Updated: July 11, 2022
Ask ACE
Ask ACE: How do I develop a business strategy that contributes to my community?
By Carrie Green Yardley, ACE board member
Q: I want my business to be profitable, but one of the reasons I work for myself is that I have greater input into how my business contributes to my community. How do I develop a strategy?
ACE Advises: You are not alone; many businesses want a social purpose beyond profit. You may not realize that many investors also want to contribute capital to businesses with a demonstrated ability to turn aspirations into objective performance.
You need understand two interrelated, but distinct concepts: Corporate Social Responsibility (CSR) and the Environmental, Social and Governance (ESG) framework.
Corporate Social Responsibility is often confused with charitable giving. Practically speaking, a small business’s charitable contributions are limited by economic reality.
In fact, philanthropy is just one of several elements that make up CSR, which encompasses the relationships an organization has with all its stakeholders: employees, contractors, clients, partners, community members, investors, and vendors. In addition to philanthropy and volunteerism, it includes nurturing a diverse and inclusive workforce and assuring environmentally sustainable operations.
The Environmental, Social and Governance framework is a tool developed by the investment community. ESG is the measurement and management framework for a company’s CSR activities. In order for impact investors to select companies in their portfolio, they consider ESG ratings to determine if they’re a fit with their values and if they have a shareholder advocacy position.
Together CSR and ESG marry corporate purpose to compliance to allow management to set measurable goals and communicate performance to stakeholders, including investors.
From whistleblower rules to waste disposal, the landscape of CSR is vast. Choosing a path across that landscape requires a map of specific, measurable, achievable, relevant and time-bound steps defining how you will get to your chosen destination. Communicating the map and your progress to your community is key to attracting the stakeholders you want and need.
For more on this topic check out ACE’s July 15 program, “Guiding Companies to do the Right Thing,” featuring Christen Graham, founder of Giving Strong, a social impact consulting firm based in North Yarmouth: consultexpertise.com/event-4851358.
Carrie Yardley is an ACE board member, Mainebiz contributing writer and an attorney and founder of Yardley Esq. PLLC. She advises small business clients from formation through succession. She can be reached at carrie@yardleyesq.com.
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