The Business Case for Social Good
How corporate responsibility can move the needle on social issues while also benefiting companies.
By Caroline Barlerin
Yes, social good is important in and of itself. And yes, I deeply believe that companies can make real positive change. Corporate responsibility, done right, can move the needle on serious human issues. But the truth is that it can also benefit the companies that implement it. And that’s OK!
It’s a circle of life, because mutual benefit allows companies to continue to have CSR programs. LinkedIn for Good can only exist as long as LinkedIn does. JPMorgan Chase can maintain its Entrepreneurs of Color Fund because it has money to give.
If CSR programs only chipped away at companies’ resources until they disappeared, no one would win.
“If CSR programs only chipped away at companies’ resources until they disappeared, no one would win.”
So whether you’re a CEO considering creating an impact program in your organization, an employee wanting to pitch the idea to management, or someone who just wants to explain CSR to friends at dinner, here’s your crash course in the business case for social good.
Thriving Communities = Thriving Businesses
Businesses don’t exist in a vacuum. They need customers in order to succeed, and when communities do well, businesses do well. So it’s in corporations’ best interests to help consumers lead happy, healthy lives.
Supporting local community development can also feed back into companies by way of skilled workers. Can’t find the talent you’re looking for? Create it. I hesitate to use the term “win-win” ever since reading Anand Giridharadas’ Winners Take All (and I think he makes a lot of smart points), but if economic incentive is what it takes to get companies to invest in communities, then it is what it is. I’d rather they do good and benefit than do nothing at all.
Tap Into New Markets
Creating a socially innovative product gives a company a way to access previously untapped markets. For example, until Muhammad Yunus developed microfinance, a huge population was underbanked. If, say, Bank of America had pioneered the system itself, it would have greatly expanded its user base while helping people bring themselves out of poverty. (Not to say traditional financial institutions can’t still help the underbanked today!)
“Creating a socially innovative product gives a company a way to access previously untapped markets.”
There remain numerous opportunities to provide for the bottom of the pyramid, and in many cases corporations can offer things nonprofits cannot. If companies challenge themselves to innovate with a social impact lens, they are very likely to see a positive change in their balance sheets along with positive change in the world.
Employee Engagement and Hiring
Corporate consciences help boost employee engagement and make more people want to work for you, especially millennials and Gen Z’ers. These younger generations prioritize feeling good about what they do every day and being proud of their employer’s impact on society.
As far as current employees go, Deloitte research has shown that millennials who frequently participate in company volunteer activities are twice as likely to rate the corporate culture as very positive compared to those who rarely or never volunteer. They’re also more likely to feel very loyal toward the company and recommend the company to a friend.
By implementing corporate responsibility programs, you’re doing good for the world and gaining an advantage in the war for talent.
Consumers Demand It
You’ve likely been hearing these stats for a few years now, and I think the phenomenon will only intensify as time goes on. Seventy percent of adult consumers want to know about brands’ social and environmental impact efforts, and 46% pay close attention to brand responsibility when they buy a product.
And they don’t want greenwashing (or any other impact-washing). Consumers today can spot inauthenticity and won’t hesitate to skewer you online. CSR can be a PR tool, but whether the result is positive or negative will depend on authenticity.
That’s the good news for impact purists: Companies that have CSR programs and succeed the most, especially long term, will be the ones that are the most genuine about it.
Want to learn more about CSR? Here’s a guide to the spectrum programs can span.
