A lot goes on in modern society. We are bombarded with news about climate disasters and social despair every day. At the same time, feel-good snippets about people doing their part for the world keep us hoping for a better tomorrow. With so many resources at hand, corporations have a strong influence on how our society will progress. Yet they are often portrayed as cold and profit-hungry enterprises. Can businesses actually be a force for good?
The world needs more good
Corporate social responsibility (CSR) is a term that has been in use for many decades. In the early days, it was a shallow marketing buzzword that was plastered on press releases about arbitrary annual tree planting events. Today, the practice of CSR requires a lot more than mere performative activities. CSR requires business practices to be put under scrutiny. Businesses must build a framework around responsibility and be accountable to their team members, their investors, the public, and the environment.
Due to the proliferation of media, CSR is now more important than ever. On the Internet, bad news travels fast and good news is few and far between. People are aware of the interconnectedness of everything and realize that corporations play a vital part in creating an equitable and sustainable society. Although it can be difficult to see social responsibility as a tangible asset instead of a liability, many businesses have found that investing in CSR is not just good for the world but also good for the bottom line.
Employees need something to believe in
In 2022, a job is not just a job. Since the pandemic, people have been leaving workplaces in droves to pursue their interests and lifestyle preferences. Talent is hard to find and talent that is loyal to your company is one in a million. When your company has a strong mission and purpose, you will attract valuable employees who seek more than just a paycheck. Social-conscious companies inspire and motivate their team, increasing employee engagement, morale, loyalty, and productivity.
According to Harvard Business School, 93 percent of employees surveyed believe that businesses must demonstrate responsible leadership. Close to 70 percent of employees said that they will not work for a company that does not have a strong purpose and 60 percent would even accept a lower salary for a position at a purpose-driven company. These statistics clearly show that individuals want to be part of the solution. Companies with strong CSR initiatives will enjoy a more dedicated and satisfied workforce.
Clients want to be inspired
In the same vein, consumers want to see companies caring for society and the environment—or, at the very least, mitigating their impact. 70 percent of Americans believe that companies should make efforts to make the world a better place while 77 percent of consumers will be more inclined to purchase from companies with responsible policies. More importantly, 25 percent of consumers and 22 percent of investors have zero tolerance for companies with problematic ethics and practices.
What this means for companies is that instead of issuing statements on their lofty ideals, they need to back up their theories with action. Social proof is the greatest form of organic marketing. Companies with a high standard of accountability and transparency will benefit from a customer base that believes in them and participates in their growth. There are many ways to take a stand. For instance, a mission-based marketing agency in Illinois uses its expertise to help promote non-profit organizations.
ESG is increasingly relevant
CSR is how companies can demonstrate their social commitment. Environmental, social, and governance (ESG) is how the efforts of said companies can be measured or quantified. ESG is fundamentally a set of evaluation criteria. Environmental factors include resource use and climate change policies. Social considerations include how a company interacts with its employees, customers, and the local community. Governance looks at the structure of a company, its internal controls, and its leadership.
ESG is fast becoming an essential metric employed by investors to assess potential investments. Investors, like consumers and employees, only want to invest in enterprises that are responsible stewards of society and the environment. Brokerage firms and fund institutions are similarly making the shift towards companies that fulfill ESG criteria. The US SIF Foundation’s 2020 Report on US Sustainable and Impact Investing Trends showed that ESG-driven investors held an impressive $17.1 trillion in assets.
Corporate behavior is in the spotlight. Society at large demands that businesses rethink their practices and improve the way they interact with people and the environment. A sure sign of this growing movement is the increasing number of companies that apply for B Corp certification. B Corp-certified companies have to meet stringent standards and ensure that they maintain their efforts over several years.
Can businesses be used as a force for good? The answer is a resounding “yes!” However, becoming an accountable business with a meaningful mission and solid CSR is an ongoing process. Only companies that are truly passionate and committed can help to build a more beautiful tomorrow.