engage magazine issue 004 \'07 - Page 50

50 BUSINESS RESPONSIBILITIES West London Sustainable Business It is 37 years since the US economist Milton Friedman argued that “The social responsibility of business is to increase its profits”. Nowadays hardly anyone subscribes to this narrow definition of the purpose of business and its place in society. The change of thinking is especially marked among young managers. Successive generations show increasing concern for the wellbeing of society and the planet, and business’s role in that. ‘sustainable development’ world. The idea now is that companies should conduct their business not solely to benefit the bottom line. They must also be mindful of their responsibility to their ‘stakeholders’, those who have an impact on, or are impacted by, the organisation. The key to discharging these responsibilities – and to business success – is to develop strong relationships with these stakeholders, including employees, customers, suppliers, community, environment, as well as the funders, and inform them of progress. Sustainability or Corporate Responsibility (CR) is about “the way we do business” – about how a company manages its environmental, social and ethical impact. By ensuring that its operations are carried out in a responsible manner, based on a declared set of principles, a business can build its reputation in the eyes of all its stakeholders: employees, customers, suppliers, shareholders and community. Companies aiming for sustainability are measured, not against a single financial bottom line, but against the triple bottom line of economic prosperity, environmental protection and social equality. Alongside changing consumer expectations, legislation and regulation play a part. The Companies Act 2006 and The Climate Change Bill are among factors forcing directors and businesses to consider the role they play in a – the new boa By Peter Desmond a board director of West London Business and Chair of the Corporate Responsibility Network ISSUE FOUR 2007 engage | uk