We are lucky enough to be living in a time where “big business” and “socially responsible” aren’t mutually exclusive concepts. Smart businesses know that to ignore social issues is at their detriment. What’s more, organisations that embed purpose into their day-to-day operations are able to innovate better, help increase customer loyalty and actually drive revenue. By integrating social purpose into the core function of the business, brands have an incredible opportunity to solve social issues and make money doing it.
But many companies have a hard time communicating the good work they are doing. Instead of showing the joint financial and social impact that a shared value model creates, most brands tend to isolate the two. Number, facts and figures are clearly defined in end-of-year financial reports, primed for the hungry eyes of investors, and awaiting critique by corporate watchdogs.
And whilst the brand may be doing an inordinate amount of good championing environmental initiatives, ensuring safe working conditions, or raising money for charities – these efforts are lost in the weaving narratives and glossy pictures of the rarely read sustainability report. Eighty-five per cent of the S&P 500 companies now use a sustainability report to record their social impact. That’s a lot of hard work going unnoticed.
We recently attended a talk hosted by Mark Kramer, who first introduced the concept of shared value back in 2011, where he encouraged businesses to communicate their social efforts differently. He stresses that shared value is unique to every company, and should be communicated as such. In his recent HBR article, Kramer breaks it down by the following four audience groups.
Investors are in it for the money and should be treated as such. They are less likely to care about the money you donated to WaterAid last year, opting to pay attention to the facts and figures that determine the worth of their investment. Here the opportunity lies to get rid of the sustainability report, and instead create integrated reporting that quantifies how your social activity, directly and positively impacts your financial returns.
Unlike the investors, these guys will read your sustainability report, under an investigative lens. They will out smart the pretty pictures and look for tangible evidence that you are doing due diligence and maintaining quality every step of the way. Addressing any questionable practices in the supply chain and collaborating with relevant NGOs or regulators will do well to effectively communicate your efforts to create positive social value within your organisation.
Kramer explains that whilst philanthropy and skill-based volunteer programs typically engage employees and enhance morale, you will find more value in helping them find meaning in their daily work. This may require some effort on understanding your organisation’s role in society, embedding purpose into people’s daily routine not only helps them feel proud of working for your company, but also has the potential to create great waves of social impact, whilst making a profit.
General public and customers
With so many brands shouting for their attention, it takes a lot for the public to sit up and take notice of a company’s commitment to social purpose. Kramer suggests the antidote is to make a statement that truly resonates with people – like Starbucks closing down their stores for racial diversity training. Identifying a cause that aligns to your company’s values, and taking a stand on it, will speak volumes to your customers and encourage brand loyalty long into the future.