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.
2. People Want to Work at Companies with World-Positive Missions
A company’s greatest asset is its people. Corporate responsibility can help you do just that as companies with published impact initiatives have an easier time recruiting talent.
Five years ago, it was considered good if a company simply did not harm the environment. However, times have changed, and now employees demand that their company do more than simply not be bad. They need to do good, too. According to Forbes:
1. 32% of employees would seriously consider leaving their job if their company gave no / little money to charity;
2. 65% would seriously consider leaving their job if their company harmed the environment;
3. 83% would seriously consider leaving their job if their employer used child labor in sweatshop factories.
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.
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:
1. 55% better morale
2. 43% more efficient businesses processes
3. 43% stronger public image
4. 38% better employee loyalty
Revenue Driver: Engaged employees perform higher than their peers, and those with international experience become better leaders.
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:
1. 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.
2. 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”.
3. 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.
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.
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.
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.”
8. Capitalism is evolving, and society is, too
Even investors are pulling away from companies that don’t do good. This was recently evidenced when investment firms and stockbrokers pulled money away from BP due to its operations in Alaska.