Might social impact strategies just save the world? It’s hopeful thinking, but the truth is that social impact gives businesses and organizations a business-driven purpose with a lasting impact.
Let’s make one thing clear. Social Impact is not the same thing as Corporate Social Responsibility or CSR. CSR has become a field itself over the years is focused more on the charitable impacts of a company focusing on ethically-oriented practices. CSR initiatives are usually one time projects, or they are projects that are detached from the company’s business model. For example, a company whose core business is ICT or cloud computing, but that donates to a charity that seeks to nourish impoverished children in Africa is typically classified as CSR. In Europe, companies meeting certain size requirements (number of employees and turnover) are required to keep and report a “social budget”.
Social Impact is much different, and it’s changing the way business is done.
It gives companies a purpose, it changes their brand identity and it leaves a lasting, positive impact both within the internal company environment and in the market, sector and community where the company operates.
Social Impact strategies look at improving the company both inside and out. What are examples of some areas companies can look at?
External Social Impact:
- Sustainability: materials used in production and production/manufacturing practices
- Privacy, safety and security (making them a priority)
- Regulatory frameworks
- Environmental practices
- Economic equality and distribution of wealth
Internal Social Impact:
- Corporate welfare programs
- Diversity programs - Training and developing skills and knowledge
- Equality and social inclusion
- Physical and mental wellbeing
Some of these programs are interchangeable as well as companies are finding ways for social impact to become a business model within itself. Many startups are now focusing on an idea or an innovation that will help solve a societal problem and then building a business around it. A company like Too Good To Go is a great example. This startup developed an app to reduce food waste around the globe. The app lets users find perfectly good at local stores that would otherwise end up as waste (currently 1/3 of food produced ends up as waste!).
Another example is the sustainable fashion startup Cikis which consults with fashion companies to produce more sustainable clothing and earn sustainable certifications for the materials they choose and the suppliers they use.
But we need to also look at how our social impact business strategy is improving the internal work environment. Corporate welfare programs are a good indicator of how a company treats its employees. Why does this matter? Happier employees means lower staff turnover, less sick days and vacation days taken and more productive and cooperative employees! It literally pays to treat your employees well!
This goes beyond simply implementing good training programs and have good company policies like smartworking. It means creating a work environment based on equality and inclusion. What is your male to female employee ration? What is the male to female employee ratio at the management or executive level?
Why would a company want to evaluate this simple ratio? Other than simple equality in the workplace, according to McKinsley research shows that women tend to outperform men in leadership positions for several reasons: they value work-life balance, they are empathetic, great listeners and focus on teamwork and employee engagement.
It pays to be diverse! Not just in terms of gender, but companies with diverse employee profiles tend to have better corporate culture thanks to varying mindsets.
Market research also shows that consumers favor companies with a social impact agenda. According to Forbes, 68% of millennials bought a product with a social or environmental benefit in the past 12 months. 87% of consumers will have a more positive image of a company that supports social or environmental issues. 92% will be more likely to trust a company that supports social or environmental issues.
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