment or conditions affecting the public. For example, contributing money to charitable efforts to reduce poverty would be considered a corporately responsible and sustainable decision.

Corporate responsibility and climate change

As climate change continues to dominate political debates and younger generations get passionate about social responsibility, corporations are also moving in that direction. What previously might have been considered a nice-to-have is quickly becoming a quantifiable must-have. Consumers care about the impact that corporations have on the world, and are willing to take their business elsewhere when they don’t like the results—which has a real bottom-line effect on businesses.

Check out this infographic for 5 stats from Project ROI’s “Defining the Competitive and Financial Advantages of Corporate Responsibility and Sustainability” that outline the potential value corporate responsibility and sustainability initiatives can bring an organization.

The numbers speak for themselves. So what can your business do to make sure it’s taking actions that reduce harm, and also making efforts to actively improve the world?  

Corporate responsibility in your supply chain

Here’s my top tip: Look at your supply chain.

The supply chain is an area of the business that is often ripe for corporate responsibility and sustainability improvement—and also susceptible to major breaches. To figure out your opportunities and your threats, the first thing you should do is map it all out—so you know exactly where your suppliers are located, and exactly where all their products are going to. Once you have this visibility into your business, you can take actions like sourcing from green suppliers, choosing suppliers that will reduce your logistics footprint and vetting new suppliers to make sure they’re also corporately responsible and sustainable. Finally, once you’ve got the right partners in place, make sure that you’re monitoring them closely and are aware of any actions that might threaten their status as corporately responsible and sustainable vendors.


Map it out.

Create a digital twin of your supply chain by mapping out your suppliers, locations and supply paths. This will give you the visibility you need to starting assessing how you’re doing—and where you need to improve.


Identify responsible suppliers.

Are your existing suppliers corporately responsible and sustainable? Assess your current network, and vet future suppliers to make sure they adhere to the expectations of your company and your customers.


Monitor suppliers to make sure they stay responsible.

A once-responsible supplier is not an always-responsible supplier. In other words: corporate responsibility isn’t a “set it and forget it” concept. Make sure you have a way to continuously monitor your partners for bad behavior.

Even if your own organization is corporately responsible and sustainable, if you give your business to other companies who aren’t, their actions can damage you just as much as your own can. Your supply chain is a critical component of any corporate responsibility and sustainability initiative—and can be the link that makes or breaks your bottom line.

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