We all want to work at a company that does more good than harm, but it’s not always obvious how to help our companies do that… until now.
LinkedIn’s CEO Jeff Weiner recently spoke at the Aspen Institute about why business can – and should – be a force for good. He articulated that for companies to be a force for good, leadership needs to be bought-in, but gaining that buy-in can be challenging.
So how do you get leadership to buy-in to supporting socially responsible initiatives?
In theory, sharing this research from Harvard Business School should be enough to convince anybody within your company about the value of increasing social and/or environmental initiatives. The study clearly demonstrates “Investments in sustainability issues are shareholder-value enhancing”.
But if you if you need more rational and tangible ideas to convince your team and manager to start pursuing “world-positive” business practices, here are 7 leading reasons why leaders and employees – at all levels – should consider launching and scaling socially responsible initiatives:
1. Consumers are Demanding Corporate Responsibility
Whether you are trying to innovate your existing products, better market them, and/or develop new products, be warned that consumers want to know if it’s better for the world.
A 2014 study by Nielsen revealed that “55% of global online consumers across 60 countries say they are willing to pay more for products and services provided by companies that are committed to positive social and environmental impact.” Additional research from Cone Communications/Echo Global showed “90 percent of shoppers worldwide [are] likely to switch to brands that support a good cause.”
2. People Want to Work at Companies with World-Positive Missions
A company’s greatest asset is its people. According to Jack Welch, the famous CEO behind GE’s monumental growth, “You build the best team, you win.” Corporate responsibility can help you do just that as companies with published impact initiatives have an easier time recruiting talent. According to the Net Impact’s What Workers Want report, 45% of employees would take a 15% pay cut for a job that makes a social or environmental impact. Another 51% of workers say that helping “make a better world” and making a “contribution to society” are essential for their ideal job.
These trends are consistent across generations. According to research from the Center for Talent Innovation “data finds that 91% of Gen X female and 76% of Gen X men, and 90% of female and 79% of male Baby Boomers, feel it is important to contribute to their community or the wider world through work.” According to another survey shared on Forbes, “32% of employees would seriously consider leaving their job if their company gave no / little money to charity, and 65% would seriously consider leaving their job if their company harmed the environment.” Even more recent research from Achieve published in May 2015 found that the causes a company supports is the 3rd most important factor, behind the company’s core product and its culture, and ahead of office environment and diversity and H[Response]R awards.
3. Employees Perform Better When They Engage in Socially Responsible Activities and Reporting
One of the biggest challenges in the corporate world is a lack of quality leaders and a disengaged employee base. Social good programs, like skills-based volunteering programs, are proven to effectively build leaders more economically than university programs, training, and conferences. An article in Stanford’s Social Innovation Review called international skills-based volunteering the New Executive Training Ground. An article published on DevexImpact shared Why Every Company Needs a Corporate Volunteering Program.
This idea of world-positive leadership development creates measurable benefits to people, planet, and profits. In a Society for Human Resources Management study, companies with strong sustainability programs had:
- 55% better morale
- 43% more efficient businesses processes
- 43% stronger public image
- 38% better employee loyalty
Expense Reducer: Employees stay with your company longer, lowering replacement costs that can be as high as 150% of an employee’s salary.
4. Develop New Markets and Improve Operations by Building and Strengthening Partnerships
By engaging with social causes in a variety of ways, your company can learn about new geographies, cultures, markets, and product applications. In addition, it can enable partnerships that protect market share and increase distribution. New insights and partnerships can be created by leveraging the diverse assets found within your company, like its products, services, capital, networks, AND expertise.
Here are just a couple examples of how corporations are using impact initiatives that also benefit their bottom line:
- Employees volunteering their skills with organizations in strategic locations can help your company gain local insights. As an example, volunteers in Microsoft’s MySkills4Afrika program support startups and educational institutions. In doing so, they make an impact while better understanding some of their growing market segments.
- Donations of products and/or services can increase the capacity of channel partners to improve supply chains. As an example, Starbucks, Green Mountain Coffee, and other major coffee organizations partnered with Mercy Corps to develop solutions to support coffee farmers during the challenging “thin months”.
- Corporate giving can help develop markets and build loyalty with channel partners. A good example of this is how GE partnered with Ashoka to support women entrepreneurs in the Middle East.
Visit this page for more data and details about international corporate volunteering programs.
Expense Reducer: Lower supply chain and operational costs by improving the capacity and efficacy of your partners.
5. Social Good Fosters Innovation and Collaboration
When employees engage in social good activities, they are proven to become more innovative and collaborative leaders. Nothing showcases this better than employees who engage in international skills-based volunteering projects where employees further develop technical expertise while improving their soft skills. Participants in programs, like this, report that leadership, innovation, communication, and collaboration are some of the main skills developed. Beyond developing skills, employees also learn more about potential customers and gain invaluable local insights. This article in Triple Pundit shares how to align corporate volunteering programs with a company’s strategy.
Beyond being good for the company, these programs are catalytic to social good organizations who consistently struggle from a lack of access to resources and talent. According to Deloitte’s CEO, Barry Salzberg, as quoted in Deloitte’s Volunteer IMPACT Research
“By intentionally linking two often unconnected areas like community involvement and training, innovative companies can cost-effectively meet business goals while releasing new resources for the community. It’s a powerful combination.”
Revenue Driver: Employees can learn new skills and insight, resulting in product innovation.
Expense Reducer: Improved collaboration and communication skills of employees can improve operations and processes.
6. It Can Increase Access to Capital
A 2011 study published in the Strategic Management Journal clearly showed that CSR helps firms increase access to finance. This is largely because the “Impact Investing” field is growing dramatically. Not only with responsible venture capital companies like Kapor Capital and Obvious Ventures, and angel networks like Toniic and Investors Circle, but also major banks have created large Impact Investing funds and fund-of-funds like JP Morgan Chase. Some reports estimate that the size of the impact investing market will grow to over $500 Billion by 2020.
Shockingly, some index funds of impact assets have outperformed the market, like this comparison of Vanguard’s Index fund (VFINX) to its socially responsible Social Index Fund (VFTSX).
Interestingly, as reported in Forbes, investors do feel that there is a shortage of impact-worthy social impact investments. Meaning that if your business is healthy and can prove social impact, there is a large pool of capital waiting to be deployed.
7. It Is a Moral Imperative
Nobody is better positioned to create long-term, sustainable change than businesses. According to Michael E. Porter and Mark R. Kramer in the Harvard Business Review, “When a well-run business applies its vast resources, expertise, and management talent to problems that it understands and in which it has a stake, it can have a greater impact on social good than any other institution or philanthropic organization.”
The recent earthquake tragedy in Nepal is a great example of how corporations can procure and donate capital, products, and services almost more efficiently than any other entity, even when there is no bottom-line benefit. As a few examples of this, Facebook and Google launched tools to help locate missing people, Airbnb was able to quickly provide accommodations, many others, including Amazon, Apple, and Uber promoted donation widgets on their home pages. Some, like Facebook, even matched donations. This Corporate Aid Tracker for Nepal highlights a couple other examples including (but not limited to) free texting and calling through AT&T and T-Mobile, healthcare products and grants by Abbott, clean water systems from FedEx, and free money transfers through Western Union. Beyond products, companies have already combined to donate over 16.1 Million to Nepal – more than any single government or organization (United Nations pledged 15 Million and United States pledged 10 Million ref: CNN). Because of their size, reach, and efficiency, corporations are able to rapidly mobilize information and resources AND get it to the right people at the right time.
Indeed, some of the world’s top CEOs like Howard Schultz (Starbucks) and Paul Polman (Unilever) agree. In a recent HBR Blog Post, Howard shared
“It is no longer enough to serve customers, employees, and shareholders. As corporate citizens of the world, it is our responsibility — our duty — to serve the communities where we do business by helping to improve, for example, the quality of citizens’ education, employment, health care, safety, and overall daily life, plus future prospects.”
Measuring Bottom-line Performance of Corporate Social Responsibility (CSR)
No matter the size of your firm, when you engage in socially responsible activities, you should take care to measure your successes in the short and long term. McKinsey released some great case studies showing that activities can be easily measured to show benefits to the following:
- New markets
- New products
- New customers
- Market share
In the same report, McKinsey shares a framework to make valuing social responsibility programs easier and more effective.
Even the most compelling evidence for socially responsible initiatives needs to be translated to align and enhance existing strategic initiatives within your company. In an earlier HBR article, The Link Between Competitive Advantage and Corporate Social Responsibility, authors Michael E Porter and Mark R. Kramer shared that
“…the prevailing approaches to CSR are so fragmented and so disconnected from business and strategy as to obscure many of the greatest opportunities for companies to benefit society. If, instead, corporations were to analyze their prospects for social responsibility using the same frameworks that guide their core business choices, they would discover that CSR can be much more than a cost, a constraint, or a charitable deed—it can be a source of opportunity, innovation, and competitive advantage.”
Socially and environmentally responsible initiatives can both increase revenues and lower expenses for your company while making the world a better place. But to get your company to embrace them might be an uphill battle. Following the tips above can help any employee at any level make the case for launching and scaling socially and environmentally responsible initiatives.
Do you have any additional examples or research about the value of corporate social responsibility programs? Let us know in the comments below!