As social and environmental imperatives push their way onto the agendas of consumers and shareholders, businesses who aren’t keeping up, won’t stay up. Central bankers are flagging the risks of climate change. Social media activists are driving up public attention and driving down share prices of companies that are offside. Major investment houses are suddenly highlighting sustainability as a core investment focus. Consumers are demanding that companies work to help make the world a better place. And governments are paying attention – using regulation to change market behaviour and impose increased costs.
Some corporations are struggling to adjust. Others are ‘leaning into’ broader social and environmental practices as a means of creating business opportunities. The question many are asking is, how?
In this new context, one-off tactics or press releases looking for quick wins won’t work. In today’s increasingly competitive marketplace, companies are recognizing that full-scale, corporate-wide social and environmental programs are key to driving long-term growth and prosperity.
This is all part of a new business era founded on a responsibility to all stakeholders – from employees to suppliers to shareholders to customers to communities to the planet. Last summer’s Business Roundtable in Washington challenged Milton Friedman’s long-standing philosophy that “corporations have no higher purpose than maximizing profits for their shareholders.” It affirmed that companies must play a role in “helping make the world a better place – that this is no longer just the responsibility of the public and not-for-profit sector”. Many leaders also argue that business – not government or charities – is best positioned to solve the world’s greatest social and environmental problems.
At McMillan Vantage, we guide corporations on how to create social and environmental frameworks as a platform to doing business differently. This includes helping companies not only overcome the risks but more importantly, seize the opportunity to act in new ways that will in turn deliver both social and corporate returns. Central to this is helping companies explore how they can harness their corporate values to address some of the most pressing social and environmental issues of the day.
Companies that incorporate corporate social responsibility plans and practices (what is increasingly referred to as “purpose”) into their business strategy are doing well, by doing good too. For example:
- Consumers reward companies that are committed to making the world a better place with increased product sales, and stronger brand affinity and loyalty.
- Employee passion and pride grows when companies share their values and give them an outlet to express these values. This is no longer just about a corporate offsite to clean up a park or paint a community centre one day a year either. Employees want to work for a company that helps them manifest real and lasting change every day of the year. This has significant recruitment and retention implications when it comes to hiring the best and brightest as well.
- Stakeholders are more ready and willing to work together. To many businesses, improved stakeholder and government relations are the greatest areas of return. New and deeper relationships with decision makers and sector leaders help bring about measurable gains for both society and for business.
- Investors are more attracted to businesses that are helping advance social and environmental priorities commensurate with their own goals and priorities. In addition, new sources of revenue are available for companies that are innovating to address social and environmental challenges.
It’s time to help companies understand how tightly aligned values and profitability are in today’s world. We can help them not only understand the risks of social and environmental inaction but to turn these risks into opportunity for differentiation.
To learn more about how we can help, contact:
Andrea Donlan: Andrea.Donlan@McMillanVantage.com
Tim Murphy: Tim.Murphy@McMillanVantage.com