by Mary Ann Mcgivern

Created on: November 15, 2009   Last Updated: January 12, 2010

It's a great feeling to do good. To be able to make a living being socially responsible and ethical is terrific. That feeling is a big benefit of running a socially responsible and ethical company. And there are other benefits.

The company's product or service benefits the common good. The product can be quality movies; well-made shoes; nourishing and tasty food; financial services; auto repair. It meets customers' needs and sells well. This company's manager will rate job satisfaction high.

The company's board of directors and shareholders are all on the same page, committed to doing well by doing good. The benefit of being in sync with one's bosses is beyond price.

Socially responsible, ethical companies have been shown to be a profitable class of publicly traded firms. The mutual funds that use ethical investment criteria make money for their clients. A benefit of running a socially responsible and ethical company is clearly that it turns a profit.

That the workforce is well treated benefits management. Satisfied workers will produce quality work efficiently. Their productivity is part of what makes the profit. The intangible is the respect and loyalty these employees freely give to management.

Similarly, operating a clean, environmentally friendly business generates community and customer good will that money can't buy. People want to buy products that don't do damage and they are proud the products are made locally.

For example, a commitment to be green will frame the choices the company makes. If it's a food company, the chickens will be cage-free and the excrement will not run off into local streams, polluting the water. If it's a paint producer, green operating principles may prove to be an incentive for developing new technology to capture the fumes. A commitment to conserve energy will foster smart production practice and technological innovation. It's exciting to work for a firm that is a creative industrial leader.

Economists generally underestimate the impact of clean production on productivity and profitability. Industrial waste, for example, is off the books. The costs of pollution such as poor health and bad water quality don't appear to reduce profit. If, on the other hand, a firm captures its waste and sells it or reuses it, economists don't have enough information to recognize and credit that innovation. The money saved and earned gets folded into the bottom line and compared to the bottom line of less responsible competitors.

But everyone who works for the company or lives near it and many of the customers appreciate better environmental practice as well as product quality and the good treatment of workers. As a result, the company management reap a hundredfold of benefits.

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