That’s the conclusion of Better Business, a ground-breaking study published today (19 Jan) into responsible business practices in Scotland.
The study, the first of its kind in Scotland, was conducted by Social Value Lab and delivered in partnership with Firstport, CEIS, and the Scottish Business Awards.
The project was also supported by Scottish Enterprise, Highlands and Islands Enterprise, CGI and Caledonian MacBrayne.
Research included a nationwide survey of over 1,000 businesses of all shapes and sizes across Scotland, in-depth interviews with 34 business leaders and CEOs and detailed case studies illustrating good practice.
Researchers also analysed the corporate social responsibility and reporting practices among Scotland’s 500 leading companies.
Over half (52%) of the business leaders that responded agreed there was a clear business case for investing in community, social and environmental issues but, more worryingly, almost a third (29%) felt the sole responsibilities of companies was to maximize profit.
While nine in ten Scottish companies (89%) felt they were delivering on their social and environmental responsibilities, the study concludes there is still a long way to go in areas such as representation of women in senior positions and involving staff in decision-making, for example.
Of Scotland’s top 500 companies, only 13% of all board posts are held by women and over half (56%) of the firms have none at all. Just 4% of CEOs are women.
Deputy first minister John Swinney said: “There is a wealth of international evidence to suggest that promoting competitiveness and addressing inequality are important interdependent ambitions.
“Creating a fairer society is not just a desirable goal in itself, but is essential to the sustained, long-term prosperity of the Scottish economy.
“To that end we launched the Scottish Business Pledge in May last year. This is a voluntary commitment made by Scottish businesses to promote and practice the principles of fairness, equality, and opportunity.
“Through championing a culture of innovation, internationalisation, gender balance and fair work the Pledge helps companies to become both fairer and more productive, improving society and the bottom line at the same time.
“It is encouraging to learn that more than half of all business leaders surveyed believe there is a clear business case for investing in community, social and environmental issues.
“I am sure this proportion will continue to grow and I would encourage all those surveyed to learn more about the Scottish Business Pledge and what it can do for their businesses.”
The study shows that the larger the business, the more likely it is to formalise its commitment to corporate responsibility.
For example, 32% of small companies reported specific initiatives, rising to 62% of mid-sized companies and 90% of large ones.
This confirms the view that corporate responsibility in small businesses is driven by the ownerleader’s values, largely unplanned and with no desire for recognition.
In contrast, some of Scotland’s largest companies are delivering well publicised and resourced CSR programmes and are more influenced by the interests of employees, public opinion and business image.
The study sought to identify potential barriers to changing corporate behaviour and make practical recommendations to encourage more responsible and progressive business practices.
The two main obstacles cited were the ability of companies to meet the costs and the lack of staff capacity to get involved in discretionary activities.