As a business owner, manager, or employee, you’ve likely witnessed the groundswell that is “social impact” in recent years. Major corporations are investing in Chief Impact Officers and DEI programming, monitoring ESG metrics, and publishing annual impact reports, while SMEs are becoming B Corps, LEED, or Rainforest Alliance certified. The wealth of initiatives and acronyms can seem confusing and even contradictory. And might leave you wondering: is any of this relevant to your business?
The answer is yes, and here’s why doing good is also good for business.
Here are just four ways in which sustainable or socially responsible business practices can improve your bottom line while making the world a better place.
Energize Employees: the Power of Purpose
In the age of “The Great Resignation”, and “quiet quitting”, engaging your employees has never been more important. A recent Gallup poll identified a lack of “connection to the mission or purpose of the company” as one of the primary contributors to rising employee dissatisfaction.
Centering your company’s purpose and role in addressing social and environmental issues can have a powerful effect on employees’ satisfaction, pride in their job, and intention to commit to the company in the longer term. Furthermore, when employees view their employer as more socially responsible, they tend to perform better in areas such as customer service and management.
This effect extends beyond current employees to attracting potential candidates. A 2015 study found that 82% of Millennials consider corporate social responsibility efforts when deciding where to work and more than 60% are willing to take a pay cut to work for a company that aligns with their values. It’s worth noting that by 2029, Millennials and their even more progressive Gen Z counterparts will make up close to 75% of the world’s workforce.
Attract Loyal Customers: The Rise of Purpose-Driven Companies
A wealth of research indicates the rising consumer preference for purpose-driven companies.
Purpose-driven companies witness higher market share gains and grow on average three times faster than their competitors, all the while achieving higher employee and customer satisfaction. American consumers prefer companies that take a stand on challenges surrounding corporate sustainability, transparency and fair employment practices. And that preference is only growing: US consumers’ preference for brands with an aligned purpose went up from 50% to 66% between 2013 and 2021.
According to Deloitte Insights, purpose-driven companies witness higher market share gains and grow on average 3x faster than their competitors
Ensure Sustainability: The Long-Term View Pays Off
Considering the impact of your business on a broader set of stakeholders naturally shifts your perspective from short-term gains to long-term value. For many companies, making such a shift can seem treacherous, given the current economic system’s emphasis on quarterly earnings. But those companies courageous enough to make the leap are finding that a long-term view pays off.
Companies operating with a long-term mindset consistently outperform their industry peers across almost every financial measure of importance.
Furthermore, creating long-term value will have other financial returns, including increased revenue from greater competitive advantage and customer loyalty, and cost savings from stable supply chains and reduced employee turnover.
Catalyze Meaningful Change: A Rising Tide Lifts All Ships
Adopting a social impact strategy for your company can catalyze more meaningful change across your industry or sector by initiating a process called the “wheel of change”. Wheel of change theory suggests that small-scale sustainability behaviors can drive the discovery of new technologies or business models that reduce costs and persuade competitors to follow suit, thereby transforming the way business is done, and influencing the tastes and behaviors of investors, employees, and consumers alike. As the saying goes, “a rising tide lifts all ships”, so your first steps into social impact can extend far beyond your own company.
At Civic Mind, we help businesses of all sizes achieve their business goals while making a positive social impact. Contact us today to learn more about incorporating social impact strategies into your business and create long-term value.