How does ethics benefit companies?

CRS Trends  »  Sustainable reputation   »   How does ethics benefit companies?

It is a difficult task to find an objective and universal definition of ethics. Moreover, it could be said that each one understands ethics in very different ways, from the strictly legal to the purely social.

To this must be added the ethical judgment, which divides the world into good and evil, but to very different degrees; it is not the same to do good, than not to do evil; do as little harm as possible or do as much good as possible.

However, here we are presented with a more complex problem than affirming that ethics is a relative matter: rather, people, like organizations and companies, as a result of their free will, can be more or less committed to the ethics and doing good.

What is clear is that ethics is part of any human activity, including business. But, what role do ethics play in companies?


Social responsibility and ethics

First of all, it is important to distinguish between social responsibility and ethics. Just as the former can ensure that a company’s activity is aligned with social demand, society’s expectations are not always ethical.

What’s more, many companies have demanding social responsibility policies, and yet, the practices on which they base their business activity may not be ethical.

This way we can understand that it is not social responsibility policies that promote a business ethical framework; Rather, it is ethics that qualifies these policies, the company’s main objective being to be ethically responsible and, furthermore, socially consistent.


Ethics as the basis of sustainability

We can even understand ethics as the root of sustainability and corporate responsibility. Ethics, after all, refers to the character of the organization and the people who make it up. That is, it is about habits and daily actions based on a conviction that doing the right thing is the right thing to do.

A company is made up of a group of people who, through cooperation, seek to satisfy a need, generating a long-term sustainable project. It is precisely in this cooperation where the ethical code must be based, in the collaboration of all the individuals that make up an organization.

In short, ethics must be something transversal to the company, in such a way that sustainability and responsibility policies can be applied in the same way.


Ethics, trust and credibility

The current debate is changing. There is no longer any doubt that a company needs to be ethical to position itself in the market and in society. Although economic profit continues to be the essential means for a company to endure, it is not the only reason for its existence.

The complexity of all this is based on the fact that we often overlook those intangible factors that sustain companies and that have their origin in ethics. It is the case of trust. Within the variable range of trust that a company can generate, what is essential for an organization to survive is that it generates it.

Trust and social legitimacy are what manage to generate credibility and improve corporate reputation. All these intangibles are pillars as essential as the economic benefit for a company to endure in the medium and long term.


The weight of intangibles

As we have previously mentioned, we cannot ignore the intangibles that sustain companies and their economic and social activity, and which in turn are based on business ethics.

The economic and financial progress of a company, as well as its position in the market, is directly linked to the evolution of these intangibles. This means that social expectations take into account the added value that ethics brings to the product or service in question.

Even the organization’s competitiveness is strictly linked to the progress of intangibles, the least objective factors being the most important to last in the long term:

In short, business ethics is not a fashion or a whim, but the necessary and indivisible basis of social responsibility policies.

The only way to enforce it is by understanding that it is not just a physical and public document to be made available to stakeholders.

It is about promoting actions, instilling values ​​and fostering habits across the company in such a way that all the people who make up the organization are the engine of trust, credibility and good practices that a company requires to survive.

In DoGood we work to achieve the best result from this transversal cooperation between companies, helping to build a culture of ethical and social responsibility that can also be measured in a tangible way.

In this way, we achieve traceability with a better ESG impact, we create reputational value based on corporate sustainability and we encourage the commitment of people around joint values.

If you want to know more about how we work to create a positive social and environmental impact, click here.